Agenda

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10.

City Council Regular Meeting

Meeting Date:

09/06/2022

BACKGROUND

At the August 9, 2022 regular session, the City Council, by record vote, established a proposed preliminary maximum tax rate of $0.4999 , per $100 of value, with the M&O rate at $0.3519 and the I&S portion of $0.1480. This rate was under the Voter-Approval rate but greater than the No-New-Revenue rate.

On August 12, staff received a new Voter-Approval rate from the Guadalupe Tax Assessor Collector of $0.4968. Due to this change staff brought this change to council on August 23rd, where council set a new preliminary tax rate of $0.4950. This rate is under the new Voter-Approval rate and is greater than the No-New-Revenue rate.

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 a hearing is required as the proposed rate does exceed the No-New-Revenue rate.

A public hearing was held on August 23, 2022 regular session of City Council. A second public hearing will be conducted tonight, September 6, 2022.

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 was August 23, 2022 without calling special meetings or declaring an emergency.

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 6 voting councilmembers, 4 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 $0.4950

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 $0.5121 per $100 valuation. The proposed maximum tax rate will be $0.4950 per $100 valuation. The M&O portion of the property tax rate will decrease to $0.3470 from $0.3517 per $100 valuation. The I&S portion will decrease to $0.1480 from $0.1604 per $100 valuation.

This tax rate will raise more taxes for Maintenance and Operations than last year’s tax rate. The tax rate will effectively be raised by 9.4% and will raise taxes for maintenance and operations on a $100,000 home by approximately $42.40.

RECOMMENDATION

Staff recommends that the City Council approve Ordinance No. 22-T-31 approving the Fiscal Year 2022-23 Proposed Tax Rate on first reading.

MOTION LANGUAGE: “I move that the property tax rate be increased by the adoption of a tax rate of 0.4950, which is effectively a 9.4% increase in the tax rate.”

Attachments
Motion to Adopt Tax Rate
Ordinance 22-T-31