Council to take record vote on proposed tax rate on Thursday
By LYNETTE SOWELL
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 79.1973 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.
Haverlah said if the council keeps the current tax rate it would increase the general fund revenue by $171,208; if it approves 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 changing the health insurance plan offered to its employees and would remove the presently vacant police officer positions from next year's proposed city budget—for now. This would help offset the losses to the ideal fund balance.
The council will take a record vote for the tax rate on Thursday at 5 p.m. during a special meeting at the Copperas Cove Economic Development Corporation located at 210 S. 1st St.