City of Bevil Oaks Texas
From reading Facebook and hearing citizen comments, there seems to be some confusion regarding property taxes and the bond to pay the cost of the sewer project. Please understand these are two separate issues. The bond was taken out for the sole purpose of replacing the sewer plant and funds were used for no other purpose. Funds collected to repay the bond will be dedicated to repayment of the bond and no other purpose.
Property taxes are assessed annually and are used solely for operating expenses of the City of Bevil Oaks and are kept separate from Water and Sewer funds and are not used to pay for Water and Sewer Expenses. There are two separate bookkeeping systems that are audited separately for each division of the City.
Every year the City furnishes the County Tax Assessor-Collector with information necessary for the tax assessor/collector to calculate tax rates that the City can choose for the next fiscal year for property taxes. These rates are based upon current maintenance and operating expenses of the city as well as the taxable property values minus exemptions that the city allows. Early on, the City chose the
"effective tax rate" which allows strictly a "break even" situation and does not leave any room whatsoever for cost of living increases, etc. When it became apparent that this could not continue, at the advice of our CPA, Council began adopting the "maximum operating rate" which is the maximum rate allowed without going to a Rollback Election. This method has provided the city with a small increase in revenue each year to cover cost of living increases without major tax hikes on property within the city.
Last year's tax rate was 0.235316/$100 of taxable value based upon $52,157,524 tax base. This should bring in $122,653.60 in tax revenue but, as of July 31, 2016 the city had only collected $116,064.99. The County projection is that only 97% is ever collected meaning that we can only expect to receive another $2900 by September 30, 2016 which leaves our budget short by approx. $2450 in tax revenues.
At its August 25, 2016 meeting, Council approved this year's "maximum operating rate" of 0.238272/$100 that is based on a $55,115,043 tax base. This would result in $131,323.7 of tax revenue at 100% collection rate or $8,670.10 more than last year. But, in actuality, at 97% collection rate, the City can only hope to receive $127,384.
Here is an example of how this small increase will affect your taxes assuming that your appraised value stays the same as last year. The difference between last year’s tax rate and the approved "maximum operating rate" for this year is 0.238272 - 0.235316 = 0.002956/$100 of valuation. (1.25% increase) If you have a property that is appraised at $100,000, then the increase in your tax bill for the Bevil Oaks tax will be: $100,000/100 X .002956=$2.956. If you have a property that is appraised at $150,000, the calculation is: $150,000/100 X .002956=$4.43.
So, based on the 97% collection rate the County has suggested, with the approved tax increase to the "maximum operating rate", the City can only expect to collect a little over $8,000 additional revenue for 2016.
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