The Lakeway City Council began budget discussions for the 2024-25 fiscal year at a meeting on August 5.

In addition to presentations from various city departments calling for budget increases, the workshop also addressed the possibility of a tax increase and plans to use major savings for future capital improvement projects.

The overview

The budget worksheet contains a proposed tax rate of $0.1625 per $100 of valuation, while the tax rate for FY 23-24 was $0.1440 per $100 of valuation.

This new tax rate would generate approximately $644,000 in additional revenue for the city, the document says.

City Manager Joseph Molis said if the city instead adopted the no new revenue rate option, the council would have to cut $1.1 million from the operating budget, as it does today.

The proposed rate of $0.1625 is just below the tax rate approved by voters for 2022 and therefore would not require an election, Molis said.

Detailed information on how tax rates are calculated can be found in the presentation.

The method

At the meeting, Molis said the city is seeking to transition from using bonds to finance large capital projects to creating a multi-year capital improvement plan.

The plan could include public facilities as well as road and pedestrian projects and would be financed from capital reserves.

According to Molis, in order to provide the reserves with more funds each year, the tax rate could be increased, but the consequences of such a measure would still have to be discussed in the Council.

In addition to planning future projects, inflation and increases in the cost of living are the most important aspects that the council must take into account in its assessment, Molis said.

What’s next?

The Council will meet again on 19 August to discuss the proposed budget and the CIP in more detail.

A final review will take place at a meeting on 3 September and the budget regulation will be adopted on 16 September.

The fiscal year 24-25 runs from October 1 to September 30.