Bastrop City Manager Lynda Humble on Tuesday night presented the City Council with its proposed 2017-18 budget, which calls for a tax increase, salary increases for city staff and several new positions.

Humble said the budget is a starting place for a multiyear effort to enhance tourism and development in Bastrop.

"This document represents the most important thing staff will collectively work on all year," Humble told the City Council Tuesday night. "It represents the most important decision you will make all year because it is … the funding conduit to all the programs and services that we will provide our citizens over the course of fiscal year 2018."

Council members approved a resolution calling for a property tax rate of 56.4 cents per $100 valuation for fiscal year 2018, keeping it the same as the current fiscal year. That would translate into a higher bill for many property owners, however, as the city is not lowering the tax rate to consider rising property values.

Home values in Bastrop County increased on average 16 percent this year, according to preliminary data from the Bastrop Central Appraisal District, which sets property values but does not play a role in setting tax rates. If the city does not lower its tax rate to 53.83 cents per $100 – or the effective tax rate, which would keep property owners’ bills the same as last year – then it must advertise the proposal as a tax increase.

Instead of focusing on large-scale capital projects in the proposed budget, the city is proposing to clean up its curb appeal, enhance tourism, repair drainage, expand staff and boost development. Humble said her main goal is to expand the city’s property tax base with development and annexation, as well as increase tourism and sales tax revenue.

The city expects to collect about $10 million in revenue next fiscal year for its general fund to finance all city departments. With an existing fund balance of about $2.9 million plus other transfers, the city has about $13.7 million available to spend. It has proposed spending $10.8 million, keeping budgets nearly the same as last year for all departments.

The budget calls for a 2-percent salary increase for all city employees, as well as a 2.5-percent increase on their anniversary. The city manager is also proposing several new staff positions, including a new planning director, assistant public works director, IT system administrator and full-time television and broadcast employee.

The city manager is also proposing to hire a new water and wastewater foreman, drainage workers and associate judges for the city’s municipal court and increase hours for the city’s two paid firefighters.

There are no capital improvement projects that are expected to be financed out of the general fund, Humble said, leaving more money for day-to-day operations.

A widespread increase in building fees charged to developers will mean more money for the city’s Planning Department, which has relied on an outdated rate structure from 1995 that is out of line with most Texas cities. It left taxpayers on the hook to subsidize about $234,000 of the department’s needs annually, Humble said.

Additionally, the city has proposed setting up an innovation fund to finance projects that overlap between fiscal years. It will include $487,500 in excess money from the general fund and $256,000 from Bastrop Power and Light to pay for several projects, including designs for a new skate park and a trail from Chestnut Street to Bastrop State Park, new servers and computer aided dispatch software for first responders and a new CARTS bus route.

The city has $488,419 in red-light camera fines it plans to use to stripe roads and add new street signs to improve public safety. The remaining money will be used to build new sidewalks, which many residents said was a priority when filling out surveys to create Bastrop’s new comprehensive plan.

Humble said she used the document, which was adopted in November, as a guidepost to craft the budget, since it most clearly outlined resident wants and needs. It will continue to be referenced going forward, she said.

With keeping the tax rate at the same rate, the city stands to collect about $221,000 in extra revenue. But despite that boost, Humble said it is critical for the city to grow its tax base so it has a stable source of revenue to support its growing needs and programs.

Currently, the city relies largely on sales tax revenue — which makes up about 41 percent of the general fund— for its revenue. Sales tax revenue fluctuates based on consumer confidence, Humble said. Last month, the city’s sales tax revenue was down 5 percent compared to the same month last year. Elgin and Smithville saw revenue increases.

Humble hopes a focus on tourism in the city will help boost sales tax revenue.

The city’s hotel occupancy tax fund, which is expected to bring in about $2.9 million next fiscal year, will be used largely to fund Bastrop’s new destination marketing organization, which will promote the city as a tourist destination. Officials are working to finalize a contract with the nonprofit. The DMO is expected to receive 50 percent of the city’s hotel occupancy tax funds.

Humble has proposed creating a Hospitality and Downtown Department to manage the rest of the money.

According to the preliminary budget, the $7 million debt on the city’s convention center will continue to be paid completely by hotel occupancy tax funds, despite an earlier proposal to shift the burden to the city’s general fund debt service.

The city has also identified $28 million in water and wastewater infrastructure projects that it hopes to bring online in the next five years, including a multimillion-dollar wastewater treatment plant on the city’s west side. The projects will likely cause a hike in water rates beginning Jan. 1, city officials said. None of the projects have been financed yet.

The city’s water and wastewater budget will stay the same for 2017-18 as last year, according to the preliminary budget.

Officials are working out a newly proposed drainage maintenance fund, which will include about $350,000 a year to maintain ditches and detention ponds, clear debris and inspect infrastructure. All residential utility customers would be charged $3.75 per month and commercial businesses $7.50 per month to finance the work, according to the preliminary plan. The city plans to educate the public about the measure, which will likely be adopted in October.

A budget workshop is planned for 6:30 p.m. Monday at City Hall to discuss general fund expenditures. The City Council is set to adopt a final budget on Sept. 26.