Cove council proposes to lower property tax rate
By BRITTANY FHOLER
The Copperas Cove City Council took a record vote of 5 to 2, to propose a property tax rate of 78.65 cents per $100 valuation during a special meeting held Thursday evening.
At Tuesday’s special meeting, the council was presented with three tax rates, the current rate, the effective tax rate and the rollback tax rate.
The city’s proposed budget for fiscal year 20199-2020 was put together using the city’s current tax rate of 79.7908 cents per $100, which has been the rate since 2015. This rate would add $141,721 in revenue to the General Fund. The effective tax rate of $0.7736 would require a reduction to the General Fund by $161,853. The rollback tax rate of $0.8284 would add $523,915 to the General Fund.
City Manager Ryan Haverlah also gave council members a sheet showing additional tax rates calculated based on conversations with council members and the impact the rates would have. Council didn’t discuss those rates, but Haverlah said that if they were to be considered, council would need to determine which budget priorities to proceed with.
Included in those priorities were one-time costs for the asbestos abatement and demolition of the old city hall building, the old fire station and the old police station.
Council member Dan Yancey said that the 20 percent increase in healthcare costs for the city, a total of $146,941, “deflated the balloon” about whether council could lower the tax rate, but suggested dropping the asbestos abatement and demolition of the old police station from the proposed 2019-2020 budget.
“While I think that’s important, that’s not necessarily something that really needs to be done this year and we might be able to delay that…and we can certainly do a budget amendment later if we find out health care costs was decreased to a significant level,” Yancey said.
Yancey pointed out that a tax rate of 78.65 cents per $100 valuation places the city at “basically even for the year.”
“We end up $450 in the positive if we take that PD demo out, and that, while it’s not a huge number, it is something pointing in the right direction, and I do think we need to keep in mind that next year we’re going to be hit with the rollback rate of 3.5 versus the eight [percent], but we’re not going to be the only city that’s going to be hit with that,” Yancey said.
He added that he thought this would be an easy way to lower the tax rate and still have a budget that accomplished virtually everything the city wanted to.
His motion to propose a rate of 78.65 cents was seconded by councilmember Joann Courtland.
Councilmember Charlie Youngs pointed out that by only dropping the demolition of the police station, the tax rate would decrease by almost one cent.
“I think this is a method to show the citizens of Copperas Cove we do feel their pain,” Youngs said.
Councilmember Kirby Lack disagreed with the lower rate and said that the rate has stayed the same for several years now.
“This is a band-aid to fix it for like right now, but then next year or the year after, we’re going to have to go up. Or y’all will, I won’t be here,” Lack said. “I just think it’s stepping backwards. I don’t want to go forward, I think we just need to leave it the same. We’re doing fine.”
Lack asked Haverlah how much the city would lose in tax revenue with the lower rate.
“Based on the proposed budget, it actually reduced available revenues by $914,” Haverlah said. “The reason why is because at the current tax rate, it increases the available revenues on the proposed budget by $141,000, so the difference between those two, you’re looking at $142,600 in revenue that would not be received based on a reduction in that tax rate.”
Haverlah also touched on the health insurance increase, which was a result from the city’s usage of health insurance exceeding the premiums, he said.
“Our expense has been greater than the premiums, so the health insurance company is going to ensure that the premiums that are charged each month in the next year are going to be sufficient in the next year to cover not only the overages from the current months but the anticipation that it might continue in the future months as well,” Haverlah said.
Haverlah informed council members that with the rollback rate capped at 3.5 percent, the rollback rate for FY 2020 would have only been 0.7 cents higher than the current rate of $0.7979.
“So, one of the things that the legislation does do is it definitely pushes that rollback rate much closer to what our current rate is and that is going to be based on the fact that the values have had a change in our community that then would have created additional revenue in Copperas Cove,” Haverlah said.
He added that his concern moving forward is the anticipation of the community growing and the city’s ability to continue to provide services at their current level. The level of service may be impacted or decreased if the tax rate is not sufficient to cover those services, he said.
When it came to a vote to propose the rate of 78.65 cents per $100 valuation, councilmembers Jay Manning and Kirby Lack voted no to propose that rate, while Joann Courtland, Fred Chavez, Dan Yancey, Marc Payne and Charlie Youngs all voted in favor of the proposal.
Council members voted to set two public hearing dates on the proposed tax rate for August 13 and August 20. They also voted to set a date of September 3, to adopt the proposed tax rate.