PRESENTER: Presenter
Jared Werner, Assistant City Manager
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SUBJECT: Title
Public hearing on the proposed tax rate for the City of New Braunfels for tax year 2023 and announce the meeting date and time of adoption.
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DEPARTMENT: Finance
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COUNCIL DISTRICTS IMPACTED: N/A
BACKGROUND INFORMATION:
City Council held work sessions on the FY 2024 Budget and tax rates on August 7, 8,10, and 14.
In order for property owners in the State of Texas to be informed of any increases in their property values, truth-in-taxation requirements were embodied in the Texas Constitution and the Tax Code. Taxing units are required to calculate the No New Revenue tax rate and the Voter Approval tax rate after receiving the certified appraisal roll from the chief appraiser.
The No New Revenue tax rate is the total tax rate needed to raise the same amount of property tax revenue from the same properties in both the 2022 tax year and 2023 tax year. The Voter Approval tax rate (VAR) is the highest tax rate the City may adopt before a mandatory election is triggered.
The proposed tax rate of 40.89 cents is a 0.5 cent decrease from last year. The two components that make up the rate have been modified as well. The Interest & Sinking (I&S - debt service) portion of the rate totals 20.89 cents while the Operations & Maintenance (O&M - General Fund) portion of the rate totals 20.00 cents. The total rate of 40.89 cents is less than the Voter Approval tax rate as well. The O&M (General Fund) portion of the rate decreases from last year by 0.5 cents. The I&S Rate remains the same and will still provide sufficient revenue to support debt service payments for all existing and recently approved debt obligations to include the $35 million GO Bond - first issuance of the 2023 Bond Program, the $10 million Certificate of Obligation - funding for the Sports Complex (totally supported by the NBEDC), and the $2 million Tax Note - part of the rolling tax note program for vehicle replacements. Following is a summary of the tax rate calculations completed by the Comal County Tax Office.
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PROPOSED TAX RATE |
$0.408936 PER $100 |
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PRECEDING YEAR'S TAX RATE |
$0.413935 PER $100 |
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No New Revenue TAX RATE |
$0.376441 PER $100 |
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Voter Approval TAX RATE |
$0.418877 PER $100 |
State law requires that a public hearing be held by the governing body before adopting the final tax rate. These hearings will be held on September 7, 2023.
ISSUE:
N/A
FISCAL IMPACT:
The proposed ad valorem tax revenues generated by the proposed tax rate provide funding for the FY 2024 Budget in the General Fund and Debt Service Fund.
Recommendation
RECOMMENDATION:
Staff recommends City Council set the proposed tax rate with a record vote.