June 4, 2019
By: Dwayne Page
City leaders are poised to raise Smithville property taxes for the 2019-20 fiscal year.
The proposed increase is 25 cents per $100 of assessed value. If approved, the new city tax rate would be 89 cents, up from the 64 cents taxpayers currently pay.
The Smithville Mayor and Aldermen will meet in special session Monday night, June 10 at 5:30 p.m. at city hall to adopt on first reading a new budget for the 2019-20 fiscal year and to set the new property tax rate for the year beginning July 1.
A work session was held Monday night following the monthly city council meeting to hash out what extras are to be included in the new spending plan.
The largest project on the table is a new police department building. The proposed 7,805 square foot structure would be built on property donated to the city on the north side of the city hall/fire department complex at Don Cantrell Street.
The cost of the new facility could be as much as two million dollars to be funded either on a long term note or bond issue. From the start date of construction, projections are the building could be completed possibly within one year.
The mayor and aldermen recently met with Wayne Oakley of Studio Oakley Architects, LLC who submitted a bid to design the new police department building for the city at $105,000 which has been included in the new budget.
Regardless of the proposed police department project, the city’s general fund is expected to finish the 2019-20 fiscal year in the red without new revenue according to Janice Plemmons Jackson, the city’s financial advisor. Current deficit projections are at about $200,000 or just over $300,000 if the city adds the engineering costs for the police department building.
Although the municipality has water/sewer and general fund surpluses totaling several millions of dollars, city leaders say the government can’t continually dip into those surpluses to operate.
By increasing the tax rate by 25 cents, the city is expected to generate $350,000 in new revenue which could get it out of the red and possibly create a small surplus by the end of 2020 without additional significant spending.
The water and sewer fund may also be a problem down the road.
Although water and sewer rates were last increased in 2017 the revenue is not keeping pace with expenditures which may force city leaders to take another look at them next year (2020-21). The city’s water and sewer fund is projected to be in the red by $205,147 this year and $323,833 by June 30, 2020. Under state law, if a utility continues to operate at a loss for more than two years and doesn’t address it, the state has the authority to force rate increases to make it solvent.
City water customers currently pay $7.25 per thousand gallons of usage. Rates for customers outside the city limits are $10.88 per thousand. City sewer customers pay $6.75 per thousand gallons.
Water tap fee increases have been included in the new budget for customers both inside and outside the city.
A 2% pay raise has been figured into the budget for city employees who have topped out on the wage scale and funds for employee disability insurance coverage to help protect city employees from loss of income in the event they are unable to work for a period of time due to illness, injury, or accident while off the job. Capital outlay expenditures total more than $600,000, much of which includes grants for airport easements and clearing and sidewalk improvements. Plans are to purchase two used police cars and a 16 foot flat bed trailer for the fire department.
Capital outlay expenses for the water and sewer include the purchase of a Kubota trackhoe, trailer, diesel truck, 9 foot dump body, camera system for leak detection, and engineering fees and sewer rehab project construction costs. The city has applied for a $500,000 Community Development Block Grant to help fund the sewer rehab project.