CORINTH — City leaders may be able to avoid an anticipated tax increase for 2012, even though almost no growth is expected in city property and sales tax revenue for the next fiscal year.
Should the City Council opt to reallocate one capital improvement project — a new 1.5 million gallon, ground storage water tank — about $163,000 in bond interest could be transferred to general debt service.
With that transfer, the council could avoid a half-cent to 1-cent increase on the interest-and-sinking side of the city’s property tax rate next year, according to Lee Ann Bunselmeyer, finance director.
“We are allowed to use interest earned on bond funds to pay back those bonds,” Bunselmeyer said.
The savings could also be enough to avoid anticipated increases in 2014 and 2015, she said.
Currently, Corinth residents pay 59.135 cents per $100 valuation in city property taxes, meaning the owner of $150,000 home would pay about $887 in city taxes each year.
To the city, each penny on the property tax rate represents about $138,000 to the general fund.
The city saw about $32 million in new properties built last year, but declining home values will likely erase any gains to the city’s property tax base, Bunselmeyer said.
The city staff briefed the council during a workshop session Thursday on key budget issues the city will face for 2012-13 and beyond.
Currently, the staff is looking to close a gap of about $262,000 in the general fund next year. Bunselmeyer said that gap would shrink if the city can negotiate down a 20 percent increase in health insurance costs, or if tax revenues see even a small gain.
Should the gap be closed, the staff proposed the council consider a step increase for public safety employees, who have not seen a step increase since 2008-09.
A step increase, which would move each police and fire employee’s base pay up by a set increment, would cost the city $128,259 next year, Bunselmeyer said.
All employees, however, received a cost-of-living pay increase in 2010-11.
The proposed budget includes bringing back an emergency services coordinator, a job that was eliminated to save money for the fire department but has become a talking point in contract negotiations with surrounding cities.
Hickory Creek, Lake Dallas and Shady Shores contract with Corinth for fire protection.
The ground storage tank is the only capital improvement project proposed for next year, said Justin Brown, director of public works. Plans for repaving Quail Run are already under way and vehicle replacement funds will be used to purchase new vehicles, including three police patrol cars.
The council also agreed Thursday to consider whether to use some of this year’s fund balance for improvements to Corinth Community Park. Council members are expected to deliberate at the next regular meeting whether to authorize $35,000 from reserves to build two practice fields on the southwest side of the park — a project Brown said city crews could construct.
The council will have another workshop session on the budget July 31 following a public hearing on the 2012-13 budget for the crime control and prevention district July 19.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is email@example.com.