City of Tyler budget proposal focuses on infrastructure, public safety

Proposal calls for one-and-a-half-cent tax increase

City of Tyler budget proposal focuses on infrastructure, public safety

TYLER, Texas (KLTV) - Tyler City Manager Edward Broussard on Wednesday presented the proposed 2019-20 budget for the City of Tyler to council members Wednesday morning.

The proposal recommends a one-and-a-half-cent increase to the current tax rate of $0.244452 per $100 valuation, which will be used to fund street maintenance and public safety service.

The City also plans to continue the property tax freeze for residents over 65 years old and disabled who have applied for the benefit. About 8,300 households are currently exempt, according to the city.

The proposal also calls for an increase in the commitment to the street maintenance fund by one cent to a total of two cents. Something Mayor Martin Heines said a consultant suggested back in 2016 when the city’s roads were given a rating of 81.

“The more that we allow deferred maintenance to occur, the more it will cost us in the long run,” Heines said.

The proposed budget also calls for two additional police officers and firefighters, along with new bunker gear, additional training for firefighters, and $35,000 for timer locks on the bathrooms — a proposal prompted by cases of vandalism.

The city is also planning on spending $116,000 for new downtown parking meters that will have an app-related function. The City plans on doubling the existing parking rate.

Opportunities for public input on the budget are available by attending one of two Tyler City Council meetings at Tyler City Hall, 212 N. Bonner Ave. on the following dates:

  • Wednesday, August 28 at 9 a.m.
  • Wednesday, September 11 at 9 a.m.

Final adoption of the budget is scheduled for 9 a.m. at the Sept. 25 meeting at Tyler City Hall.

PRESS RELEASE FROM THE CITY OF TYLER:

Tyler City Manager Edward Broussard presented the proposed 2019-20 budget for City of Tyler services and programs to the City Council on Wednesday morning. The proposed budget highlights an ongoing commitment to rebuilding Tyler’s infrastructure and enhancing public safety.

“This budget continues our tradition of responsible government spending, while accounting for necessary public safety and infrastructure improvements,” said Mayor Martin Heines.

The City’s annual budget does not include capital projects paid for by half-cent sales tax fund, as its annual budget is adopted via a separate process. However,the City plans to move several items through the half-cent fund that enhance the projects outlined in the annual budget, including capital projects to improve traffic flow, renovate parks, add drainage and add public safety facilities.

“In the last 5 years, we have invested $90 million dollars in water, wastewater, streets, drainage, parks and public safety projects, said Heines. “Almost $73 million has been paid for in cash.”

General Fund Highlights

Sales Tax will make up 42% percent of the General Fund – which provides public services such as Police, Fire, Library and Parks. The City is conservatively projecting no growth in sales tax revenues from current fiscal year actuals.

“As was demonstrated in 2015 and 2016, fluctuations in sales tax have a profound effect on critical City services to residents,” said City Manager Edward Broussard. “We are very conservative with our estimation of how sales tax will grow.”

Property taxes make up just 31% percent of Tyler’s General Fund revenues. The City’s proposal recommends a one-and-a-half-cent increase to the current tax rate of $0.244452 per $100 valuation, which will be used to fund street maintenance and public safety service.

“The City of Tyler continues to grow. With the passage of Senate Bill 2 and the limitations it imposes upon cities to raise revenue, this year’s budget is designed to mitigate the City of Tyler’s sales tax risk for future years” said Heines. “This budget doubles the permanent funding source for street maintenance, funds public safety personnel that are critical to the growing needs of Tyler, and creates a rainy day account specifically for public safety funding for future declining sales tax years.”

In 2013, the City hired a firm to conduct a very detailed assessment of every city-owned street. At the time, the city’s average street condition was an 81 out of 100. In 2016, a follow-up assessment revealed our score to be 79, a two-point drop. In 2016, the city dedicated one cent of the property tax rate to street maintenance, investing over $750,000 dollars annually. However, according to the 2016 assessment, the optimal investment is a minimum of $1.4 million annually in sealcoat and crack-sealing to keep pace with the wear and tear on our residential roadways. This year, the city is proposing a full two cents of the tax rate be dedicated to the program, for a full funded amount of $1,546,952.

“Public safety and economic competitiveness are dependent upon smooth, functional roadways,” said Broussard. “We have built a sustainable Quality Street Commitment fund that will improve our streets for future generations.”

The program will be enhanced by $8.8 million invested in street reconstruction, as well as the current traffic study, paid through the half-cent sales tax program.

The remaining increase will be invested in police and fire service. The City proposes the addition of two new patrol officers and two new fire fighters in spring 2020.

“We allocate 69% percent of our General Fund for Public Safety, more than any other regional city,” said Heines. “This allocation helps us address the need for critical public safety services as the City continues to grow.”

Further public safety enhancements include the addition of a patrol vehicle paid through the general fund and the completion of two new fire stations paid for through the half cent sales tax fund.

The City will also roll over $3 million of unexpended revenue from 2017 and 2018 to establish a “Rainy Day Fund.” The fund will be utilized to prevent cuts to public safety during future economic recessions.

Finally, the city will invest $167,582 in the maintenance and repair of city park facilities, including renovations to the Glass Community Center facility and equipment. Replacing the outdated downtown Tyler parking meters is also proposed.

At Tyler’s new rate of $0.2599 cents per $100 valuation, a home valued at $150,000 would be assessed City property taxes of approximately $389.99 per household per year, or $32.50 per month. At a penny-and-a-half, the increase would translate to $22.31 annually.

“At 25.99 cents, Tyler’s property tax rate will remain- by far-the lowest in the State of Texas for a similarly sized city,” said Broussard. “In fact, the City would have to add 13 cents to the property tax rate, taking it up to 39 cents, just to match the second lowest: Midland, TX."

In 1994, Tyler’s property tax rate was 53.36 cents, with 16 cents of that utilized to pay down general obligation debt. Today’s rate is 51% percent lower, even in the face of steady growth in population as well as in the physical size of the community. The City of Tyler paid off their general obligation debt in 2008.

“We are able to keep our tax rate low and build for tomorrow mainly because we decided years ago to eliminate our bond debt and pay cash for capital projects, using a dedicated half-cent from sales tax generated within our community,” said Broussard. “The Half-Cent Sales Tax has been vital to building new roads and facilities, improving parks, investing in drainage and rebuilding city streets.”

Tyler will continue its property tax freeze for those over 65 and disabled who have applied for the benefit. Approximately 8,300 households in Tyler are currently taking advantage of these available exemptions.

The proposed budget projects revenue from fines and fees to remain consistent with 2018. Revenue in this category had previously declined considerably due to changes in national and state legislation and changes made to the collections process, including additional alternatives to pay with affordable payment plans and expanded community service options.

“Fines and penalties should never be about revenue generation,” said Heines. “The goal should be fair enforcement and deterrents for better traffic safety.”

Enterprise Fund(s) Highlights

Like the prior year, the 2019-20 City budget proposes rate increases within enterprise funds. Tyler has several departments that are considered enterprise funds, meaning they do not receive tax revenue and must generate their funding through fees for services they provide. This funding is then returned to the operation in the form of maintenance, repair and replacement of equipment.

Tyler Water Utilities (TWU) is one of those departments. TWU is proposing a 5% across the board rate increase to water and sewer customers. With these changes, the average customer that uses 5,000 gallons of water per month will see an increase of $6.01 per month. Industrial and commercial businesses using 30,000 gallons of water per month will see an increase of $13.51 monthly.

Despite the increase, Tyler’s rate remains well below average utility rates for cities our size in the state of Texas.

Consumers will also see a $3.24 increase to regulatory compliance fees on their bills, which will generate $1,299,960 in revenue restricted to service debt issued for EPA regulatory compliance. The new total to consumers will be $6.13.

During 2018 alone, $9.6 million dollars were completed or are underway, including water treatment plant improvements, water-line looping, water-line replacement and more. With this budget, the City plans to cash-fund approximately $12 million in water-system and waste-water system repairs. During the next 10 years, the City expects to cash-fund $56 million in utility system improvements.

“Water & sewer systems and drainage impact every aspect of our daily lives, said Heines. “During my time as Mayor, we have invested heavily in our infrastructure. It has not only defined the last 5 years, it will shape the next century in Tyler, Texas.”

Solid Waste is also recommending an increase to residential rates, proposing a $0.31 increase for twice weekly residential trash pickup. Residential trash pickup has been historically subsidized by commercial trash services.

Workforce Highlights

During the upcoming budget cycle, the city will go back to its blueprint, merit-based model for employee compensation. Both civil service and non-civil service employees will receive a 2% merit based increase to their base pay, as well as an additional 1% merit-based lump sum.

“We must be mindful of market rates and remain competitive in order to attract and retain competent, qualified staff,” said Broussard. “We must balance this with the effect increases and market adjustments have on future budgets.”

In 2018, the city increased the living wage from $10.55 per hour to $12 per hour, to remain competitive with the private sector. Overall, the City has maintained roughly the same number of employees since the mid 1980’s, while the physical size of the city and population has almost doubled.

“Per our most recent citizen survey, 84% of respondents indicated that the City of Tyler is a great place to live,” said Broussard. “This is due to the high quality services our employees provide.”

Public Input

Opportunities for public input on the budget are available by attending one of two Council meetings at Tyler City Hall, 212 N. Bonner Ave. on the following dates:

  • Wednesday, August 28 at 9 a.m.
  • Wednesday, September 11 at 9 a.m.

Final adoption of the budget is scheduled for 9 a.m. at the Sept. 25 meeting at Tyler City Hall.

About the City of Tyler

The City of Tyler, known as the “Rose Capital of the World,” is home to approximately 115,000 residents and is the major regional center for east Texas. Approximately 250,000 people come into the city each day to work, shop, and seek medical care or attend one of our four colleges and universities. Through conservative financial planning, we provide top-quality customer service to citizens, while paying cash for infrastructure needs and ensuring that the City’s collected revenues exceed expenditures. The City of Tyler has no tax supported debt and an AAA bond rating, a water supply that will last the next 75 years and we have landfill space to last until 2110. The City also provides residents with more than 1,000 acres of parkland which comprise 27 parks throughout Tyler. Our competitive fire protection rating is held by only 4% in the State and our Police Department in one of the first accredited in Texas. Our vision is to be the standard of performance excellence in local government. Learn more by visiting us online atwww.CityofTyler.org.

About the #TimeToBuild Campaign

The state of our infrastructure is one of the most pressing issues we face as a community. Our jobs, quality of life, economic competitiveness and public safety are all dependent upon it. Much of Tyler’s infrastructure (streets, water systems, drainage systems and sewer systems) was installed in the early 20th century and has reached the end of its useful life. Three years ago, the Tyler City Council made a pledge to modernize and build anew our community’s infrastructure. In the last 5 years, we have invested $90 million dollars in water, wastewater, streets, drainage, parks and public safety projects, said Heines. “Almost $73 million has been paid for in cash. The benefits of this stronger, better infrastructure system will be far-reaching and long-lasting. But we are not finished. The future does not wait and neither do we. Today it’s #TimeToBuild! Learn more at www.TimeToBuildTyler.com.

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