Cleveland City Council OKs budget, tax rate decrease

Cleveland City Manager Bobby Pennington

Cleveland City Council on Sept. 14 approved the 2021-2022 fiscal year budget that provides a half-cent property tax decrease, dropping the rate to $0.7550 per $100 valuation. The rate includes $0.2521 for debt service and $0.5029 for maintenance and operation.

City Manager Bobby Pennington told Bluebonnet News that there were a couple of factors working in the City’s favor this year – new construction that has increased ad valorem taxes and a decrease in the previous year’s sales tax from the COVID-19 pandemic that allowed for an adjustment in the Truth-in-Taxation calculations.

“Basically we collected less sales tax in the prior year. That is factored into the tax assessor-collector’s Truth-in-Taxation. We believe those two factors brought us down below the effective rate, which is now considered the ‘no new tax revenue rate,'” Pennington said. “In my career, I have only seen this a few times where cities come in less than the effective rate. In the times it has occurred, the city was coming out of a recession and had a lot of new development.”

Pennington said the City’s goal is to lower the tax rate whenever possible to be competitive with other cities in the area.

“I think it’s important that we keep lowering it and reducing the burden on taxpayers,” he said.

Here’s a complete breakout of the major funds that make up the entire budget:

Budget for major funds are the following:

  • General Operations = $9,734,252 (use of $669,619 in reserved cash on non-recurring expenditures) Fund balance estimated for Sept. 30, 2022, remains strong at $4.5 million.
  • Debt Service = $1,221,133 (balanced)
  • Water and Sewer = $3,558,947 (balanced)
  • Water Sewer Capital Equipment = $205,200 (balanced)
  • Hotel Occupancy Tax Funds = $253,288 (balanced)
  • EDC = $768,425 (balanced)

Even with the tax rate decrease, the new budget provides all employees, including full-time and part-time, with a 5 percent cost-of-living increase, which should help offset anticipated inflation. Some director positions, such as the police chief and fire chief, will see a 10 percent increase in order to keep their salaries competitive. Cleveland police dispatchers also will receive a 10 percent pay increase.

With neighboring cities offering higher wages, Pennington believes it is important for the City of Cleveland to offer incentives for employees to stay.

“My objective for our labor positions is to keep them at above $15 an hour. We are still working on that,” Pennington said.

The general operations fund side of the budget comes in next year at $9.734 million. With $669,619 in reserve cash being used on non-recurring expenditures, along with municipal bond funds, the City plans to make major improvements to infrastructure all across the City, including a new 500,000-gallon water tower to serve the Tanglewood community on the northwest side of the city, a new fire station at Grand Oaks Reserve, a new police evidence building behind the existing police station, a new pavilion at Stancil Park, rehabilitation to the two existing water towers on Boothe Street and Glen Park, park and airport improvements, street resurfacing and electrical improvements to the municipal sports park. Additionally, the City and Cleveland EDC have been awarded a Texas Department of Agriculture grant to improve the central business district in Phase II of the Downtown Revitalization plan and make sidewalk improvements.

Municipal bond funds will also provide for the relocation of the Santa Fe Railroad depot, currently located on Manthey St., to a heritage park area that will be next to Cleveland Civic Center. Pennington explained that the City is getting some help in project design from Texas A&M graduate students.

“They are volunteering their time for this class project. Obviously, BRW (Brown Reynolds Watford Architects, Inc.) will do the design, but they wanted to see if the students had ideas they could incorporate. This project also ties into the pavilion project that we are doing across the street at Stancil Park. BRW already has the contract to do the pavilion where the old senior citizens center building is located. That old building will be torn down,” Pennington said.

The pavilion project is supported by Hotel Occupancy Tax funds, he added.

This budget year, the planned park improvements will be centered around Campbell Park where construction of a new water park is wrapping up. The City is looking to spend $100,000 to rehab Campbell Park.

“There has been discussion about making it a place where families can go and walk. That’s something we want to look at – to have a nice track facility. I am going to look to our parks committee for suggestions. We have a lot of work to do in the park itself,” Pennington said. “We are literally at the point where we are able to turn on the water at the splash park. I want to make sure the park is dressed up enough. I feel like we need to do some improvements to the park aesthetics, but I don’t want to delay the water park opening any longer than necessary. We will go ahead and open the splash pad and then work on rehabbing the restroom facilities.”

The City has also set aside $60,000 for park equipment for Campbell Park.

“The next fiscal year, we will concentrate on Old City Park or Wiley Park. We have done a few improvements to Wiley Park recently but now we are focusing on making major improvements to each of the parks,” he said.

Expenditures for the airport involve $56,000 for an apron/taxiway that will connect to new hangars that are being installed. The hangars were previously at a north Houston airport, which is now closed. The hangars were disassembled and relocated to Cleveland Municipal Airport.

“We are paying them back as we rent out the hangars. It will be a seven-year return on our investment,” Pennington said.

The City, with major support from the Texas Department of Transportation, also is making major upgrades to the airport runway lights.

“When this project kicked off nine months ago, we were looking at a $1 million project,” said Pennington, adding that the amount was grossly underestimated as the project will be closer to $2.5 million.

The City has to pay a 10 percent match – or roughly $250,000, which is considerably higher than originally anticipated. Pennington said he is working with the TxDOT’s Aviation Division to see if the project can be accomplished with a less than 10 percent match from the City.

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