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Photo: Kelvin Knauf, acting city manager for Orange, explains the MadVac mobile vacuum machine during an Aug. 8 city council budget workshop. Knauf proposed the city purchase one for $65,000, including trailer, plus add $75,000 for an operator. RECORD PHOTO: Dave Rogers

Dave Rogers

For The Record

Kelvin Knauf, acting city manager for the City of Orange, led council members through a pair of detail-packed budget workshops Wednesday Aug. 7 and Thursday Aug. 8.

They centered on a proposed 2020 budget of $44 million, including general fund, water and sewer fund, general debt and special revenue funds, that was based on a proposed tax rate of 80.69 cents per $100 of property value.

That’s just 18-hundredths of a penny over last year’s rate of 80.51 cents per $100.

Knauf’s proposed budget includes about $2.5 million of increased revenues over the 2019 budget, with only a little over $500,000 coming from property taxes. Total proposed ad valorem (property) taxes are $7.5 million, with payments in lieu of taxes for industry at $9.6 million.

The value of city properties have gone up 6.7% since last year.

Major projects for the General Fund include:

• $369,478 for drainage improvements

• $200,000 for the demolition of the old Cove School

• $650,000 to replace the Lions Den Park playscape

• $100,000 for improvements at Northway Park

• $52,400 for improvements at Memorial Park

• 25,000 for decorative street lights in Old Orange historic district

Additionally, the General Fund include funds (including salary and benefits) for new positions:

• $81,825 for grants accountant

• $92,561 for information technology technician

• $78,060 for an additional firefighter

• $86,339 for an additional code enforcement officer

• $63,502 to upgrade the part-time code enforcement clerk to a full-time code enforcement clerk

• $50,776 to upgrade a part-time custodian to full-time custodian to handle increased upkeep at the new City Hall and Boat Ramp Pavilion

• $68,003 for an assistant public works director

New spending from the sanitation and street sweeping fund includes:

• $65,327 to purchase a pickup, trailer and mobile vacuum cleaner to pick up litter on 16^th Street and after city events

• $75,506 for an operator for the mobile vacuum cleaner.

From special funds, Knauf proposes spending $122,777 of Community Development Block Grants to purchase and improve parkland in a low-to-moderate income area.

“The budget revenue and expenditure recommendations are based on the current financial trends and the operating needs of the City,” Knauf wrote in an introductory note. “There is increased business activity occurring in Orange, sales taxes are increasing from pre-Hurricane Harvey levels and property values are rising; the indications reflect a good economy.”

Knauf noted that a major change in Texas law, Senate Bill 2, takes effect Jan. 1, 2020 and will greatly affect the city’s ability to generate taxpayer funds.

While the law that will cover the 2020 fiscal year (which begins Oct. 1, 2019) allows cities and counties to raise their tax rates up to 7.999% above the effective tax rate without asking voters’ permission, the new law – going into effect for fiscal year 2021 budgets – would force a taxpayers to vote for any raise of 3.5% or higher than the effective tax rate.

The 80.69 cents per $100 tax rate is 7.3% above the effective tax rate of 75.15 cents per $100, the rate at which last year’s properties would return the same amount of revenue as in 2019’s budget.

“We used to look at budgets and see which ones we could postpone for future budgets,” Knauf told city councilors on Aug. 8. “We’re not going to be able to do that.

“The game has changed. This is a heavy capital improvement budget. Normally, I would not have recommended such a big increase, but we need to look to future years.”

Besides capital improvements, Knauf’s budget includes a 2 percent cost of living increase for all city employees and “replacement of a lot of vehicles.”

Council members favored adding another employee holiday, Veterans Day, at a cost of $25,000 for police, fire and public works overtime.

“I feel for the taxpayers, but playing the lottery is not an option,” Knauf said. “One thing I learned in my life is either you manage change or let change manage you.”

City council held a budget hearing Tuesday. Tax rate hearings are set for 5:30 p.m. on Tuesday, Aug. 27 and at 9 a.m. Tuesday, Sept. 10.

Mayor Larry Spears, Jr., had the last word.

“We’re preparing for major growth,” he said. “You can’t enjoy major growth if you’re not prepared for it.”