As the budget season for the next fiscal year nears, Boerne city staff and officials are gearing up to begin the budget process with the many fiscal impacts of the past year in mind.
Boerne City Manager Ben Thatcher said the city’s goals in the budget process are to ensure strategic alignment, implement the city’s master plan, manage growth, ensure structural balance, optimize the city’s fund balance, look out past the current year, consider operational impacts and more.
“You know this is an interesting time in our annual process,” Thatcher said. “This is where the nitty gritty comes down to all our months of strategic planning, understanding citizen input, understanding master plan needs, what do we need to effect and implement.
“We have strong conversations with our staff about what is it we need to do timewise, and how do we allocate the resources that we have? So, this is why I get so excited because we’re doing the work of the city as a collaborative team with the city staff, with city council, based on the input from our community.”
Thatcher said managing the cost of inflation will be a big focus during this budget planning cycle, noting the cost of chlorine has gone up by 25 percent as an example, adding that just being able to purchase that product to maintain the public pool will have budgetary impacts.
Additionally, Thatcher said maintaining an “employer choice status” will be of utmost importance, saying the workforce nationwide is short about 400,000 employees which he said the city is feeling in its staffing through retention and onboarding. To combat this, he said there needs to be a focus on maintaining a strong culture and brand so “people can feel good about what they’re receiving in return for the work that they give.”
The strategic process shows city staff has already begun departmental business planning efforts, and Thatcher said staff has already submitted departmental budgets and worked to cull down numbers. However, he said the city remains in a bit of a “holding pattern” due to the large valuation increases from the appraisal districts across the state, saying staff is having to make some assumptions on what will happen.
While Boerne Finance Director Sarah Buckelew said there was a 38 percent increase in appraised values across the city, she said the city only saw an 18 percent increase in taxable value as there was also a 68 percent increase in property tax exemptions. She said if the tax rate remained the same, the average home – valued at $340,000 in 2022 and increased to $380,000 in 2023 – would see about a $190 increase in its annual bill.
This 68 percent increase in property tax exemptions is caused largely in part by an increase in homestead cap adjustments, said Buckelew, noting that while properties on average saw a 38 percent increase in value, that increase is capped at 10 percent if it qualifies as a residence homestead. To qualify as a residence homestead under this exemption, the property must be owned by an individual who uses the property as a principal residence, according to the state comptroller’s website.
Come August, the city will host public hearings on its Fiscal Year 2023 budget – which kicks off Oct. 1 and runs through Sept. 30 of next year – with the first public meeting to discuss the city’s future tax rate set for Aug. 9. A budget timeline presented shows the appraisal district’s tax rolls are set to be finalized by Aug. 1, and a budget draft is set to filed with the city secretary by Aug. 13, which is just three days before the city’s bond election is to be called.
City staff and officials have been eyeing a bond proposal for this November election to the tune of $36 million, which is down from its initial $50 million consideration. The bond discussions will likely tie into the budgeting planning process. The bond is expected to prioritize parks and road improvements, including development of Northside Community Park and the addition of a center turn lane to Adler Road.
While the bond reduction eliminated the funding for a second fire station, Thatcher said this budget process will include discussions about onboarding three new firefighters which may be funded through grant dollars.
The Boerne City Council is set to host public hearings on the budget and tax rate by Sept. 13.
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