19 - Memo to GB - Proposed FY24-25 Budget - July 2024 (002)

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our operations are severally disrupted. Mr. Dabbs has expertise in this area that we wish to task him with overseeing and managing. He will continue to perform many of his current duties butstepping up to assist the IT Department with advancing our security measures online. As City Management, it is one of our many duties to recognize and promote opportunities for greater efficiency for our municipal operations and service to our community, particularly when those opportunities exist from within. Given the available in-house skill and talent we have in Mr. Loranger and Mr. Dabbs, it makes total sense to promote theirabilities forward and upwards to perform even greater service to our community. 8.Maintaining Operational Services –Despite the significant challenges and priorities mentioned above, the Proposed FY24/25Budget is also designed to maintain operational services for our citizens.Throughout the entire budget, it is clear to usthat the City Staff continue to do a great job of being frugal, consistent, and conscientiousof the taxpayerdollar.Departments are steadily providing the services under the substantially same budgets year after year, only withminimal increases to account forincreases in prices.Wecontinue to set individual line-itembudgetssuch that it matches the true cost to provide the service as seen over the prior fewyears.Any adjustments up or down are for known reasons (a new piece of equipment, dropping the need for a particular subscription, better pricing through new bids, increases in service costs, etc.).While there is much more we would like to do for our citizens, we respect that resources are limited and will continue to use them as wisely as we can to impact themost individuals possible. 9.Texas Property Tax Reform and Transparency Act of 2019 –This Act was passed by the Texas Legislature in 2019.This represents a fairly comprehensive amendment to how Municipalities in Texas prepare their budgets.This Act first took effect inFY20/21.A large amount of the Act changes how the Texas Comptroller operates, but there is a fair amount of edits to how the City of Paris must handle the procedure of passing a budget (notices, deadlines, public hearings, content of material produced, etc.), but the primary and long- lastingimpact that the City of Paris will feel for years to come is the restriction in Property Tax Growth.The Texas Municipal League (TML) has produced an Explanatory Q&A, found on their website.The reader can also read SB2 directly, but I would strongly recommend starting with the TML Q&A first to give you an idea of what it is you are reading in the Act.The Act is rather complicated. The TML Q&A does a very good job of capturing the essence of SB2. “At its most fundamental level, S.B. 2 reforms the system of property taxation in three primary ways: (1) lowering the tax rate a taxing unit can adopt without voter approval and requiring a mandatory election to go above the lowered rate; (2) making numerous changes to the procedure by which a city adopts a tax rate; and (3) making several changes to the property tax appraisal process.” The Act produces the following formula when calculating our new Property Tax Rate: “Voter-Approval Rate = (No-New-Revenue Maintenance and Operations Rate x 1.035) + (Current Debt Service Tax Rate+ Unused Increment Rate)” In short, the City of Paris can only growits Maintenance and Operational Tax Rate by 3.5% each year, plus unused increment rate from previous years,without, possibly, triggering a mandatory election (hence the “Voter Approval” terminology).Cities with populations less than 30,000 have an additional threshold called the “De Minimis Rate” that is calculated differently (not shown here), would exceed the Voter-Approval Rateand would give the citythe ability to raise additional Property Tax without triggering the election.In this situation, an election would only be required if the final requested property tax rate exceeded both the Voter Approval Rate as well as the De Minimis Rate.It is not recommended that the City of Paris utilize this Page 10of 18