By Jan White
CROCKETT– The 2023 fiscal year budget was the central topic at the Crockett City Council meeting on Monday.
City Manager John Angerstein opened the meeting by explaining that after the last budget workshop meeting, it had been decided that the council’s number one priority was to hire and retain city employees. Angerstein said that the hurdle was to try and come up with a solution.
At the last meeting, Angerstein had presented what he referred to as a “balanced budget,” based on what is known as the “voter approval rate” tax, which meant that there were no additional funds to assign towards employees’ salaries.
Due to the size of the city, there is not a lot of flexibility to bring in additional revenue. City revenues are basically comprised of 30% sales tax, 35% utilities, and 30% property taxes. Utility rates and property taxes are the only taxes that the city has control over. At this point, without any additional revenue, there would be no room in 2023 to increase employee salaries and benefits.
Angerstein went on to explain that there is a caveat that allows cities the size of Crockett to enact what is known as a “De Minimus” tax rate. This would let the city increase tax rates to allow up to $500k of additional taxes without requiring a city election. Based on numbers using that allowance, the budget was reworked, and the increased income was included in the budget for salaries and personnel costs. During these budget calculations, Angerstein conducted a survey requesting wage amounts from 23 cities and received responses from about half. A competitive employee salary range was assigned using those responses. Additionally, the budget committee developed salary ‘step pay’ rates to ensure parity for all the city departments, which the city had not previously had.
Much time was spent explaining the need for salary increases and retention plans for the town’s essential employees. Councilman Ernest Jackson addressed the group. “I’m joining in with the City Administrator to sound the alarm that we’ve got to do something. I’m a property owner. I don’t want to raise taxes. But we all may be called upon to do a little bit more. It’s not ‘my city,’ it’s ‘our city,’ and there’s no magic wand when you start having financial woes that will provide the money that we need.”
Crockett Mayor Dr. Ianthia Fisher stated, “I’m like everybody else. I don’t really like taxes, but I sure like what they do. And we like all the amenities that come with it.” Mayor Pro-Tem Mike Marsh also chimed in, “By all means, I don’t like taxes, but we have to do this for our employees, and I know it [the tax increase] is not being wasted. It’s going to help us hire and retain our employees. We’ve got to do something.”
Discussion then moved on to address the 2% water rate increase requested by the Houston County Water District. Angerstein showed a table explaining the proposed increase and how it would affect users’ water bills. Previously the council had asked that a member of the water department attend a council meeting and explain the reasoning behind the increase. Concerns were expressed over the terms of the city’s contract with the Water District regarding the quality and amount of water delivered. Angerstein explained that the amount of water the city was to receive was an estimate tied into a revenue bond agreed upon by the city several years ago, which didn’t leave much wiggle room for negotiations.
Angerstein said he would continue with talks regarding the rate increase.
Angerstein then moved on to explain more about the proposed tax rate increase. He presented a graph showing where Crockett stands in relation to the taxes of the 23 cities in the general area that were previously mentioned in the salary survey. Mayor Fisher asked Angerstein, “What is the smallest amount that we could increase [taxes] that would cover our budget expectations?”
Angerstein replied that using an average homeowner property value of $62k, the current year’s tax rate is $0.564 per hundred dollars. “The average annual tax for a Crockett resident taxpayer is $351.83. That is City of Crockett tax only, not school, county, hospital, ESD, or any of the others.” Based on that same average home value of $62k, using the “De Minimus” tax rate, property owners would see an approximate tax increase of $86.89 annually. “As your property value increases, your tax bill is going to increase,” Angerstein clarified. Homeowners with values lower than the average would see less of an increase.
Although property taxes increased by about $23M this past year, due to the tax laws, to bring about the same revenue as last year, the tax would drop from $0.56 to $0.52. “That voter approval tax rate is not even enough to cover fuel costs increases or health insurance. We are looking at almost $200k in those two categories alone.” Angerstein emphasized that none of the requested tax increase will go to anything other than to cover the increase in employee salaries.
“At this time,” said Angerstein, “I am asking for council to consider and adopt a tax rate increase. This tax rate will be posted. We have public hearings posted for our next meeting on August 15. That’s where it will be approved and finalized. We will post the hearing times in the newspaper and in the media. This will give the citizens adequate time, and if they have concerns, if they are for it or against it, they have opportunities to come as a taxpayer to say “no, we don’t want that money to go towards it” or “we’re all for it.” It’s up to them and Council at the end of the day to finalize and adopt the increase.”
“I don’t like it at all,” stated Marsh, “but if I need law enforcement and I call, I want them to be there. If I need my fire department and I call, I want them to be there. If I’m out of water and I call, I want them to be there.” Marsh then made the motion to approve going forward with the “De Minimus” tax rate, seconded by Jackson. The motion passed unanimously.
Approval of the Crockett Economic & Industrial Development budget was tabled until the next meeting, but the approval of a change in the wording of the CEIDC by-laws caused sparks between some members of the Council and CEIDC Director James Gentry. The agenda item requested approval to delete the words “for the previous fiscal year,” from Section 7.03 pertaining to the “Audit” section of the current by-laws. Apparently, the wording would affect both the scope [fiscal years] of the forensic audit of the CEIDC recommended by the Council, and also which entity might be required to pay for that audit.
Gentry argued that it was not the CEIDC who requested the audit, it was done by the City, so the burden of expense should not come from the CEIDC but the city. Fisher responded that the Council made the decision to do a forensic audit based on the Council’s perception of what their constituents wanted. Councilman Jones questioned why the wording of the by-laws had to be changed by the Council when all the other by-laws were changed by the CEIDC. Angerstein replied that the Economic Development Board could not change its own by-laws. “They cannot amend them, they cannot delete them, they cannot change them. They can make a recommendation to Council for amendments.” The
Council approved the motion to remove the wording.
Two additional agenda items were the approval of the City of Crockett to accept a generator and the security system and any other assets turned over to the City by Onshore Technology Services, Inc., in lieu of seeking litigation over the breach of contract by Onshore.
After a brief adjournment into Executive Session, the Council reconvened to vote on approving the purchase of property to be used as an animal shelter. The motion was made to allow $275k and an additional $4k from the American Rescue Plan Act Funds for the purchase. It was emphasized that none of the funding would come from taxes. The motion passed unanimously.