This article originally appeared in the Friday July 19, 2019 issue of the Progress Times.
In order to raise the general fund and budget outlook in general, Mission is contemplating changes to the 2019-2020 preliminary budget and the city’s insurance plan for employees.
This Mon. July 15, the city of Mission held a workshop to discuss the potential insurance plans and preliminary budget for the next fiscal year.
City Manager Randy Perez presented the preliminary budget, which is not finalized and only was in discussion during the workshop because not all the information was available to the city at the time of the workshop. When looking at the preliminary totals in Mission, property taxes have had an increase of almost 6 percent.
“The net taxable is $4.4 billion,” Perez said. “One of the things I wanted to point out here, and this is why it’s a preliminary budget presentation workshop is because one, we don’t have certified values and two, they have not provided us with the TIRZ [Texas Increment Reinvestment Zone] values, which is a big portion of our evaluation as well.”
The presentation also included a tax analysis of the city over 10 years. When taking the tax rates into account for the 2019-2020 preliminary budget, the city estimated what it would look like with an adopted tax rate of $0.5262, four cents higher than last year’s tax rate ($0.4862), which had been frozen by the council and Mayor Armando O’caña when he took over the position.
Perez said that in terms of sales tax collections, Mission had a good year.
“Overall we’re estimating that so far right now, we’re at about 10 percent,” Perez said. “So we’re anticipating a 12 percent sales tax increase from last year to this year, which is very good because we need that additional revenue.”
The preliminary budget presentation included an estimated fund balance analysis of all funds for the 2019-2020 budget. The estimated beginning general fund balance (starting Oct. 1, 2019) would be $1,313,025 and the estimated ending general fund balance (ending Sept. 30, 2020) would be $890,214 if the property tax rate remains the same.
Before final numbers can be presented, the city has to wait until the county gives Mission their valuations at the end of the month.
“We don’t foresee that we’re able to continue the current tax rate,” Perez said. “We did our calculations based on a four cent increase based on what we currently have.”
Perez included a property tax analysis comparing Mission’s tax rate from 2009 to 2019, which showed that in 2009, the city’s tax rate was at $0.5566 per dollar before lowering a few cents every year until the current tax rate of $0.4862 per dollar.
“Every year when we would decrease the tax rate, it would decrease the maintenance and operations only and increase the I&S [Interest and Sinking] rate,” Perez said. “Over the years, we’ve absorbed all these through our reserves and through our operating funds to be able to cover the additional debt on these issues.”
Perez said that they prepared the preliminary budget with a four cent increase for now, before they get certified values from the county. With that increase, the property tax revenue for the city of Mission will increase from 1 percent to 15 percent in one year.
“It’s substantial in the sense where that is needed,” Perez said. “The total revenues would go from $35,502,374 to $38,030,800.”
Perez also said that with this change, the expenditures in Mission are predicted to go from $43 million to $44 million.
“Overall, it’s a reduction from the previous year of 2018, an increase in revenue but a decrease in appropriation,” Perez said, adding that the council should consider that 77 percent of the general fund budget is allocated toward employee salary and benefits. “So we have 23 percent that we can work with as far as each department,” Perez said. “There’s really not much room that we currently have, so we’re looking at how we can increase revenue.”