Next week could bring big budget news in Denton, if all the ducks line up the way City Manager Todd Hileman anticipates.
A cost-of-service study in the Development Services department is finished. Hileman estimates the department has been undercharging nearly $4 million annually — an amount that’s equal to about 3 to 4 cents of the city’s property tax rate. A new fee schedule for various building permits and inspections should take the burden off the general taxpayer.
Council members can revisit the proposed tax rate for fiscal year 2020 if they agree to the new fee schedule, Hileman said. The proposed rate of 60.545 cents per $100 valuation stands 1.5 cents higher than the effective rate.
The effective rate is a complicated calculation required by state law that boosts transparency with taxpayers: It is meant to show the rate the city would charge to collect the same amount of taxes on the same property from one year to the next.
“We’ll go back in and recalculate for you,” Hileman told council members during their work session Tuesday afternoon.
For the past two years, Hileman has proposed a budget based on the effective tax rate. But he didn’t do that this year. Instead, he unveiled this year’s $1.2 billion budget with a property tax rate higher than the effective rate knowing city leaders could probably reduce the tax rate after the development service discussion, he said.
Denton’s property tax roll jumped 11.5% this year, with more than two-thirds of that increase coming from an increase in values on existing properties. Last year, the average house value was $233,241. This year, the average value rose to $248,909.
The city manager did not propose an increase in rates for water, wastewater and garbage service. The City Council has delayed a decision on a possible increase in electric rates.
Either way the property tax discussion goes, Hileman expects the city can pay for major initiatives to address homelessness in the city, along with key public safety projects and a pay raise for most city employees.
Council member Deb Armintor asked about the status of her requests for the city to offer paid parental leave or pay workers no less than $15 an hour. Hileman said that both remain on a list of unfunded requests that did not have enough support from other council members to make the cut.
So far, council members have not demonstrated an appetite to give themselves a raise. The mayor receives a $1,000 monthly stipend and most council members receive $750. (Armintor declined hers since she is a state university employee.) But they did go along with a proposal from District 1 council member Gerard Hudspeth to increase council contingency funds to $1,700 next year.
A contingency fund is money each council member can use to direct to community nonprofits and events of their choosing.
The City Council holds its first public hearing on the property tax rate next Tuesday during its regular council meeting, which begins at 6:30 p.m. at City Hall.