Copperas Cove city council discusses upcoming revenues, removing homestead exemption, adding transportation user fee
By BRITTANY FHOLER
The Copperas Cove City Council discussed tax revenues for the fiscal year 2021-2022 proposed budget during a special meeting Tuesday evening.
The city council will receive its first look at the proposed budget on June 1, after city staff meet with departments and look at the city’s revenues and projections.
Budget Director Ariana Beckman and City Manager Ryan Haverlah presented the council members with a slideshow detailing the city’s current financial position. The city has four funds- the General Fund, Water and Sewer Fund, Solid Waste Fund and the Golf Course Fund. The presentation focused on the first three funds.
Regarding property tax revenue, Beckman said the city will see a three percent increase in revenues for fiscal year 2022 compared to fiscal year 2021. The certified property tax revenue for 2021 is $11.02 million, compared to the estimated $11.4 million for fiscal year 2022.
Beckman also discussed the disabled veteran property tax exemption. Currently, veterans with a 100 percent VA disability rating are exempt from all property taxes. Veterans with a 70 percent to 100 percent rating receive a $12,000 property tax exemption. Veterans with a 50 to 69 percent rating receive a $10,000 property tax exemption. Veterans with a 30 to 49 percent rating receive a $7,500 property tax exemption, and a 10 to 29 percent rating receives a $5,000 property tax exemption.
The city has received payment relief from the state since 2016. Beckman said the city estimates to receive $730,000 in relief, compared to $1.7 million in lost revenue for 2022, on an estimated 1,381 applicable properties.
Compared to other cities in the region, Copperas Cove’s property tax rate is on the higher end at 78.65 cents per $100. Killeen has a tax rate of 73.3 cents per $100; Harker Heights is the next highest at 67.7 cents per $100, and Temple has a rate of 67.27 cents per $100. On the lower end, Lampasas has a tax rate of 33.952 cents per $100, and Georgetown has a rate of 41.8 cents per $100.
When it comes to property tax per capita, Copperas Cove is on the lower end at $332, just a dollar behind Killeen. Temple is on the higher end with $679, and Leander is the next highest with $589.
Beckman shared other possible revenue options with the council to include a tax rate increase of one cent, which would raise $129,860 in revenue; the removal of the Homestead Exemption, which would raise $236,343 and would allow a tax rate reduction from 78.65 cents per $100 to 76.85 cents, which would reduce revneu by $236,980; instituting a cemetery tax of one cent, which would raise $129,860; and a transportation user fee which would raise $504,000.
Haverlah said that these were not proposals for the council but rather just pieces of information to let council members understand all of the options.
The council members directed city staff to look into the removal of the homestead exemption to bring back to a future meeting. The council also agreed on bringing back the information the previously discussed transportation user fee.
Tiered rates for utility billing: not this year
The final topic that the council discussed was a tiered rate for the utility billing. The city council approved changes to the fee schedule last year which increased the base rate for water and decreased the volumetric rate for water and sewer, and removed of the senior discount. There was also a slight increase to the solid waste base rate and the drainage fee.
Councilmember Jay Manning said that the reason the city changed its rates was because the costs were “unbalanced “and the city was “moving in direction of bankruptcy.”
He said he would be interested in a tiered rate, especially when the city needs to ration water, because the pricing would help enforce water conservation.
Councilmember Joann Courtland said she wanted the tiered rate as well.
“This was one thing that I’ve been talking with the city manager about because one, people are using more of the resource,” Courtland said. “It does not have anything to do with anybody’s salary or the rich versus poor. This is about a resource that we have that people are using, and we have people in our city that are conserving, that only use 1,000 gallons a month. Does it make sense that they’re paying similar rates to somebody that’s using 18,000 gallons a month?”
Courtland said that there are customers who are seeing their bills go down despite using more water, which didn’t make sense to her.
Haverlah shared that the rate changes, which went into effect in October 2020, are covering the existing costs of the city’s water system and are recovering more revenue than initially planned. He said the possibility of lowering rates was there but wanted to see the rates in place for at least a year.
He said that tiered rates are implemented in many cities throughout the state, often with the primary purpose of conservation.
Mayor Bradi Diaz said she would like to see utility administration work with the current rates, with a year of operations, without outside factors like a pandemic and winter storm.
“We still are having complaints,” Diaz said. “We still are having concerns about the service that we are providing, and I don’t want to throw one more thing at utility admin to implement, to change, to fix, to learn now.”
Councilmember Fred Chavez said he also was in favor of a tiered system but wanted to see the rates in effect for at least one full fiscal year and then have city staff use that data to create a model to plug in numbers to see if a tiered rate system would work.
The council consensus was to wait until the next budget session, in 2022, before bringing this item back.