Agenda No. 22.
CITY COUNCIL MEMORANDUM
| City Council Meeting: | September 3, 2024 |
| Department: | Finance |
| Subject: | Ordinance 24-T-151 – Conduct a Public Hearing and approve an Ordinance approving the appraisal roll; setting the tax rate; levying and assessing general and special ad valorem taxes for the use and support of the municipal government of the City of Schertz, Texas. Final Reading (S.Gonzalez/J.Walters) |
BACKGROUND
At the August 6, 2024, Council meeting, the City Council, by record vote, established a proposed preliminary maximum tax rate of $0.4990, per $100 of value, with the M&O rate at $0.3416 and the I&S portion of $0.1574. This rate was under the Voter-Approval rate but greater than the No-New-Revenue rate.
At the August 20, 2024, Council meeting, the first vote on the ordinance set the tax rate at $0.4900. The ordinance was updated to match the vote from this meeting.
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.
The first public hearing was held on August 20, 2024 during the regular session of City Council. A second public hearing will be conducted on September 3, 2024.
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 is August 20, 2024, 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 7 voting councilmembers, 5 members must vote in favor of the tax rate for it to pass.
At the August 20, 2024, Council meeting, the first vote on the ordinance set the tax rate at $0.4900. The ordinance was updated to match the vote from this meeting.
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.
The first public hearing was held on August 20, 2024 during the regular session of City Council. A second public hearing will be conducted on September 3, 2024.
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 is August 20, 2024, 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 7 voting councilmembers, 5 members must vote in favor of the tax rate for it to pass.
GOAL
To adopt a tax rate in compliance with state statutes 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 $0.4900
FISCAL IMPACT
This tax rate will raise more total property taxes than last year by $1,345,617, or a 5.1% increase, and of that amount, $339,457 is tax revenue to be raised from new property added to the tax roll this year.
The current property tax rate is $0.4872 per $100 valuation. The proposed tax rate is be $0.4900 per $100 valuation. The M&O portion of the property tax rate will increase to $0.3326 from $0.3324 per $100 valuation. The I&S portion will increase to $0.1574 from $0.1548 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 0.76% and will raise taxes for maintenance and operations on a $100,000 home by approximately $0.20.
The current property tax rate is $0.4872 per $100 valuation. The proposed tax rate is be $0.4900 per $100 valuation. The M&O portion of the property tax rate will increase to $0.3326 from $0.3324 per $100 valuation. The I&S portion will increase to $0.1574 from $0.1548 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 0.76% and will raise taxes for maintenance and operations on a $100,000 home by approximately $0.20.
RECOMMENDATION
Staff recommends that the City Council approve Ordinance No. 24-T-151 approving the Fiscal Year 2024-25 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 0.4900, which is effectively a 2.0% increase in the tax rate.”
MOTION LANGUAGE: “I move that the property tax rate be increased by the adoption of a tax rate of 0.4900, which is effectively a 2.0% increase in the tax rate.”