If the Leander City Council adopts the proposed fiscal year 2019 budget as presented, homeowners in the city could see minimal change in their city tax bill despite rising property values.
At its Aug. 16 regular meeting, Leander City Council reviewed the proposed budget, which includes a decrease of the city’s current property tax rate from 57.78 cents to 55.18 cents, which is also less than the city’s calculated current effective tax rate of 56.68 cents.
A second public hearing and a vote to adopt the budget is scheduled for the council’s consideration on Sept. 6.
"We always want to meet or exceed expectations of high-quality city services while fulfilling our community's desire for affordability," said City Manager Kent Cagle. "A major priority this year is the city workforce. We're strengthening retention with improved merit-based pay and expanding our core public safety and development services to meet the demands of unprecedented growth."
According to calculations related to active water utility accounts over the past month, city planners estimate Leander's current population to be nearing 60,000. Since 2015, an annual growth rate of 10 percent or more has held Leander in the list of fastest growing cities in the country.
City documents say priorities within the budget are compensation and benefits plans for city staff, infrastructure maintenance, improving technological and management skills among city staff, implementing the second phase of the 2016 bond program, opening Fire Station No. 5, begin construction of the Northline project and to continue tax rate reduction efforts.
“The City added over $795 million in new property this past year and the overall tax base increased by 20 percent from $4.567 billion to $5.483 billion in taxable value,” Cagle said in the city’s presentation documents.
“The progress that we have made on the tax rate is unprecedented in the region and the state,” said Cagle. “In six consecutive years, we have reduced the rate from 67.04 cents per hundred dollars. Even with a final adoption of a rate equal to the Effective Tax Rate that would represent a 10.36 cent decrease while achieving improved service levels across all our departments.”
With the proposed budget, the city will see increased funding for street maintenance, as well as funding for the fifth fire station and 12 new firefighters. Additionally, the city plans to add two patrol and two criminal investigation positions in the police department, construct public ballfields and a regional park. The budget also calls for “significant compensation improvements” for the city’s police and fire departments and opening the city’s first senior activity center.
Cagle indicated in the city’s budget documents the proposed tax rate reduction was, in part, made possible by significant expansion of residential home building, multifamily housing, and commercial developments like St. David's Emergency Center in Leander's transit oriented development district. Those items contributed to $558.7 million in new taxable property since last year.
Other changes to the proposed budget could come from a franchise agreement renewal with Pedernales Electric Cooperative. If approved by both parties, updated terms and conditions would raise Leander's franchise fee from 2 percent to 4 percent, generating an additional $600,000 in revenue for the city. Franchise fees are paid by PEC for the use of public rights-of-way to manage electricity throughout Leander. The increase to 4 percent would reflect other municipal franchises in the Austin region.
"As always, there are competing public policy goals in our tax rate and budget proposals, but I believe we have achieved a nice balance between improving service levels and keeping up with demand while providing tax rate relief to our residents," said Cagle. "We have also taken the first step to reducing our water rates without endangering our water supply or ignoring infrastructure maintenance needs."
The Leander City Council will meet on Sept. 6 at Pat Bryson Municipal Hall, 201 N. Brushy St., Leander.