The Lampasas City Council plans not to raise electric rates, after all.
The council had discussed a possible rate increase to boost revenue for the upcoming fiscal year. On Monday, however, the council stated its approval for a plan that will balance the budget and give staff members a 1.5 percent pay increase, while leaving electric rates at the current levels.
The council's July 31 meeting ended with a surplus of about $36,000 in the proposed budget for the new fiscal year. Because $36,000 would not have been enough to fund the 2 percent staff pay increase some council members said they supported, the council talked about possibly charging more for electricity to increase revenue.
At the July 31 meeting, however, Mayor Pro Tem TJ Monroe and Councilwoman Delana Toups said the city should not increase what it charges for electricity. Mayor Misti Talbert and Councilwoman Cathy Kuehne asked for city departments to find ways to trim costs in the proposed budget before the council finalizes the budget.
Based on that direction from elected officials, the staff proposal presented earlier this week included a number of expense reductions -- ranging from $500 to $12,199. Those expense reductions, plus an extra $6,600 the golf course staff believes it can get for cart shed rentals, boosted the proposed budget surplus to about $91,000 -- without an increase in electric rates.
Talbert said she appreciates the staff's work to tighten the budget, and she said city employees deserve to share the surplus.
The council has discussed employee compensation options ranging from meritbased raises to pay increases for all staff members. Officials said an across-the-board increase could be the same percentage for each employee, meaning higher-paid staff members would get a larger raise in absolute terms, or the same dollar amount for each employee.
On Monday, council members said City Manager Finley deGraffenried should decide what method to use for increasing employee pay. DeGraffenried said he recommends giving a 1.5 percent pay boost to each staff member.
Another budget-related issue also was resolved Monday, as the council voted unanimously not to increase the property tax rate in the upcoming fiscal year.
The council set the proposed tax rate at 39.5218 cents per $100 property valuation -- the same levy the city has used for several years. The vote for a proposed tax rate sets the maximum rate the city may charge, although the council technically could lower the rate when the 2019 budget is finalized next month.
The city will hold public hearings about the tax rate Aug. 27 at 7 p.m. and Sept. 4 at 5:30 p.m.
A property owner's tax bill is calculated by multiplying the tax rate times the value of the property. Therefore, if the Lampasas Central Appraisal District raises a property's value, the owner could owe more city taxes even though the tax rate is not increasing.
Senior citizens in Lampasas, however, can have their homestead property taxes frozen. That way, seniors' homestead tax bills would not go up even if property values increase.
An exception to the freeze is if the homestead owner has enlarged or remodeled the residence. In that case, taxes can increase based on the property improvements, but then they are frozen at that level for future tax years.
WATER RATES AND RECYCLING
Although the city's electric rates are not set to increase, water rates will go up to help the water/wastewater department become more financially self-sustaining.
The council plans to increase the water base rate by $1.30 per month and intends to raise the consumption charge by $0.05 per 1,000 gallons.
Those rate increases are projected to boost water/wastewater revenue by about $158,000.
Council members have said the water/wastewater department needs to increase its revenue so it can sustain the ongoing costs the department incurs for infrastructure work.
Even with transfers in from other sources, the water/wastewater department spent more than it made from fiscal year 2014 to 2017. The deficit was at least $141,000 each of those years, according to city statistics.
DeGraffenried recently projected this fiscal year will end with a water/wastewater surplus of about $15,000. That amount, however, is supported by a transfer of $100,000 into the department. The surplus also results, in part, from the fact that the city will not be able to complete all the water/wastewater projects it planned to do this fiscal year, according to deGraffenried.
Along with raising water rates, the city plans to charge a $0.50-per-month fee on utility bills to pay for a recycling program.
The city does not intend to offer curbside pickup of recyclable items. As a less expensive option, however, the staff plans to let people drop off recyclable items at the public works yard on Brown Street.
The recycling program will cost about $12,000 per year, and the $0.50-per-month fee will generate about $15,600 in annual revenue, according to city staff estimates.
No one spoke during a public hearing Monday about the city's proposed budget.