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Residents in Coppell could be paying higher property taxes by October.
The City Council recently approved the setting of the proposed tax rate of a 5-cent increase, or 7 percent, which will fund the debt service from the sale of $26.5 million in bonds for land purchase at North Lake, city manager Clay Phillips said.
If the tax rate is adopted by the council Sept. 8, the more-than $2 million property tax revenue garnered in 2009 will go toward paying down a year of the 20-year note, which is $2.8 million a year, said Jennifer Miller, director of finance. The additional funds will come from the city’s debt service fund balance in 2009-10, she said.
That would increase the tax rate to $.69146 per $100 of appraised property value. In a nutshell, homeowners of the average $272,478 home in Coppell would be paying an additional $138.66 in property taxes a year, Miller said.
The city purchased about 468 acres from Oncor after an extended legal battle over the 1,700 acres of North Lake property. The dispute stemmed from Billingsley Co.’s plans for a mixed-use project on more than 500 acres it already owned. A settlement was reached dividing property among the city of Coppell, the Coppell school district, which purchased 122 acres, Billingsley and Oncor.
“We issued the bond, we purchased the land, and now it’s time to pay it back,” Miller said.
Alternative funding options
Mayor Jayne Peters said with so many residents and businesses struggling financially, she doesn’t believe that this is the year to raise Coppell’s tax rate.
Peters would prefer the debt be paid from the general fund balance, which includes tax stabilization funds.
“In that same account, we have $16 million that’s undesignated,” she said. “My suggestion is that we use $1 million from the tax stabilization and another $1.8 million out of the undesignated funds.”
Some Coppell residents have formed a group opposing the proposed tax rate increase.
Barb Schmidt, a former Coppell school board member of seven years, is a member of the group. She said she’s aware of the reserve fund, which can be tapped at times of need. So she is joining other members of the community to educate the public.
“It’s a grassroots effort,” she said. “It’s just a bunch of us who are trying to get the word out to other citizens and make sure they’re aware of it. Most are surprised we’re [raising the tax rate] in this economic climate when we have this [reserve] fund.
“We understand tax increases need to happen. But is this really the best time?”
Phillips said the council does have the option to use the undesignated funds, which are intended to pay for operations, maintenance, services and programs. Essentially, the funds could be used for these city expenses over a longer period of time or used to offset the debt service for a few years, he said.
Phillips said the latter isn’t a wise practice because it would deplete the undesignated funds. Although no one wants to have to raise the tax rate, the final decision hasn’t been made, he said
“The council is trying to decide the best way to service the debt associated with the purchase of the land at North Lake,” he said.
Paying down the debt
Phillips said residents voted to approve the sale of bonds to purchase land at North Lake and knew about the annual debt service payments.
Peters, who does not get to vote on the proposed increase, said some are arguing that it’s now time for residents to help pay off the debt, but she believes they’ve already done so.
“My contention is it that they’ve already paid for it based on the healthy fund balance we have,” she said.
Public hearings
State-mandated public hearings on the proposed tax rate increase are scheduled at the regular city council meeting at 7:30 p.m. Aug. 25 and 6 p.m. Sept. 1 in the Council Chambers on the first floor of Town Center, 255 Parkway Blvd.
The council will have the option to adopt the proposal Sept. 8, and if the tax rate increase is adopted, residents will start paying the new tax rate Oct. 1, when the new fiscal year begins.
2008 city tax rates from cities bordering Coppell
Addison: 0.4535
Carrollton: 0.617875
Coppell: 0.64146
Farmers Branch: 0.4945
Irving: 0.5406
Lewisville: 0.44021
SOURCE: Dallas County Appraisal District
Lindsey Bever is a reporter with neighborsgo and can be reached at 972-436-5551 ext. 3004 or via e-mail at lbever@neighborsgo.com. If you have a story, photo or video you'd like to share, please post it directly on neighborsgo.com.
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I wonder if Mr. Phillips can tell us why Coppell's tax rate is so much higher than the other cities? If it's a function of scale then yes they are larger but yes their costs are greater. Does that mean our budget is out-of-line with reality for Coppell? Maybe the council is also getting the message that they have been very poor communicators. I have been a Coppell resident for 24 years and have seen the pains of growth and politics but this crew takes the cake.
ReplyDeleteThis isn't a debate....it's a REVOLT.
ReplyDelete