City Manager Allen Bogard presented a $206.76 million proposed budget for fiscal year 2014 to City Council on July 23.
Sugar Land’s fiscal year 2014 begins Oct. 1, 2013, and ends Sept. 30, 2014. The budget includes all funds, a five-year financial plan and five-year capital improvements program.
“This budget proposed for fiscal year 2014 continues to deliver high quality service levels,” said Bogard. “It is structurally balanced and addresses the City Council priorities. The proposed budget leaves the current tax rate unchanged and ensures continued financial strength by meeting all financial policies.”
Sales tax has grown as projected for 2013. The fiscal year 2013 budget anticipated 3 percent growth in collections over the prior year. Development activity remains strong in the city, with commercial projects such as Costco, Telfair Exchange Lofts and Texas Instruments all beginning construction during the year.
The proposed budget has been prepared based on conservative revenue estimates for both sales and property taxes. Sales tax growth is projected at 2.7 percent and property tax at 7 percent, figures driven primarily by the significant growth in commercial valuations.
The growth in commercial valuation supports existing services offered by the City and allows for inclusion of City Council priorities in the FY14 proposed budget. These priorities include operating the surface water treatment plant, establishing high quality emergency medical service within the City, addressing drainage issues, continuing an emphasis on pavement rehabilitation and emphasizing economic development activities that attract high quality businesses and development.
Resources are included in the FY14 proposed budget to address drainage and pavement rehabilitation issues that have been identified by City Council as a priority.
The FY14 proposed budget contains the final step in surface water rate increases. To minimize the impact to utility customers, there are no increases for the water or wastewater portion of the utility bill. Residential solid waste rates were scheduled to increase 2.5 percent in January.
“The surface water fee increase is the last in a planned series of stepped increases that have been planned over a number of years, and the solid waste increase is based on contractual requirements,” said Bogard.
The proposed 2013 tax rate for the City is unchanged at 30.895 cents and remains one of the lowest rates in the state. The average residential tax bill will increase about 2 percent due to growth in values.
The five-year capital improvement program totals $267.6 million, with first year funding of $37.05 million included in the proposed fiscal year 2014 budget. Projects proposed as funded focus on the “needs” of the City to maintain existing infrastructure such as sidewalks, streets, drainage, water distribution and well rehabilitation and wastewater projects such as lift station and collection system rehabilitation.
The CIP includes planned funding for a performing arts center based on development agreements approved by City Council on July 23. Construction will be supported by economic development sales tax as approved by voters in 2008.
Projects included in a planned November general obligation bond election are not included in the proposed CIP and may be added pending the outcome of the election. A citizens’ bond committee recently recommended a $50 million bond election for four quality of life parks projects. The bond election will provide an opportunity for citizens to choose whether to invest in quality of life projects that will make Sugar Land an even more attractive destination for residents, business and visitors. The City’s current tax rate structure can support existing parks, streets, drainage and utilities; however, the tax rate does not have the capacity for new parks projects.
The FY14 proposed budget includes the addition of 14.5 full-time equivalent positions, with seven included for the operation of the surface water treatment plant, three for the implementation of EMS services, 1.5 for response to increased workload, two for environmental monitoring and one position to support the implementation of a tourism program.
The proposed budget also includes funding for an average 3 percent merit increase to employees based on annual performance evaluations.
The budget will be discussed in more detail with City Council during a series of budget workshops. The meetings are open to the public.