05-Council Minutes from the meetings of August 16, 17, and 23, 2010

Home Browse Search

are not immune from the weak economy. Although there are nascent signs that the United States economy appears to be in a weak recovery and Texas is repeating its "last in, first out" to the national recession, the proposed FY 2010-2011 budget is conservative in its revenue estimates. Staff was given the charge at the beginning of the budget process to (1) absorb the debt service for the South Collegiate Drive certificate of obligation, (2) maintain the same tax rate of $0.52/$100 (the same as it has been since FY 2008-2009 and the lowest rate since FY 1995- 1996), and (3) avoid staff layoffs if possible. Consequently, staff developed budget proposals for their departments assuming essentially the same expenditures as allocated in FY 2009-2010. Requests for additional items were to be submitted with justifications and were reviewed by the City Manager and Director of Finance and Human Resources. A cost of living allowance (COLA) is not included in the proposed budget due to revenue limitations (four of the last nine years the City has not given a COLA). The following sections highlight points of interest in the budget. General Fund Revenues 1. Tax Rate. According to the Lamar County Central Appraisal District, the total taxable value in Paris decreased 1.7 percent ($26,379,443) from 2009 and the proposed budget assumes the same $0.5200 tax rate as FY 2008-2009 and FY 2009-2010, as directed by Council. Consequently, the effective tax rate, i.e. the rate that generates approximately the same amount of revenue as FY 2009-2010, is $0.5319 and the rollback rate is $0.58813. The proposed $0.5200 rate is a 2.3 percent decrease in the amount of City property tax paid to the City. 2. Sales Taxes. Daisy Farms is expected to complete their first phase of construction in FY 2010-2011 but the positive impact of their development and operation will be offset by the loss of 230 jobs at Sara Lee. As a result, budgeted sales taxes are estimated to decrease by 3.3 percent from the previous year, with the corresponding decrease to the budgeted General Fund revenue of $195,000. 3. Franchise Fees. Fees from Atmos Gas and Oncor are budgeted $273,700 less due mainly to lower prices of their services because petroleum prices are significantly lower than 12-24 months ago. This loss is offset somewhat by a $105,000 increase in franchise fees paid by Suddenlink Cable. Suddenlink's three percent franchise agreement with the City expired in March 2010 and Suddenlink was required by statute to move to the State of Texas franchise agreement, which mandates a five percent fee. 4. Building Permits. Completion of Paris Independent School District's building program and a slowdown in building reflecting similar reductions in Texas and nationally, have combined to create a predicted drop in budgeted building permit revenue of 18.8 percent ($15,000).