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Posted Oct 13, 2005, 9:30 p.m. San Marcos budgeters foresee |
SAN MARCOS - San Marcos officials are bullish on the economy.
So bullish, in fact that the city's Fiscal Year 2005-06 general operating budget actually is designed to balance with a lower property tax levy, predicting a significant sales tax increase.
However, the city's overall fund balance will take a $3 million hit as San Marcos spends on long-awaited infrastructure improvements. But the city has money in the bank for those expenditures, which come from the enterprise budget, rather than the general operating budget. Cities generally budget their water and wastewater systems separately as enterprises, since those services are paid for directly by consumers.
The city council approved a property tax rate of 47.02 cents per $100 of assessed valuation last month, down from the 47.10 rate approved last year. San Marcos City Manager Dan O'Leary said the tax rate decrease is the first for the city's property owners since 1998.
With the rate decrease, the city will collect only $3.378 million in ad valoren taxes for the next fiscal year, down from $3.636 million collected for the fiscal year that ended on Sept. 30. But the city expects to balance its $29.817 million budget for general operations on improved sales taxes, which blasted past last year's projections.
The city expects to reap $13.932 million in sales taxes this year, up from $13.526 million last year. The city is especially comfortable with its prediction in light of last year's sales tax performance. The city expected only $12.472 million in sales taxes last year and ended up collecting in excess of $1 million more.
When all the smoke clears, the city expects to come through the year with an extra $718,000 in its fund balance due to revenues of $30.535 million.
On the enterprise side, however, the city will dip into its reserves. The city will outspend its revenues by $647,000 for water and wastewater improvements, nearly $900,000 for drainage and about $1.4 million for electric utility improvements. But those reserve funds still will contain $18 million between them at the end of the year.
All funds included, the city will spend $101.9 million this year, against $99.6 million in revenues.
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