Tiny Tax Hike In West U

September 15, 2009

After a weekend “scrubbing” of the City of West University Place’s 2010 budget, city staffers told the West U City Council that there would be a tiny tax rate increase this year.

City Manager Michael Ross and City Finance Director Rhonda Daugherty revised a resolution before the City Council Monday, which set two October public hearings on the city’s tax rate.

Although city staff had proposed publishing notice of two public hearings on a possible 37 cent per $100 property tax – an increase from West U’s current 35.9 cent tax rate – Daugherty said the tax rate in West U would increase only “by about three thousandth of a cent.”

The council will hold two public hearings on the tax rate on October 12 and October 19.

Ross did not say specifically which departments’ budgets were scaled back during a review of city spending.

“There were just further cuts and we will be continuing to look at the budget before we present it to City Council,” Ross said.

The $13.8 million in parks bonds approved by voters in 2008 — for the new West U Rec Center, Colonial Park pool and the Community Center — will not affect the city’s 2010 fiscal year budget, Ross aid.

“They will have no impact on next year’s budget,” Ross aid. “That debt doesn’t show up until the city budget in 2011.”

One factor affecting West U’s budget is a slowing of new home construction in the city.

Last year, new construction added $58 million to West U’s appraised property tax rolls – a 2 percent increase that is a dramatic slowdown from previous years.

West U Mayor Bob Kelly said that the city appears to be weathering the economic storms facing other area municipalities.

“The appraised value of property in West University Place went up, even with the challenges,” Kelly said.

Property values in West U are currently appraised at slightly more than $4 billion, Dougherty said.

Because of the increased property values in West U, City Councilman George Boehme said that the council will be considering a tax increase during its deliberations on the budget.

“In fairness, it is a tax increase, but it is a tax rate decrease,” Boehme said. “To the homeowners of West U, it is a tax increase.”

Daugherty explained that it was neither.

“It is a tax revenue increase, but we are neutral on the tax rate,” she said.

Boehme said, however, that the increase in property values meant that most West U residents would pay higher taxes to support city government.

Boehme said the purpose of Texas’ truth in taxation law was for city leader to keep taxpayers informed about the impact of their decisions.

“I mean, we are generating more revenue and that is going to be paid for by the homeowners and so we are having a tax increase,” Boehme said. “For the last 8 years, they’ve lowered the taxes, and the year I get elected we’ve got to raise them.”

Councilman Steven Segal said: “There hasn’t been a year where we haven’t had higher revenues, even if the tax rate has been lower, because of the increase property values.”

The city council’s action did not set the tax rate for the 2010 fiscal year. That decision will be made after the council considers and approves a 2010 budget.

The council must adopt a new budget by October 26.

In other action Monday, the council:

*Directed that a $1 million grant from the Friends of West U Parks Inc. be spent on construction at the new Rec Center.

The funds were made available through a 2004 pledge from former West U Mayor Linda Lewis, and her husband, Phil. Their Lewis Charitable Foundation pledged a $500,000 dollar-for-dollar matching contribution to the Rec Center, if the Friends could complete their fundraising by February 28, 2007.

*Approved spending $389,000 in insurance payments from the Texas Municipal League for damages by Hurricane Ike to the Rec Center, Colonial Park and the West U Community Center. Those funds will be used for the new construction and renovations to those facilities.

*Approved the appointment of Mayor Pro Tem Bob Fry as the city’s representative on the Houston-Galveston Area Council, with Councilman Chuck Guffey as the alternate.

InstantNewsWestu Staff

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