To the concerned citizens of the City of Howe, in the past budget year the City Council and I had to make some adjustments to the water, sewer, and trash rates because of contract obligations that we have. As you have noticed the water rates went up slightly, as did the trash rate. The sewer rate did not go up, but we did do away with the average billing for the summer.
As I said, the council and I did these things because of rate increases that the City of Howe has obtained over the years. Last year, when we renewed our contract with IESI, the contract price went up because of increases that they had acquired. The sewer contract that we signed with the City of Sherman went the same way, they increased their price several thousand dollars a month. We are also in a surface water contract with the Grayson Collin Water Alliance that is now taking well over $100,000 a year along with five other bond payment that are long term contracts of around $400,000 a year.
The reason that I want you to know these things is by October 1st the City Council will adopt a new budget. I have asked them this year to raise the tax rate as well as raise the water, sewer, and trash rates. I do not do this lightly, because these increases affect my pocketbook as it does yours. All of the governing body of the City of Howe as well as several of the employees live within the city limits and pay the same rates as you.
I also want you to know the reason for some of the payments that the City has. I mentioned surface water. Several years ago the City Council made the decision to add surface water to the city. At the time there was a huge building boom. Melissa and Anna doubled and tripled in size what seemed like overnight. The City of Howe was also in negotiations with developers at the time, but the boom just didn't make it this far. The good thing is we are ready when the building starts again and won't have to play catch-up as Melissa and Anna did. The bad thing is over time the debt obligation has just about wiped out the city's reserve funds.
Back to the increases, the average home in the City of Howe, according to the tax roll, is worth $80,000 and the tax increase that I am asking the council to do will increase the taxes about $34 a year. This is not a great amount. Water, sewer, and trash rates for a family of five will increase $70 a year, dependent on usage. These increases will require adjustments from us all.
The City staff has done an excellent job making cuts where they can, and has found several places to save the city money.
1. New electric contract saves $12,000 this year
2. Reduced phone cost $6,000 this year
3. Reduced Personnel saved $40,000 this year
4. Reduced fuel usage by $2,000
5. Refinancing Bonds reduce cost $20,000 this year and an average of $6,000 savings each year thereafter.
6. Invest money in local bank. This earns more interest, about $3,000 per year.
The total gain is $83,000. $80K in reductions and $3K in more revenue through interest paid.
That being done we have to look to you the tax payers for help. We have all felt the pain of the last year, and we know that no one wants to pay more for anything, but this city deserves to survive, and we are going to have to start by making sure that the City staff has the resources it needs to keep in operation, and that takes money. The City Council, staff and I will continue to find ways to save money, but we are at a point that the only things left to cut are city services and employees. I hope you will support us on this very difficult decision.
Thank you.
Jeff Stanley is the mayor of Howe.