EARLY – The Early City Council on Friday approved the 2022-23 fiscal year budget, which will go into effect Oct. 1.
Early City Administrator Tony Aaron provided the following synopsis of the budget as part of a 117-page file posted on the City of Early website, which be found at this link: EARLY-2022-23-BUDGET
I am pleased to present to you for adoption the annual budget of 2022-2023, for the Fiscal Year beginning October 1, 2022, and ending September 30, 2023.
This budget is a reflection of the council’s programs, goals, policies and objectives that have been determined through workshops and trainings. This budget will act as a guide for our efforts to not only provide basic services, but to increase the quality of those services, and improve the quality of life for our community. When we seek to improve our standards as a community it often comes with a price or a cost to our citizens. However, we always strive to do so within the financial means of our community without over burdening our citizens. We are mindful of the burden that property tax and utility rates can put on the public especially during a year of record high inflation. When the cost of living for our citizens increases over 10%, the cost of operations of a city can increase by that same amount. Over the last year we have felt that impact in our budget most directly in fuel, maintenance, and material cost. As the cost-of-living increases, we continue to look for ways to reduce expenses, become more efficient with what we do, and find ways to do more with less. Our efforts help to reduce increases in cost for the public, but while we can narrow the gap between financial resources and necessary expenses, we cannot always close that gap.
Preparing this budget is the combined effort of administration, city departments, and citizen input with the great guidance of the Mayor and City Council of Early to minimize the overall cost and maximize the impact of the public funds entrusted to us. This proposed budget includes financial information regarding the General Fund, Convention and Visitors Bureau Fund, Municipal Development Fund, Water Fund, Sewer Fund, Sanitation Fund, and numerous other special funds. The proposed budget for the Fiscal Year 2022-2023 has a total estimated revenue of $11,381,609 which is relatively flat at 0.61% to revenue over 2021-2022 revenue projections. While the revenue is flat year over year the revenue projections accounts for a major shift between property tax and sales tax revenue.
The total expenditures budgeted for the 2022-2023 budget year are $10,903,039 or a 4.81% increase over last year. Approximately, $4,496,997 of those expenditures are funds from a beginning balance or funds that have been held in reserves for specific projects. A 4.8% increase to expenditures in light of a 9% national inflation rate demonstrates our ability to continue to move forward while holding below the heavy burden of inflation. The needs or expenditures for operating the city sets the foundation for determining our operational revenue and at what level of need there is for revenues. The conversation about revenue usually begins with property tax.
The Brown County Appraisal District has certified total appraised taxable value within the City of Early at $546,792,602, which is an increase of $278,201,545 in total taxable value. New property value resulting from the new and recent development and construction that has occurred in the residential and commercial markets of Early, Texas represents $6,396,780 of this growth. $234,000,000 of the total taxable value is attributed to industrial property within the City of Early. This assessed value is under protest and on appeal with the Texas Court of Appeals. As a result of this protest and appeal, our anticipated overall property tax collection rate is projected to be around 50% collections on the total taxable value of 546,792,602. As a result of this added taxable value, the No New Revenue rate, Voter Approval Rate, and anticipated revenues from any adopted rate outside of voter approval are greatly affected. The tax rate formula shows that adopting the highest rate without voter approval, the de minimis rate, will establish a reduction in the rate by 0.1369 cents for a one-hundred-dollar valuation or a 27% reduction in the rate. It is the position of the council to present a budget and adopted rate of 0.36238 cents for a one-hundred-dollar valuation. This rate is down from .4993 cents in budget year 2021 -2022. Early, Texas will now have the lowest tax rate of all taxing entities in Brown County.
There are two revenue factors when considering this rate. The first is the impact on the citizens of Early. In 2021, the average home in Early was appraised at $147,475 and the property tax rate was 0.4993 meaning that the average homeowner paid $736 per year in property taxes. In 2022, the average home in Early, Texas is appraised at $166,201. By applying this rate to the property tax formula, the homeowner of an average price home in Early will pay $602.31 in city taxes per year. (0.3624 X $166,201 / 100 = $602.31 per year) This equates to $133.64, less on average, that the citizens of Early will pay during this fiscal year. The effect of the lowered rate on citizens is clear. While the value of their home may have increased as a result of inflation and the rising cost of the housing market, their property taxes paid to the City of Early will decrease greater than the rise of the value.
The second factor to consider is the impact on property tax revenue to the budget. Although the tax rate worksheet shows what appears to be an increase of $500,000 in property tax revenue, this worksheet does not account for a 50% collection rate. With the pending litigation on industrial property tax values, the City of Early will collect an estimated $200,000 less in property tax revenue in 2022- 2023 over 2021-2022. We are however fortunate to be able to offset this loss with increases in the area of sales tax revenue. In this budget, we are projecting to collect $2,100,000 in sales tax. This estimate represents a 16.28% increase over last year’s sales tax budget of $1,806,000, but still remains a conservative estimate well under our actual sales tax collections of $3,123,257. At this point, our sales tax collections are projected to more than double our property tax collections and by the end of 2023 could represent 3 times the value of property tax. We can comfortably say that our budget is supported primarily with sales tax revenue.
Anytime we can increase the quality of our services, maintain our infrastructure, pay our employees a competitive wage, and lower the property tax rate, it is a win for our citizens. The details of the expenditures can be found in the attached budget. Highlights includes adding two full-time fire fighter positions, two new patrol vehicles. In the street department we will move forward with the reconstruction of Autumn Drive; we will begin engineering on the two additional street projects; and we will continue investing more maintenance dollars on other streets in town. We will also continue improvement projects at our ballfield complex. We will also take significant steps in the continued development of our Town Center Park and connected lake. In our public works department, we will continue to maintain and rehab our sewer infrastructure, replace aged fire hydrants and water meters, and provide quality sanitation services. In partnership with the City of Blanket we have executed another 5 -year contract to provide the citizens of Blanket with the same high quality trash service that we provide in the city limits of Early. The Early Municipal Development District, will continue its grant programs for local businesses, construct the batting cages at the Town Center Park, and begin the construction efforts on the Boardwalk along the eastside of the lake.
We continue to work hard to explore the availability and potential for grant funding to help reduce local tax payer cost. This year we have leveraged several of those opportunities. We have received $16,000 from the State of Texas’ Selective Traffic Enforcement Program also known as STEP. These funds pay officers overtime to work on particular traffic violations during preselected high travel days in the state. We have also received $100,000 from the Habitat Angler Access Program to go towards the Town Center Lake, and $50,000 from the Lower Colorado River Authority for the construction of a trailhead, signage, and outdoor classroom along our Town Center Park walkway. In addition to these funds, we have or will have received a total of just under $800K from the American Rescue Plan . With these fund s we have identified several projects that we will be using the funds for. These projects address various improvements within our Water, Sewer, Parks, and Fire Departments. We have also been awarded a grant from Texas Department of Transportation for the construction of more sidewalks in our neighborhoods and commercial area. This effort is to make the City of Early more walkable and accessible for alternative forms of transportation. This grant is valued around $800K dollars and we should begin engineering the project within this budget year.
At a 9% inflation rate, the cost of living is a burden to everyone. Taking care of our most valuable resource is a priority. Our employees help make our community great and while taking care of our employees is a priority, taking care of citize ns’ tax dollars is a top priority. With a budget that reduces the tax burden to our citizens and provides a 3% cost of living raise to our employees we are satisfying both priorities.
Utility rates in Early are often dependent on a couple of driving factors. The primary factor is the cost of operations. This year the Brown County Water Improvement District imposed a 20% increase on the cost of water. In our water department we controlled this increase by holding our expenditures to an increase of less than 7%. Most of which is the result of increases in fuel and materials. In order to mitigate this 20% increase, we increase our water rate marginally to cover only the wholesale cost of the increase. Another circumstance that affects our rates is the fact that Early’s solid waste, its trash, is disposed of in the City of Brownwood’s landfill. This year they increase their disposal rates by 14% and reported to us to expect an additional increase next year. This increase had to be passed along to our citizens through our rates. Again, we have only proposed a rate to cover the wholesale cost of the increase. In comparison to these two examples, the City of Early operates its own wastewater treatment facility. In order to deal with inflated cost of operations we were able to cut spending in other areas, and by doing so there was no need to increase our waste water (sewer) rates.
With a growing city it is not always easy to stay ahead of the demands that come with growth and inflated needs. However, we always look for ways to deal with needs and demands in a way that reduces the burden as much as possible to our citizens. As opportunities present themselves to operate more efficiently, we will seek to reduce rates, both tax and utilities, as long as we can continue to provide the same or improved services, and maintain the city’s investment. Much work goes in to building a budget of nearly $10M dollars, and I would like to thank all the collaborative efforts of the city staff, committees, and elected officials in the development of this budget. This budget lays the foundation of the work ahead in this next year. Once adopted, the work going on continues, and new efforts begin. The mayor, and council provide great guidance and direction, the Department heads organize efforts and oversee projects and the day-to-day operations, but our employees are the ones that build the dream of Early, Texas and make it a reality. I am proud of all these employees and greatly appreciate their dedication to Early, Texas. It is a great feeling to be a part of such a wonderful community.