Agenda

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City Council Regular Meeting

Meeting Date:

09/08/2020

BACKGROUND

At the August 11, 2020 regular session, the City Council, by record vote, established a proposed preliminary maximum tax rate of $0.5146, per $100 of value, with the M&O rate at $0.3495 and the I&S portion of $0.1651. The proposed rate is not subject to rollback.

In accordance with Chapter 26.05(d) of the State’s Property Tax Code, a governing body must hold a public hearing on the tax rate if the proposed tax rate exceeds the lower of the No-New-Revenue or Voter-Approval Tax Rate. In this case the hearing was required as the proposed rate does exceed the No-New-Revenue rate.

The required public hearing was held on August 25, 2020 regular session of City Council. A second public hearing was conducted on September 1, 2020.

During the tax rate adoption process Council can approve a lower rate, however they will not be able to approve a rate higher than this without republishing the notices and holding additional public hearings. Due to timing constraints set by the State Tax Code 26.05(a), the latest council could set a new preliminary rate is September 1, 2020 without calling special meetings or declaring an emergency.

**Since no action was taken on September 1, 2020 and a vote on September 8, 2020 would be within 7 days of the last public hearing, council may take action to set the proposed rate higher than the No-New-Revenue Rate. This would require an additional public hearing would have to be held on September 22nd and a notice advertising the public hearing must be published. The second and final vote would take place on the 22nd after the public hearing.

If no action is taken tonight, council would have to call special meetings to set the tax rate, hold a public hearing, and publish a notice in the paper and online.

If no tax rate is approved by September 30, 2020, the tax rate will default to the No-New-Revenue Rate of $0.5079 for FY 2020-21.**

Per Sec 26.05(b) of the Tax Code, the tax rate can only be adopted with more than 60% of the votes in favor of the proposed tax rate. Since Schertz has 7 voting councilmembers, 5 members must vote in favor of the tax rate for it to pass.

GOAL

To adopt a tax rate in compliance with state statues and the City Charter.

COMMUNITY BENEFIT

The programs funded by this tax rate will provide additional benefits and service levels to the community.

SUMMARY OF RECOMMENDED ACTION

Staff recommends adoption of the tax rate of $0.5146

FISCAL IMPACT

The proposed maximum rate maintains quality service to residents and businesses and provides growth in service offerings based on input staff received from Citizens and Council from Retreats, Community Meetings, Citizen Survey, and elections. The current property tax rate is $0.5146 per $100 valuation. The proposed maximum tax rate will be $0.5146 per $100 valuation. The M&O portion of the property tax rate will decrease to $0.3495 from $0.3496 per $100 valuation. The I&S portion will increase to $0.1651 from $0.1650 per $100 valuation.

RECOMMENDATION

Staff recommends that the City Council approve Ordinance No. 20-T-32 approving the Fiscal Year 2020-21 Proposed Tax Rate on first reading.

THE MOTION MUST BE:

“I move that the property tax rate be increased by the adoption of a tax rate of ($0.5146), which is effectively a (1.3%) increase in the tax rate.”

If a different tax rate is made in the motion, the percentage must be calculated over the effective rate of $0.5079.

Attachments
Ordinance 20-T-32