Lakeway City Council scoured the proposed fiscal year 2020-21 budget at a special meeting Sept. 8, looking for cost savings to avoid a proposed maximum property tax rate that would increase revenue by 3.5%.
Under the proposed new rate of $0.1694, the city tax bill for the owner of a $500,000 home would increase from $822.50 to $847 per year.
At the Sept. 8 meeting, council directed City Manager Julie Oakley to reduce or reallocate two expenditures to help close the gap in the preliminary budget:
cut the committee contingency fund by $20,000 to $35,700
use the anticipated $135,000 revenue surplus in the current budget to help balance the budget instead of placing in the reserve fund
With those two changes, Mayor Sandy Cox calculated the proposed budget could be balanced with a tax rate of $0.1653 instead of $0.1694.
No pay increases are currently in the proposed budget, which is expected to save $180,000. Cox petitioned to reinstate staff pay raises, citing how other regional municipalities have raises in their proposed budgets. Cox also worried about “losing good people” to other local governments by not offering raises.
Council Member Steve Smith said the city needs to “hold off on raises for now and wait until we have the cash.” Council could consider a budget amendment for raises later in the fiscal year if revenue rebounds, he said.
“Customers are our voters, not our staff,” Smith said. “We have to take care of them as well.”
Although three full-time and two part-time vacant positions have been frozen, the proposed budget contains four new positions: a grant coordinator; a planner; a fleet management coordinator; and an emergency management coordinator, which would be a regional position funded by an interlocal agreement with The Hills and Bee Cave.
Council will hold public hearings on the proposed budget and proposed tax rate at 6:30 p.m. Sept. 21, with votes on the budget and tax rate scheduled for 6:30 p.m. Sept. 28.