Nixon proposes tax rate of 31.76 cents at special meeting

At a special called meeting Monday, Aug. 5, the Nixon City Council proposed a no-new-revenue 2024 tax rate of 31.76 cents per $100 valuation — 1.24 cents lower than last year’s tax rate of 33 cents.

Council members also expressed their support for a proposed budget filed by Interim City Manager Darryl Becker that calls for total income of $4,460,250 against total expenditures of $4,170,719.29 for an estimated budget surplus of $289,530.71 while still meeting the needs of the city.

Becker said the new rate is based on an adjusted taxable value of $159,164,930 — an increase of $8,733,050 in taxable value — while still taking into account frozen tax levy on the homesteads of the elderly (age 65 and older) and the disabled. It is expected to generate about $505,508 in tax levy for the upcoming fiscal year.

Of that taxable value, some $117,539,210 is located in Gonzales County, while $41,625,720 is located in neighboring Wilson County. The city has new improvement value of $2,897,040 added to the tax rolls for this year.

The city’s debt rate for 2024 will be 2.86 cents per $100 valuation while the maintenance and operations rate will be 28.9 cents

Becker said raising the tax rate to the voter approval rate of 36.05 cents — the calculated maximum rate allowed by law without voter approval — would only generate an additional $68,282 in tax revenues, prompting him to suggest only adopting the no-new-revenue tax rate.

“So, sir, what you’re telling me is you’re lowering the taxes?” Mayor Ellie Dominguez said. “Very good.”

In discussing the proposed budget, Becker said he is “not requesting any amount of raises for any of the fees” for water, but is seeking an increase in commercial sewer rates from $2.15 per 1,000 gallons to $2.37 per 1,000 galllons.

“We're not seeing any essential need to raise water rates — residential, commercial, industrial, institutional,” Becker said. “One of the other things is we’ve had a 7.5 percent increase on our vendor as far as the trash pickup residential, so it’s going to go from $23.35 to $25.10.”

Becker said he is proposing that those residents age 65 and older or who are disabled get a break on their trash pickup rates and he is asking that the council lower the cost of a second residential trash container from $13.69 to $9.43 per month.

The interim city manager said the new budget proposes a 50-cent per hour raise for all municipal employees. Along with a 30-cent increase in retirement and an increase in medical contributions, that would bring the total benefit package increase for employees this year to $1.25 per hour.

Becker said all expenses and needs were taken into account, not just a desire to help employees see a raise in their paychecks.

“To understand the way that the economics works is that, as a city, whenever we deal with the fees, whether it be the water or the sewer, we always have to keep in mind the repairs,” Becker said. “We can't operate at cost. I'm sorry, that's just the way it is. We have an aerator that costs $60,000 we have to put it the sewer plant and we had a $12,000 pump go out at our lift station. We have repairs that must be done and we don’t have the ‘Golden City on the Hill’ that can just hand this money out. That's why you see a slim budget this year.”

Finance director Melissa Pompa said the budget is based not on collecting 100 percent of all property taxes, but on a collection rate of 95 percent, in order to be conservative.

State law does allow a city to adopt a de minimis tax rate of 66.03 cents per $100 valuation. The de minimis rate is designed to give cities with a population of less than 30,000 some flexibility to budget for extraordinary costs that may not be possible under the normal voter-approval tax rate calculation.

If Nixon were to consider the de minimis rate, it would generate total tax revenue of $1,050,966, which includes an additional $545,458 above the no-new-revenue rate.

“I choose not to do that,” Becker said. “I think I can do this. You know, I could be wrong with my inexperience. I've been here six months, but I think if we address the problems head on, I think we can be in a lot better shape next year.”