Latest Denton budget includes new rate hikes for utility customers
Denton’s double-digit growth in property values means the property tax rate won’t increase this year, but that may not translate into more money in people’s wallets.
Denton’s latest budget includes another round of rate increases for utility customers. And if property owners saw an increase in the value of a home or business — and many have, simply from the rebounding real estate market — their property tax bills will be a little higher, too.
The Denton City Council took its first in-depth look at the 2014-15 budget during a five-hour work session Thursday. The city’s $900 million budget covers both capital expenditures and departmental spending. The city expects to carry a $24 million fund balance with this year’s budget.
The staff proposed rate increases for all of the city’s utility services, which is expected to tack another $11.59 onto the average residential bill. Last year, rate increases added about $6.78 to the average bill.
The base electricity rate is expected to increase for several years as Denton Municipal Electric pays its portion of debt owed by the Texas Municipal Power Agency. The agency must retire about $150 million annually until it pays off financing for the coal power plant in Bryan.
The water bill is affected in part by damage done to the city’s water system in Ray Roberts Lake, which has become infested with zebra mussels. Assistant City Manager Howard Martin said the department expects to spend about $3 million to address the problem.
If residents with large trash carts change to standard-size carts, they can save money on their trash bill, city staff said. Monthly bills for households with large carts will increase $1.10. But bills for those with standard carts will increase 75 cents.
In order to encourage recycling, the department doesn’t charge for larger recycling carts, only larger trash carts, according to Vance Kemler, the city’s solid waste director.
The city continues to make street repairs a major priority. The unexpected growth in the final certified tax rolls — the staff planned for 8 percent and the city saw about 11.5 percent growth — gave the city some room to pay for other items, including more street work. In all, the city budgeted about $10.2 million for street work out of its annual operating budget. As much as $6 million more could be spent from bond funds in 2014-15.
After the formal presentation was complete, Kevin Roden asked fellow council members and city staff whether any consideration had been given to the cost of defending a possible ban on hydraulic fracturing. The proposition goes before voters in November.
City Attorney Anita Burgess told the council that staff researched the issue and believed the city could tap its risk bonds, should the Texas Oil and Gas Association or other industry group sue over the ordinance. The city has about $4 million available in its risk bonds, which the city attorney called a substantial resource.
Mayor Chris Watts challenged the council to take a second look at all the supplemental spending packages to make sure the city was making the best choices it could, particularly for economic development and sustainable growth.
He also suggested that the on-again, off-again council contingency funds be eliminated. Council members tap the allocation, which is about $20,000 shared between them, for projects of their individual choosing. The controversial funds were eliminated during Watts’ earlier tenure as a council member, then reinstated a few years later.
The council’s agenda will include the budget as a regular discussion item between now and its final adoption, which is expected Sept. 16.
The City Council will have two public hearings on the budget and tax rate, one on Aug. 4 and another on Sept. 9.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881 and via Twitter at @phwolfeDRC.
UTILITY BILL INCREASE
Denton has proposed rate increases for its utility customers next year. Here’s how the monthly utility bills would increase for the average customer:
* Assumes standard-size trash cart
SOURCE: City of Denton