Fate Mayor Bill Broderick heard opposing views from residents after he made statements about potential commercial development and the city’s tax rate during city council public hearings this week.

During a special called Fate City Council meeting on Tuesday, Broderick said the City of Fate has the lowest city tax rate in a six- or seven-county area — except for McLendon-Chisholm, which adopted a 7-cent tax rate last year.

And Fate, the mayor added, is on the verge of seeing commercial development “domino bigtime right up and down the Interstate 30 corridor and it’s going to look a lot like what you see in the City of Rockwall.”

Stephanie Adams and David Irek were among six Fate residents who spoke during public hearings on the proposed city budget and tax rate. They are the residents who voiced the opposing views.

“I understand what you said about the City of Fate having the lowest tax rate in the county,” Adams said. “But Fate also is one of the only locations in the county that participates in a MUD (municipal utility district) district.”

Adams figured tax rates for all Rockwall County cities, combining city, county and school tax rates.

Fate, she said, has the county’s highest tax rate when the MUD rate of .72 cents to the proposed city tax rate, school tax and county tax. Take the MUD tax away and Fate has the lowest rate — except for McLendon-Chisholm.

Residents of the Wood Creek subdivision pay the MUD tax.

Irek didn’t paint such a rosy picture of the city’s commercial development future.

He said small developers are “running as fast as they can from Rockwall and Fate” because both cities make it so difficult for commercial businesses. Irek added that he doesn’t see “you guys welcoming small businesses.”

“I just implore the city to do more and use the tax money, the sales tax, the ad valorem tax money, to try to figure out how to bring the small businesses in because they will hold up the city until the big Walmart and everybody else will come in,” Irek said. “There are a lot out there who want to do stuff, but right now, the city is not making it very inviting.”

The city has a proposed balanced budget of about $2.6 million for operations. The city council is considering a tax rate increase from 21.44 to 24.69 cents per $100 valuation.

Total revenue for the general fund is expected to be $2,654,336, which is 5 percent more than last year.

The 24.69-cent tax rate is expected to generate $1,075,310. The general fund will receive $851,831. The remaining $223,479 will be used for debt service payments.

Another major revenue source is sales tax. According to a statement Broderick read before the public hearings, sales tax took an unexpected drop in 2009-10 and is estimated to end the fiscal year at 25 percent under budget.

In the upcoming 2010-11 fiscal year, Broderick said, the city is hopeful that the newly annexed areas  will compensate for the revenue loss. The amount budget is $250,000.

The city council also is considering water and sewer rate adjustments.

Revenue for the water fund is based on a volume rare decrease in the amount of 3 cents per 1,000 gallons and an increase of $1 on the base charge. The base will now be $16 and the volume rate is $1.83 per 1,000 gallons.

The average monthly bill will go from $35.80 to $36.13.

Total revenue is projected to be $1,750,456, a 4 percent increase over last year.

Revenue for the sewer fund is based upon a rate increase from $1.96 per 1,000 gallons to $2.40 and a base rate increase from $25 to $26.

The average monthly bill will increase from $34.45 to $38.96.

Total revenue is projected to be $1,150,000, an increase of 6 percent over last year.

After Irek’s comments about the city-small developer relationship, City Manager Vicki Mikel asked him to meet with her later. She wants specific information.

“I’ve not heard that before,” Mikel said of complaints by small developers. “I’d like to hear that from you.”

“I’d like to be a part of that same conversation,” responded Broderick.

Mayor Pro Tem Forest Murley also invited Irek to make a presentation at a future meeting of Fate’s economic development board.

Councilmember K.C. Erwin had a response to Adams’ comments about the MUD tax.

Erwin said it’s “common consideration that there is a large concentration of people who are impacted by that (MUD) tax.”

Erwin said: “Because we are not a beneficiary of any of your .72 (MUD tax rate), if your house catches fire, unfortunately, the MUD district won’t put it out. Or, if the road has issues ... unfortunately, the MUD district won’t repair it. And so for us to just say, because we have the MUD district, we’re not going to be able to ever consider a tax increase for what the city’s services are, is certainly going to be very detrimental to the property values at Wood Creek, as well as the rest of our community.”

The city council is scheduled to consider adopting the budget and tax rate on Sept. 20.

 

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