Financial Transparency

This budget will raise more revenue from property taxes than last year’s budget by an amount of $389,335, which is a 9.85% increase from last year’s budget. The property tax revenue to be raised from new property added to the tax roll this year is $87,076.

Total debt obligation for the City of Shavano Park secured by property taxes: $12,847,120.

Operating Budget Summary
The current budget allocates $6.2M for City operations from October 1, 2022 to September 30, 2023. All City operational, service and staff expenses are included in this number. The departmental breakdown of the $6.2M is below. As you can see, the operating budget of the City is roughly 1/3 Police, 1/3 Fire and 1/3 all other departments / transfers.

So what are some of the items your tax dollars purchased this year? Here are a few:

• Wages and benefits for 47 City employees (4 others are Water funded) with an average 6% pay raise for higher payroll employees and a 6.5% pay raise for lower payroll employees
• Fuel and maintenance to operate 32 City vehicles and trailers
• $325,000 transferred to Capital Replacement Fund for future capital purchases
• All costs associated with City-sponsored events

If this list seems light on equipment expenditures that is because the majority of the General Fund’s capital requirements are being purchased using American Rescue Plan Act (ARPA) funds from the Federal Government to compensate for lost revenues related to the COVID-19 Pandemic, and are recorded in a separate fund.

The first item listed above, wages and benefits is the lion’s share of the City budget. The heart of City operations and services is City staff.

For example, here is a breakdown of the Fire Department’s department funding. As you can see, 79% of the Police Department’s $2.1M funding is for the annual wages and benefits of our Fire Fighters and Paramedics.

Note that the majority of the Fire Department’s capital items are purchased from the Capital Replacement Fund. Money is transferred each year to the Capital Replacement Fund to plan for future big-ticket purchases like fire engines and ambulances (and avoid the need for public debt). This year $220,075 in the General Fund under the Fire Department is being transferred for future Fire Department capital purchases.

In the past five years City General fund expenditures have increased, from $5,167,251 in FY2019 to $6,212,240 in FY2023. This is a bit misleading though because $281,042 of ARPA funds are being used for Capital items that would normally be expended under the General Fund or Capital Replacement Fund.

This steady increase has enabled the City to remain competitive with respect to wages and benefits for City employees, and fully fund the City’s capital requirements each year.

The purpose of the Capital Replacement Fund is to spread out the burdensome costs of capital items over a number of budget cycles. This allows the City to maintain a balanced budget from year-to-year even when large capital expenditures are required or allows the purchase of required equipment in a down revenue year.

While not a part of Fiscal Year 2023 Budget, a recent big purchase demonstrates how the Capital Replacement Fund acts as a “piggy bank” to plan for big-ticket purchases without the need for public debt. In February 2019, the City’s capital fund was used to purchase a $1,165,000 ladder truck to replace the City’s aging 20-year old fire engine without the need to acquire public debt.

In Fiscal Year 2023, the Capital Replacement Fund proposes $269,000 in capital purchases, with an additional $281,042 in ARPA Funds for capital items. The City is utilizing ARPA funds to better position the City in the future with regards to capital replacement costs. Some capital purchases in the funds for Fiscal Year 2023 include: playground shade covers on the Municipal Tract ($57,000); emergency generator for Fire Department / Public Works buildings ($38,000); and City network improvements for file storage and email ($26,500).

Note that Police Department capital items, such as patrol cars, weapons and computers are usually funded in the Crime Control & Prevention District Fund (which is supported by a portion of sales tax revenues) and not by property taxes. This year $174,090 in this Fund is being spent for the replacement of two Patrol vehicles, video cloud storage services for patrol vehicles and body worn cameras, training, the National Night Out event and Neighborhood Watch supplies.

Property Taxes
City operations are largely funded by property taxes paid by City residents and businesses. For this budget year, 65.3% of the City’s General Fund revenues are from property tax collections. Other major revenue sources include sales tax, franchise fees and permits / licenses.

In FY 2023 the City property tax rate was increased for the first time in over a decade. The rate increase is a one cent increase from prior year’s tax rate to pay new debt costs associated with the voter-approved $10M Bond from the May 7, 2022 Bond Election to reconstruct City roads. Read more at https://www.shavanopark.org/streetbond

Texas Tax Code, Chapter 26, Section 26.18 – Property Tax Information:

Property tax revenues are divided into Maintenance & Operations (M&O) and Interest & Sinking (I&S) rates and used to fund annual operations and debt servicing respectively. Here are the City’s M&O and I&S rates and their revenues over the last three fiscal years.

The M&O tax rate for Fiscal Year 2022 – 2023 was slightly decreased ($0.00041) to pay new debt costs associated with the voter-approved $10M Bond from the May 7, 2022 Bond Election to reconstruct City roads.

The I&S tax rate for Fiscal Year 2022 – 2023 was slightly increased ($0.01041) to pay new debt costs associated with the voter-approved $10M Bond in May 7, 2022 Bond Election to reconstruct City roads.

Here is a detailed breakdown of the change in General Fund (which accounts for the entire M&O rate as well as other revenue sources) between FY 2022 and FY 2023:

If you are wondering why this rate seems low compared to your recent property tax bill, it is because City property taxes is only 13% of your total 2021 Tax Year tax bill. The largest portion of your property tax bill is assessed by Northside Independent School District at 53%.

For more information about Property Taxes in Texas visit the Texas Comptroller's Truth-In-Taxation page.