by SEAN BATURA
San Marcos City council members are gearing up to approve the city’s fiscal year 2012 budget, which is proposed to be slightly larger than FY 2011 and calls for the same property tax rate. City staff propose a budget of $149.5 million, an increase of .59 percent, or $883,075, from the current fiscal year.
The city manager’s office proposes a FY 2012 general fund of $42.6 million that would constitute an increase of 2.4 percent from this fiscal year. Increases in compensation for police and other employees total $328,000 and $336,000, respectively, both of which constitute the majority of the increase proposed for the general fund. The next-largest increase proposed for FY 2012 is $157,000 in police overtime adjustments.
“We have actually reduced almost 1,000 hours of overtime…in the last two years,” said San Marcos Police Chief Howard Williams. “But that still doesn’t balance off the additional money and the additional requirements that fall outside my control. When the salaries go up, the overtime expense goes up.”
The city’s savings account, or reserves, are projected to have decreased this year by 9.2 percent, or $1,231,000. The city’s reserves are projected to increase during next fiscal year by two percent, or $246,000.
The city’s policy is to save at least $0.25 for every dollar it spends, and shoot for saving $0.33 for every dollar spent. The city’s reserves are proposed to be about $12,392,000 by the end of next fiscal year, which would constitute 30 percent of operating costs. City staff estimate reserves to be 33.4 percent of operating costs this year.
One of San Marcos City Manager Jim Nuse’s major recent policy decisions was to reduce the proportion of the property tax rate devoted to paying off debt. Nuse proposes that 56 percent of every tax dollar be used for debt next budget year, with a long-term target ratio of 50 percent. City staff said they can achieve this ratio by not borrowing as much money.
“We managed to defer about $43.4 million in new bond projects in 2011 and 2012,” said City of San Marcos Finance Director Steve Parker. “All we’re actually anticipating is about a $5-7 million bond issue in the electric utility this year.”
In FY 2009, 62 percent of every tax dollar was used to pay for debt. In FY 2010 and FY 2011, 60 percent of every tax dollar went to pay for debt. The proposal to use 56 percent of every tax dollar for debt would free-up $616,000 for other uses, Parker said.
City staff estimate the beginning unrestricted debt fund balance will be $4,008,967 for FY 2012. The beginning debt fund balance was $5,676,434 this fiscal year. The city’s total outstanding debt is $76,840,000, according to Parker. Total outstanding debt was $81,805,000 at the beginning of this fiscal year.
Another FY 2012 budget presentation is scheduled for Aug. 11 at 6 p.m. at City Hall, and a public hearing on the matter is scheduled for Sept. 6 at 7 p.m., same place.
In order to collect the same amount of property tax revenue next year as it will this year, the city would have to increase the property tax rate by $0.0039 per $100 of taxable valuation — which would yield about $120,000, according to Parker. By not increasing the ad valorem tax rate this fiscal year, the city made about $750,000 less than it did last year in property taxes, Parker said.
Parker said staff do not propose to increase the property tax rate because they do not want to increase the financial burden on residents who are already facing likely increases in water, wastewater, and drainage rates.
“We’re going to pick our battles,” Parker said.Email | Print