Tyler

By CINDY MALLETTE
Staff Writer

Tyler City Council members today will review the proposed Fiscal Year 2008-09 budget, trimmed of a lot of fat in the face of a difficult economic year.

Budget constraints -- due in large part to high fuel prices -- will mean the first property tax rate increase in more than a decade, city officials said in a meeting with the Tyler Paper editorial staff on Monday. The proposed rate of 20.4 cents per $100 valuation is half a cent more than last year's 19.9 cents per $100 valuation.

Residents can also expect to see increases in a number of fees, including water and sewer service charges, airport parking fees and municipal court fees.

Mayor Barbara Bass says the budget is focused on the city's future, demonstrating a commitment to long-term goals while continuing to operate with a business-minded approach.

"With rising costs, each and every department has had to tighten their belts to develop a budget that allows Tyler to enjoy exemplary services while maintaining a low tax rate," she said.

Three areas will take priority in the $98.2 million budget: growth, redevelopment and the work force.

This year's proposed budget is $3.3 million more than last year's $94.9 million budget, an increase of 3.5 percent. It includes a 4 percent productivity raise for city employees.

"If there was a pleasing part to this budget, in a year like we're having, it's the fact that we are still able to provide a productivity pay increase for our employees," said City Manager Bob Turner. "We're very proud of that."

Tyler's taxable values grew by $420 million from last year's $6.14 billion, up to $6.56 billion. The jump represents a 6.8 percent increase over last year's appraised values, but is a much lower increase than the city's seen in previous years. Mark McDaniel, city manager designate, said the city saw taxable value rates grow by double-digit numbers for the past three years.

"We're seeing a leveling off," McDaniel said.

The city has also seen a growth rate of 7 percent each year in the number of over-65 tax exemptions. McDaniel said the city expects more than $775 million to be skimmed off the top of potential property tax revenue because of the exemption, $50 million more than in the 2007-08 fiscal year.

"You can see the impact it's had since it was put into place back in the 2004-05 fiscal year," McDaniel said. "It's grown 7 percent annually, and that's a big factor when you look at why our increase is only 6.8 percent.

City leaders said that, even with appraised values on the rise, the revenue generated from the current tax rate wouldn't be enough to cover increases in the budget, including the cost of fuel. The city plans to spend $2.9 million on gasoline and diesel next year, up $327,000 over last year's budget.

Turner said the city took a proactive approach to its budgeting process.

"We had departments tighten up first, and then they submitted their budgets," he said. "We looked at every one of those budgets and we determined the cuts we needed to make."

The city departments were asked to submit a budget based on 95 percent of their current year operating costs.

"We told them they had to determine what they could do without," he said. "They did a great job bringing in their 95 percent budgets, and we are extremely proud of them for doing that."

The city reduced its budget projection by more than half a million dollars through its 95 percent budgeting system. City officials also plan to freeze six positions within the city, saving $173,000, as well as implement a cost-sharing program for employee health insurance. The city and its employees will split the cost of a 6 percent increase in health insurance premiums.

Even with the belt-tightening, the city determined it would need the half-cent property tax rate increase to help fund the budget.

"The proposed rate remains lower than the rate two years ago," McDaniel said.

In 2006, the property tax rate was 22.37 cents per $100 valuation. The rate adjustment for the 2008-09 fiscal year is 61 percent lower than the rate in 1995, and city officials say Tyler will continue to have the lowest property tax rate among Texas cities of a similar size.

Sales tax revenues are expected to grow by about 5 percent in the coming fiscal year, city officials say, going from $24.4 million to $25.6 million.

More than 45 percent of the city's general fund is supported by the sales tax.

"Sales tax continues to be the largest and strongest form of funding for our budget," McDaniel said. "We couldn't be more thrilled with the way we're doing in terms of retail sales tax."

The city continues to maintain caution, however, and keeps a reserve of 15 percent of the total budget in case of a decrease in sales tax revenue.

Residents will see a 6 percent increase in water service charges and another 6 percent increase in sewer service charges. The average cost per household for both fees would come to about $2.91 per month. The increases are going toward utility revenue bonds that will pay for the extension of water and sewer infrastructure north along U.S. Highway 69 and for the purchase of property to build a south Tyler sewer treatment plant.

Tyler Pounds Regional Airport will add $2-per-day to the current short-term parking fee. Tyler's Municipal Court will also add $2 to its current Juvenile Fund fee, bringing the total cost to $4. The fee is added to citations issued within the city. The increase will go to support additional technology and resources for the Partners for Youth program.

The budget includes funding for six new firefighter positions, two traffic officers, a traffic sergeant, and five new firefighting apparatus. The new positions and equipment are necessary, city officials said, because growth within the city demands enhanced public safety.

Traffic management will also be improved by the installation of an operations center to closely monitor signals and traffic patterns, officials said. The city will also initiate Phase II of the adaptive controls signal system on the west side of Loop 323.

The city plans to launch a new revitalization program in the next fiscal year. The Neighborhood Empowerment Revitalization Zone pilot program will create incentives such as fee exemptions and rebates for developers to build new subdivisions or to redevelop existing neighborhoods in Tyler's north end.

Work force initiatives in the proposed budget include maintenance of city employee benefits, including tuition reimbursement and retirement plan contributions, in spite of rising costs. The city will also undertake a pay-plan study to assess job duties and pay rates for positions within the city compared to other municipalities and the private sector.

"Rather than adding a lot of additional personnel, we are committed to having the highest skilled and productive work force in the region," McDaniel said.

The council will review the budget at its regular meeting at 9 a.m. today in City Hall, 212 N. Bonner Ave. This is the first public presentation of the budget. Two public hearings are scheduled for 9 a.m. Aug. 27 and Sept. 10 at City Hall to allow residents the opportunity to provide feedback on the proposed budget. The council will adopt the final budget and tax rate on Sept. 24.