MIDLOTHIAN – The Midlothian City Council passed a record 7 – 0 vote Tuesday to adopt the city’s upcoming Fiscal Year 2024/2025 tax rate and operating budget.
City Councilmember Place 1 Allen Moorman made the motion to pass the new tax rate, with Place 3 Anna Hammonds seconding for the “property tax rate be increased by the adoption of a tax rate of 0.650000, which is effectively 13.72% increase in the tax rate and approve the adopting ordinance.”
The specific ordinance for the item read “levying and assessing municipal ad valorem taxes for the City of Midlothian, for the fiscal year 2024/2025, at $0.343882 for Maintenance and Operations and $0.306118 for Interest and Sinking Funds, for a total of $0.650000, specifically for the purpose for which said taxes may be expended and directing the assessment and collection thereof.”
New to the council this budget season, councilmember Place 5 Ross Weaver asked various questions and mentioned the addition of exemptions, trying to understand how state law applied and how the numbers were applied in the budget.
Weaver wanted to know how “new property” in the city is defined and if it is the same each year.
Ann Honza, CPA and Midlothian’s Finance Director, defined new property as “new items that have come on the tax roll.”
She also said, “I wouldn’t say we are collecting less, but that is the way the calculations works.”
Weaver then asked, “If the $2.3 million revenue for this cycle is allocated to new properties that did not exist the prior tax year, and we are saying that the current cycle revenue we are collecting is $2.1 million higher, you would expect it to be higher than $2.3 million higher,” also asked does that $2.3 million comes from new property?
Midlothian City Manager Chris Dick explained that the calculations are mixing all the calculations, but some aren’t in the mix. “I know what you are saying,” he said. “It is odd to say you have more new value than you are collecting overall, so your assumptions would be correct. The existing properties are paying $200,000 less on its face.”
Before the vote on this item, Midlothian Mayor Justin Coffman thanked the council and said to the community, “If you have questions on your tax rate or the budget, go to the source. Go to the people who have the answers. If you are going to Facebook to find your answers you are flawed. Go to the source and get real answers to solve real problems to get real feedback.”
A public hearing was also held before the tax rate vote, and no one spoke.
Honza told the council, “We have calculated the no new revenue tax rate and the voter-approved tax rates. Every year I like to give a quick description of that for the public. The no new revenue tax rate is the one that enables the public to evaluate the relationship between the taxes for the prior year and the current year, so it is based on a tax rate that would choose the same amount of taxes if applied to the same property tax for the prior year. The voter approval rate is the maximum rate allowed by law without having to go out for an election. So, that calculation splits the voter approval rate into two components. There is no new revenue for maintenance and operation and debt service, and again, the debt service is not affected by the voter rate. It is what covers our debt service for the next fiscal year.”
The next item, an ordinance, by record vote passed unanimously adopting the Fiscal Year 2024/2025 Annual Operating Budget and plan for municipal services for the fiscal year beginning October 1, 2024, and ending September 30, 2025, also appropriating money to a Sinking Fund to pay interest and principal on the City’s indebtedness.
Honza went through the expenditures for appropriated funds:
General Fund – $59,701,528
Utility Fund – $42,705,658
MidTowne PID – $122,693
Ellis County Radio Fund- $851,747
Sr. Citizen’s Center – $548,211
Type A (MED) – $6,123,856
Type B (MCDC) – $6,134,039
Conference Center – $665,119
Midlothian Development Authority (MDA) – $80,464,093
Councilmember Place 2 Mike Rodgers wanted to confirm regarding the tax rate increase and the budget that within the appropriation tax dollars the 20% homestead is figured within these funds, which Honza confirmed. She also confirmed the new cap raised from $70,000 to $150,000 for the retired and the medical and military was in the budget.
Rodgers said “If you own your home as a homestead this year” it is about an 18% reduction in taxes.
Honza confirmed that is a rough estimate as it is different for every individual.
Rodgers commented, “Our tax deductions have increased from $29 million across the board two years ago to over $770 million in deductions at this point.”
Weaver wanted confirmation that the budget “will raise total property taxes by $2.1 million,” but he said when he looks at the general fund revenue detail on the ad valorem line it shows on the adopted 2023/2024 a different projected and proposed amount. He said he came up with a different amount so he was confused.
Dick stepped in and explained, “The stipulated requirements are at a 100% collection rate, and we usually use a 99.5% collection rate in our general fund.”
Weaver questioned using the 99.5% last year and 99.5% this year, but Dick added, “The state stipulation will not let you change, and they make you calculate it at 100%.
A public hearing for the item was held with no one speaking.
Honza pointed out work on the budget began for her in April, workshops began in July and public hearings in August on the proposed Fiscal Year 2024-2025 Annual Operating Budgets for Midlothian.
She also explained the impact of the ad valorem tax rate at .65, is consistent with the overall tax rate they had for the previous year. She pointed out the M & O is .3438882 per $100 valuation and the I & S is .306118 for $100 valuation that will generate $24,281,295 at an estimated 100% calculation rate for the M & O and another $21,614,802 for the I & S or debt service and that also includes the money to be transferred.
Also, as pertaining to the budget, motions were made after the appropriate executive sessions that the City will offer City Manager Dick an amended employment agreement with a 2% increase in salary effective October 1, 2024.
The City Secretary will receive a 4% increase on her base pay effective October 1, 2024, and the presiding Municipal Court Judge agreement will allow for a 4% increase in compensation effective October 1, 2024.
These three votes passed 7 – 0.
Item 2024-345
Other regular agenda items included item 2024-345 to ratify a property tax revenue increase as reflected in the FY 2024-2025 Annual Operating Budget when compared to the FY 2023-2024 Annual Operating Budget. This budget will raise more total property taxes than last year’s budget by $2,095,926 which is a 4.79% increase from last year’s budget and, of that amount, $2,307,805 is tax revenue to be raised from new property added to the tax roll this year. This item passed 7 – 0.
Item 2024-346 passed 7 – 0 authorizing the City Manager to enter into an agreement with Red River Construction Company for Phase 1 of the East Lift Station System Expansion Project – Lift Station Construction in a base bid amount of $6,605,912, plus 5% contingency in the amount of $330,000, for a total cost of $6,935,912.
Item 2024-347 passed 7 – 0 for two, five-year agreements with UBEO Business Services for the rental, upgrade, maintenance, and supplies for a total of 35 Ricoh Multifunction Devices and two HP DesignJet plotters, and item 2024-348 also passed unanimously for an agreement with Graphtec, Inc. for signage and wayfinding for the new Public Safety facility in a base bid amount of $247,208 plus a 10% contingency of $24,721 for a total amount not to exceed of $271,929.
The City Manager was authorized to enter into an agreement with Workplace Solutions, Inc. for Furniture, Fixtures and Equipment in the amount of $1,709,785.75 for the new Public Safety Facility on item 2024-349.
A third public hearing 2024-340 passed 6 -1 for an ordinance amending regulations of a Planned Development-127 to be replaced with a new site plan exhibit at a property located south of Walnut Lane, between South Walnut Grove Road and Eastgate Road.
The planned development amendment the applicant requested had only one change: to replace the current site plan, which denotes garage orientation for specific lots totaling 65% front entry.
All consent agenda items passed unanimously, including the minutes from the City Council meeting of August 27, 2024, the minutes from the Mid-Way Regional Airport Joint Airport Board meetings of September 14, 2023, February 8, March 14, April 11, May 9, and June 13, 2024, a resolution approving the negotiated rate settlement with Atmos resolving the 2024 Rate Review Mechanism (“RRM”) filing, and implementing the change, a resolution amending the Master Fee Schedule effective October 1, 2024, to adjust the rates for residential waste disposal, a resolution authorizing the Jingle Belles 5K and Rubies Fun Run hosted by the Heritage Belles Booster Club on December 7, 2024, and a resolution between Midlothian and the City of Waxahachie for an agreement with the Texas Department of Transportation for grant funds for the Routine Airport Maintenance Program.
