PALM VALLEY — With an aging infrastructure, city officials know expensive work will be needed on roads and water and sewer lines in the coming years.
Now, the top priority is figuring out how to fund these future infrastructure needs for this small city that relies almost exclusively on property taxes to generate its revenue.
It appears they have decided on a path and are heading that way.
Earlier this week, city officials walked through the 2018 budget, which calls for $100,000 to seal coat about half of the streets, a temporary fix officials hope buys them some time to save up more money for future reconstruction of more than 1.2 million square feet of roads.
In order to fund budget changes with hopes to also increase savings for future infrastructure repairs, the city has proposed an 8 percent tax rate increase. That is expected to bring in an additional $45,000 in revenue to the city.
Another change that will increase revenue was a voter-approved increase in the local sales tax from 1 to 2 percent. That is estimated to bring in about $50,000 more in revenues to the city annually.
However, with the additional expenditures, which also include a new police vehicle and bringing on a certified wastewater employee, the city will have a deficit of $15,000 for the 2018 budget.
That will be funded by the city’s reserves, which are about $540,000.
City council member John Widger told the commission the city is “saving for streets, but then spending it right away.”
Mayor George Rivera also suggested the $15,000 deficit probably won’t last, either. He said the 2017 year will likely end with a $90,000 surplus and similar conservative budgeting will lead to the same next year. Any additional surpluses will go into the reserve fund.
The proposed budget and tax rate is expected to be voted on Sept. 5 at a special meeting starting at 6 p.m.
Go to the city’s website at www.palmvalleytx.com to see the full budget.
$45,236 – The amount of additional tax revenue generated from the proposed 8 percent rate increase
48 cents per $100 – the tax rate for 2018 if approved
45 cents per $100 – the current tax rate
$28.58 – the proposed tax increase per $100,000 of property value
$2.50 – the new drain fee, if implemented, will generate $56,000 in additional revenue and add about $78 annually to the average water bill
$25,000 – amount budgeted for a water pressure machine used to clear culverts
The Palm Valley City Council will meet Sept. 5 at 6 p.m. to vote on the proposed budget and property tax rate.
The city has had two public hearings on the tax rate, which is proposed to increase 8 percent, the maximum amount allowed without going to the voters for a referendum. That increase will bring in an additional $45,000 to the city through property taxes.
Overall, the city’s proposed budget will end in a $15,000 shortfall, in which reserves will be used. However the budget appears to be extremely conservative and city officials expect a surplus at the end of 2018. For 2017, the city is anticipating about a $90,000 surplus.
