Mayor’s Corner
This Mayor’s Corner follows up last week’s discussion about the City’s current finances, the budget, and how 2019 will be a challenging year. This week I would like to go deeper into the services the City provides and how they are financed.
City Provided Services: Many of the City services are administrative - such as creating ordinances, regulating planning and zoning activities, and permitting and inspecting construction. It also operates the Community Center, Blue Hole Park and a few small parks, and the downtown restrooms. The City is responsible for maintaining City streets (not state roads such as RR12 or FM3237). For public safety and enforcing City ordinances, the City has an effective arrangement with the Hays County Constable’s Office whereby it pays for access to its constables. The Hays County Sheriff provides protection as well. The only City-provided utility service is wastewater – within limitations. Currently it only serves Deer Creek and Blue Hole Park, but with the new sewer project will extend service to Central Wimberley (including the Square) to a total of about 100 customers. However, the City owns the CCN south of the RR12 Bridge to the Junction, down Flite Acres Road, and other areas – thus at some point will have the financial obligation to provide wastewater service to those areas also. North Wimberley is served by Aqua for its wastewater.
Services Not Provided: There are other services the City does not provide, contrary to some common misperceptions. First is water – Wimberley Water Supply Corporation is a non-profit corporation unrelated to the City that has served Wimberley well for many years and is led by an independent board of directors. It is self-funded by its customers. Second is fire protection and emergency services, which are funded by a combination of property taxes, contributions and user fees. The third is the Wimberley Library, which is primarily funded from general sales taxes.
City Funding Sources: The City operates on a small budget. General Fund annual revenues are just over $1.3 million and the City endeavors to operate within those limits. Blue Hole fund revenues are $0.4 million, and is successful in its goal to be self-funded with its gate and other revenues. As a frame of reference, the average annual sales for a Dollar General Store is $1.6 million. The City’s finances are much closer to a Dollar General than a Wal-Mart. The City relies primary on sales tax revenues. Of the 8.25% total tax rate, 6.25% goes to the State, 0.5% goes to the County, and 0.5% goes to the Wimberley Library – leaving just 1% for the City. Therefore, the City is capped for its sales tax rate – and only generates $0.9 million from this source. Another $0.3 million is generated from franchise fees from utilities for using City rights of way (i.e. from Wimberley Water and PEC). The remaining $0.2 million are fees for services
(i.e. permits and Community Center rentals).
City Spending: As described last week, most of the City’s spending is administrative, with little discretionary funds available. Since roads fall under the discretionary category, this is an area that has suffered most over the years - and the City is getting further behind in this obligation. Next year as the new City sewer comes on line, additional supplemental funds will be required – further straining our City finances.
What About City Property Taxes? Although it is typical for Texas cities to have property taxes, so far the “Wimberley Way” has been to manage without them. Trust me, I am no advocate of new or increased taxes. As I stated in my platform when I ran for office and this is what I still believe - we should do the best we can to manage within our existing resources. Nonetheless, we should factually understand the topic. The average City property tax rate in Texas is 0.57% - so a $200,000 property would pay an additional $1,140 in annual taxes. But this is just an average. What is interesting to note is that the cities with the highest tax rates are not the Austin’s or San Antonio’s – they are the small towns who have apparently gotten themselves in a financial bind for some reason. Ever hear of Darrouzett, Hawk Cove, or Spur Texas? They have the highest city property tax rates in Texas – by almost a factor of three times. Hopefully we can defer the topic of property taxes to a distant future discussion.
The Bottom Line: In the above narrative I have tried to just tell it like it is. Since its incorporation, Wimberley is fortunate to have effectively managed its finances to provide basic needed services, with perhaps roads being the shortfall. We have operated with limited funds – so thanks to all who contributed to the effort – Council members, boards, commissions, committees, volunteers and City staff. Our financial mission will be to continue to best manage the City’s finances for the public good and betterment of Wimberley. But we all need to remember “there is no such thing as a free lunch”.