City planners are always cautious with the preliminary tax values released by county appraisers each spring.
There are typically many variables in play, Kilgore City Manager Josh Selleck says, and there's typically a swing when the final, certified values come in.
Caution, though, only goes so far: the preliminary one percent drop in values projected in April fell even further by the release of the certified values.
“This is probably one of the worst hits that I've seen,” Selleck said last week. “On the property tax side, that means that the values have dropped approximately six percent, which equates to about $310,000 of revenue that we'll be short again this year.”
Taking a 'snapshot' of property as of the first of the year, appraisers see the state of things at that point, Selleck noted: “That doesn't mean they have all that data at that point,” especially as the renditions commercial and industrial taxpayers have to provide can be delayed into April or May with appraisal reviews stretching even longer.
“Those preliminary values are difficult to depend on,” he said. “It frustrates them that they have to knowingly provide us information they know may not be reliable.”
Selleck is grateful for a courtesy call from the Gregg County Appraisal District. Chief Appraiser Libby Neely sent advance warning ahead of the release of the certified values to let City Hall know the numbers would be declining – “...some of the best customer service I've ever received from a CAD,” Selleck added – and local officials immediately set to finessing plans, including postponing a budget workshop planned for Tuesday night.
“The conversation this year is no different than the one we had last year,” Selleck said. As a policy, “We don't budget ongoing expenses from our reserves – that's what happened in the '80s, and it set the city back for decades; they drew down on their fund balance until they had nothing left, waiting for a recovery.”
The current philosophy calls for budgeting for sustainability.
“I thought our dialogue would be that we would pretty much be holding the line from last year and the only changes would be those changes that are necessary to ensure we're able to maintain quality services,” Selleck said. “It was going to be a relatively neutral budget up to this point.
“We've talked about doing a number of one-time projects to rehab more streets, rehab more facilities and make sure we're not behind on our maintenance.”
Some of those targets can still be funded out of reserves, he noted.
“This new issue on property tax means that we'll be looking for $300,000,” Selleck said, after base-level, lean budgets the past three years. “There was no fat to start with. We have very fiscally conservative council members.”
The first year, the city cut firefighter positions and reduced minimum staffing to eight per shift, he noted.
“At that point, we had looked at cutting a police officer position, but we really don't want to look at negatively impacting public safety,” Selleck continued. Looking ahead, “Are we going to make a major cut to some quality of life service? Are we going to look at how we do public safety and how we staff those departments? Are we going to continue forward and make the adjustments necessary as we do?”
Meanwhile, Selleck's concerned about losing trained, quality employees at City Hall if there's no adjustment in pay parity, maintaining at least minimal competitiveness on salaries compared to other municipalities and agencies in the area.
“I think there's a number of conversations we have.”