Left to right: San Marcos Finance Director Steve Parker, Interim City Manager Laurie Moyer, City Councilmember Gaylord Bose and Councilmember Ryan Thomason at last week’s budget workshop. Photo by Sean Batura.
By SEAN BATURA
As the San Marcos City Council convened for a first look at the proposed Fiscal Year 2011 budget last week, the city staff proposed no increase in the property tax rate of 53.02 cents per $100 of taxable value.
However, the city’s fund balance is falling, and city staff advised the council that utility rate increases will have to be seriously considered in the near future.
Interim City Manager Laurie Moyer said the last electric rate increase was a two percent increase in 2006. Moyer said capital improvements projects such as the laying of underground electric infrastructure were responsible for significant electric utility fund expenditure increases.
“The bottom line is, there is going to need to be some increase, because there just hasn’t been anything done in quite a long time,” Moyer said.
The total proposed budget, including operating costs, debt service and enterprise operations, came to $145,397,187, with revenues projected to reach $142,319,924. To meet the costs of governing, the city is projecting an allocation of just more than $3 million from the fund balance, which would bring the fund balance down to $40,756,255 by Sept. 30, 2011.
As of Oct. 1, 2009, the start of the present fiscal year, the fund balance was $50,433,117, meaning the city is in the middle of subtracting $10 million from its fund balance. The fund balance has fallen nearly $7 million this year, when the city estimates revenues of $133,583,220 against expenditures of $140,182,818.
Property taxes represent the only decrease in revenues for the proposed FY 2011 budget, coming $165,492 lower than this year for a total of $5,449,655. The highest revenue increase for the proposed FY 2011 budget is a rise of $365,347 in sales taxes for a total of $18,632,663.
As the economy struggles, interest income for FY 2011 is projected to rise slightly to $110,000, compared to $81,354 for FY 2010, $360,235 for FY 2009, $409,357 for FY 2008, and $683,500 for FY 2007.
“Anticipated interest earnings are based on market projections of interest rates, which have seen a steep decline in the last 24 months,” according to the FY 2011 proposed budget document. “The current rate of return is approximately 0.74%. Some funds are invested over longer periods for a higher return and in the current fiscal year, the Investment Policy was modified to permit 5-year investments for Reserve Funds.”
Including one-time expenditures, estimated FY 2010 general fund operating expenditures are $39,178,891, compared to $41,144,858 proposed for FY 2011. Significant changes in proposed FY 2011 general fund operating expenditures include $1,292,156 more for personnel services, which would total $29,666,521, and $568,272 more for contracted services, which would come to $5,169,473.
Most city departments get more to spend in the proposed FY 2011 budget. The community services department’s budget is proposed to grow the most, with $533,843 more than this year for $6,747,362 in FY 2011 expenditures. Fire services is proposed to have the second largest increase in departmental expenditures, with $516,498 more than this year for $5,718,363 in FY 2011 expenditures.
One-time expenses in the proposed FY 2011 budget include $120,695 for library books and $500,000 for the replacement of vehicles and equipment.Email | Print