Cuero cuts property tax rate, Yorktown council makes tough financial choices
Oct. 9, 2010 at 5:09 a.m.
CUERO - The Cuero city council lowered the property tax rate and Yorktown slashed its budget and raised taxes as DeWitt County's largest towns took different approaches to financial planning for 2011.
In Cuero, property added to the tax roles and increased values enabled the city council to not only lower the tax rate from last year, but estimate an increase in revenue.
The 2010 tax rate of 30.168 cents per $100 valuation is the effective rate, calculated to raise the same amount of revenue as last year's 31.38 cents. The new rate is estimated to generate about $8,400 more than last year.
"I think we're going to be in pretty good shape," City manager Raymie Zella told council members during the meeting to adopt the tax rate and budget last month.
The council also approved a total operating budget of about $22.6 million.
In Yorktown, the city council made some hard decisions in cutting its operating budget by about $130,000, said city administrator Marcus Puente.
"We believe these reductions reflected our desire to have the least amount of impact on customers as possible," Puente said. "I think the council made some tough choices, but the right ones."
One of the cuts hits the city administrator directly in his pocketbook - a $3,000 incentive bonus to be awarded after completing a probationary period that was part of the terms of his hiring was cut. Puente earns about $45,000 annually.
The City Council and mayor also eliminated their pay. Though minimal, it cut $6,000 from the annual budget. Council members had received $75 monthly and the mayor $150. The council suspended its pay in February, but approval of the 2010-2011 budget made it a permanent cut.
One of the biggest reductions is $30,000 in purchase of commodities such as chemicals, tools and supplies in the sewer and water department.
"One of the most significant cuts was delaying the purchase of $10,000 in backup water pumps that we had originally budgeted for," Puente said.
Another $10,000 in engineering fees was eliminated from the budget.
"We had originally planned to work on both water and sewer projects that required engineering this year, but it was determined that the sewer would be the first priority," said the city administrator, explaining the cuts in engineering fees. "The city has a construction fund, which we can use to fund this year's clarifier improvements and engineering work."
Puente added that he is seeking grant funding that would pay for engineering costs for water projects. He recently submitted a grant application for $263,000 for replacement of 5,000 linear feet of water lines in various sections of town.
Another $6,000 was cut by eliminating a library aide position and cutting the library hours.
Puente pointed out that the budget cuts were made with input from the city's department heads.
The City Council also approved a property tax rate hike, adopting the rollback rate, going from 64.931 cents per $100 valuation in 2009 to 70.444 cents per $100 in 2010.
An average home, valued at about $34,000 in Yorktown, will see its tax bill increase by about $25.
The tax increase should add about $24,000 in revenue to the city's $1.7 million budget.
Getting back on track
Puente, hesitant to place blame on previous administrations for Yorktown's financial condition, said the city is doing business differently now.
"I don't think there was any plans for repair and maintenance in the past," said the city administrator. "There was never money for contingencies."
"For decades the city relied on the utility department to fund deficiencies," he said. "What we ran into last year was water sales were down and we couldn't transfer enough funds."
Puente said revenue streams have been shrinking and past city councils have been reluctant to raise property taxes or water rates.
He said that the new budget and those going forward will also set money aside for reserves
"It will take a few years to get to a level I am comfortable with," he said.
Puente pointed out that the city continues to move forward on projects, including improvements at the sewer plant.
"I think the people of Yorktown understand," he said.
Steady as she goes
In Yoakum there was little change from last year, said city manager Calvin Cook.
The tax rate increased slightly, from 8.59 cents per $100 valuation in 2009 to 8.9 cents in 2010. A taxpayer with a $100,000 home will pay about $3 more in property tax.
The new tax rate will generate about $3,000 more in estimated revenue. Yoakum has a total operating budget of $15.9 million.