Council receives proposed property tax rates from city

Cove Leader-Press
During a workshop on Tuesday afternoon, the city’s budget director Ryan Haverlah presented the tax rates based on the certified property values in Copperas Cove.
The city’s current property tax rate is 79.7908 cents per $100 valuation. The effective tax rate as presented by Haverlah is 77.1973 cents per $100 and the rollback tax rate is 77.170 cents per $100. The rollback tax rate being lower than the effective tax rate is an “anomaly,” Haverlah said. The calculated effective and rollback rates are based on certified property tax values.
Haverlah said if the council keeps the current tax rate it would increase the general fund revenue by $171,208; to approve the proposed effective rate, the city would have to decrease general fund expenditures by $132,649 in the proposed budget; and if the council approves the rollback rate, that would mean a decrease of revenue in the city’s maintenance and operation funds of $439,141, but would also increase the city’s interest and sinking fund revenues by $303,294 for next year, which includes anticipated payments on 2017 debt issue. 
The tax rates would also have effects on the city’s ideal fund balance for the general fund. Keeping the current tax rate would put the city’s fund balance over the ideal amount by $217,206, leaving room for the council to add additional expenditures to proposed budget, if desired.
Going with the effective rate would cause the fund balance to dip $86,651 below ideal, without a change in the city’s budget.
The rollback tax rate would plunge the ideal fund balance to $393,143 under the ideal amount.
The rollback rate is the maximum rate allowed by law without voter approval. It would provide the city with about the same tax revenue from the previous year for operations and includes an 8 percent increase, as well as funds to pay the city’s debt service for the coming year.
2015’s rollback tax rate was 86.977 cents, but this year’s rollback rate is 77.170 cents because of the city’s debt rate which shows a decrease of 4 cents this year, from 31.914 cents to 27.0893 cents.
City Manager Andrea Gardner said the City’s recommendation is to go with the rollback tax rate. She expressed concerns about the possibility of a petition by the voters, if the council were to approve a higher tax rate than the rollback rate.
Gardner said the city would need to adjust its budget, namely in the area of the health insurance plan offered to employees along with planning to remove the vacant law enforcement officer positions at the police department from the proposed city budget—for now. This would help offset the losses to the ideal fund balance.
Councilman George Duncan asked about the possible future effects of going with the rollback tax rate for this year.
“Are we going to be in the same position, we’ve done good again and our debt’s starting to drop again, we’re going to start cutting other things out of the general fund, just so we don’t have to go to multiple public hearings, etc., etc. Is that a potential?”
Haverlah said that is a potential occurrence for next year as well.
“Our annual debt requirements are going to start decreasing. Because of this scenario, yes, the potential is that our rollback tax rate could be lower. What impacts it from a budgetary standpoint even more is that we are grabbing a number of sources to satisfy the requirements of the general fund now, for next year. If we continue to see that rate decrease as significantly as we are this year, the hard work that we put in this year will be just as hard or amplified next year to balance the budget.”
The council took a record vote on Thursday during a special meeting. The results of the record vote are published online at and will be printed in the Tuesday publication of the Leader-Press.
Also during Tuesday’s workshop, Gardner stressed that the focus of the council shouldn’t be just on raising revenue during property taxes, but called for “responsible” economic development and trying to grow the city’s sales tax base.
Gardner said the city will continue to struggle until the focus has changed, and that was as bluntly as she knew how to put it.
Councilman Duncan commented that if voters pass the liquor petition on the November ballot, that would be a way to increase the city’s sales tax revenue stream.


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