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City debt sparks council debate
STOCKDALE -- City residents may see an increase in their property taxes. As the Stockdale City Council struggles to create a 2013-14 fiscal year budget, under consideration is an increase to almost 42 cents per $100 of assessed value, up from the current 34.04 cents.
During the Aug. 6 regular city council meeting, Mayor Ray Wolff announced the effective tax rate is 34.15 cents per $100 of assessed property value. He said a debt service rate, or interest and sinking, calculated at 7.67 cents per $100 of assessed property value, also is needed. This sparked a debate between Wolff and Stockdale City Manager Banks Akin, who challenged Wolff’s proposed 41.82 cents per $100 of assessed property value.
Wolff’s argument is based on the city’s current debt, which includes two U.S. Department of Agriculture Rural Development loans.
The first loan, with a principal of $975,000 for Texas Waterworks System Revenue Bonds, was used for improvements to the city’s water plant. This loan is backed by a pledge of water revenue, with an annual payment of $48,000.
The city also has Combination Tax and Revenue Certificates of Obligation, totaling $940,000 in principal, designated for the expansion of Wheeler Street and extending into the Stockdale Industrial Park, and other road projects. The annual payments of $45,000 will be paid by ad valorem taxes and a pledge of surplus revenue from the city’s water and sewer system.
Akin suggested keeping the current 34.04 cents per $100 of assessed property value, since the proposed 2013-14 budget includes the two USDA payments.
Wolff said the city will lose $501 in revenue if the effective tax rate is not used. See “What is an effective tax rate?”
Questions arose as to why the effective tax rate is higher than the current rate. The 2013 appraised value of taxable property is listed at $50,329,429. In comparison, last year’s taxable property was quoted at $48,669,969.
City Secretary Thania Santos said Aug. 9, after speaking with the Wilson County Appraisal District, that the appraised value of taxable property is $50,701,099. This is the figure the city will use in its calculation.
Using data provided by the Wilson County Appraisal District, the adjusted taxable value -- deleting all new property from the 2013 tax rolls -- totals $48,371,190, or $298,779 less than 2012.
Wolff defended his proposal, stating the city’s debt must be taken into account in the tax rate.
Akin was instructed to contact the Wilson County Appraisal District for clarification of the interest and sinking tax rate.
Following the discussions, the council tabled four of the remaining agenda items, including public hearings for the budget and tax rate, which were discussed at a special called meeting Aug. 12.
Also during the meeting, the council approved a rezoning request from Janie Longoria. Longoria requested reclassification of four lots from a residential single-family district to a multi-family district, to allow manufactured homes to be placed. Other manufactured homes are already set up in the area. A public hearing was held July 2, with no opposition received.
The council also opened three bids for the collection of residential, commercial, and industrial solid waste and recycling collection services from Republic Services, Tiger Sanitation, and Progressive Waste Solutions. Costs to the city for residential services ranged from $11.93 per month to $13.88 per customer per month. The city manager will review the bids and compile a comparison for the council. The council is scheduled to make its decision during a called meeting set for Wednesday, Aug. 21, at 6:30 p.m.
In attendance: Mayor Ray Wolff; councilmen Scott Soden, Sherry D. Lambeck, Saul Bosquez, Becky Adams, and Roger Armstrong; City Manager Banks Akin; and City Secretary Thania Santos.
What is an effective tax rate?
According to the Texas Comptroller of Public Accounts website, “The effective tax rate is a calculated rate that would provide the taxing unit with about the same amount of revenue it received in the year before, on properties taxed in both years. If property values rise, the effective tax rate will go down and vice versa.”
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