Long-neglected infrastructure and maintenance needs could convince Bandera’s City Council to hike utility rates about twice as much as normal next year and add two monthly fees to utility bills in addition to increasing the property tax rate by more than 9 cents per $100 valuation.
The expanded revenue options were examined by council in a workshop on Thursday, Sept. 12, and while no clear consensus was reached on what to do with utility rates and fees, the sense was they would have to increase to keep the city’s water and wastewater system in good working order and to plan for improvements in upcoming years.
“We have not been keeping up with the times for the last seven years or so,” said Councilman Brice Cavanaugh after the meeting. “We don’t want to raise taxes, but we have to provide services for our constituents. It’s pretty much unavoidable.”
Council opened the Sept. 12 meeting with a public hearing on the budget proposed for the 2020 fiscal year, and no one from the public had a comment about a spending plan that is rapidly being completed.
That was the case despite plans calling for the city’s property tax rate to jump to 49.83 cents per $100 valuation, almost 9.5 cents per $100 valuation more than the current tax rate.
Almost 7 cents of that increase essentially is set in stone since council committed itself to that much of a tax hike to pay off the a $3 million loan from the state that is being used to upgrade the city’s water system.
The revenue generated from the added tax hike would help the city take steps toward addressing street repairs and other needed projects that have been ignored for years, official said.
Mayor Suzanne Schauman said the lack of criticism from the public about the proposed tax hike indicates that “people see we have to do something to take care of the needs of the city.”
“We need more money,” the mayor said.
She said the hikes that currently are being examined by council would increase residential water and sewer rates by 10 percent next, after 5 percent hikes in recent years, and raise commercial water rates by 30 percent.
They also would boost garbage collection fees by 8.5 percent across the board.
In addition, two new monthly fees are being contemplated for utility users, a $2 fee to cover the cost of road improvements that arise because of damage caused to streets by water and sewer projects and a $3 fee to begin setting aside money for costly wastewater system improvements the city anticipates in the coming years.
They are needed the mayor said, even though the city learned recently that it had $202,000 left from an $868,000 transfer the city’s general fund made to the utility fund in 2017-2018. That money could be rolled back into the general fund to cover general operations of the city.
Councilman Tom McEachin said a rate study the city completed showed it was charging customers far less for water and sewer services than most area towns, which he felt has kept long-term projects from being undertaken.
He’s pleased that the revenue proposal for the new year combines rate increases with new fees so it has a more balanced impact on residents and would not hit low income residents too hard.
Council will hold another public hearing on the budget on Wednesday, Sept. 18, at 5:30 p.m. and a public hearing on its tax rate on Thursday, Sept. 19, at 5:30 p.m.
It is scheduled to take a final vote on the budget and tax rate on Sept. 26.