Leander Proposes 2.6-Cent Tax Rate Reduction

LEANDER, TX — For the sixth consecutive year, the City of Leander will include a property tax rate reduction into its proposed annual budget, officials announced.

Leander City Council considered placing the proposed tax rate on a future agenda for approval during its Aug. 2 regular meeting. The city's proposed budget is scheduled for council consideration on Aug. 16.

Leander's property tax rate and city budget were among several topics discussed by staff and council members at a recent semiannual retreat, officials said. Following those discussions, initially proposed rates were lowered even more in preparation for the council’s Aug. 2 meeting, according to city officials.

If approved, the city’s current property tax rate of 57.78 cents could fall to 55.18 cents, which is also 1.5 cents lower than the calculated effective tax rate of 56.68 cents. This means the average Leander homeowner would either see a slight decrease or almost no change in their city tax bill despite rising property values, officials said.

"We always want to meet or exceed expectations of high-quality city services while fulfilling our community's desire for affordability," City Manager Kent Cagle said in a prepared statement. "A major priority this year is the city workforce. We're strengthening retention with improved merit-based pay and expanding our core public safety and development services to meet the demands of unprecedented growth."

City planners estimate Leander's current population to be 59,838 based on calculations related to active water utility accounts in July. Since 2015, Leander has sustained an annual growth rate of 10 percent or more, outpacing the annual growth rates of some of the fastest growing cities in the nation, city officials noted.

Contributing factors to the proposed tax rate reduction include a significant expansion of residential home building, multifamily housing, and commercial developments such as St. David's Emergency Center in Leander's transit oriented development district. Combined, these improvements have contributed to $558.7 million in new taxable growth since last year.

Officials said proposed additions to the budget will include funding for 12 new firefighters to manage the city’s fifth fire station, two patrol and two criminal investigation positions in the police department, a senior activity center supervisor, and other market-based compensation adjustments for some public safety personnel.
Other changes to the proposed budget could result from a franchise agreement renewal with Pedernales Electric Cooperative. If approved by both parties, updated terms and conditions would increase Leander's franchise fee from 2 percent to 4 percent, generating $600,000 in additional revenue for the city. Franchise fees are paid by PEC for the use of public rights-of-way to distribute electricity throughout Leander. The increase to 4 percent would mirror other municipal franchises in the Austin region.

"As always, there are competing public policy goals in our tax rate and budget proposals, but I believe we have achieved a nice balance between improving service levels and keeping up with demand while providing tax rate relief to our residents," Cagle said. "We have also taken the first step to reducing our water rates without endangering our water supply or ignoring infrastructure maintenance needs."

With water utility revenues expected to increase following sustained customer growth in recent months and years, the city will also include a $1 reduction to minimum monthly charges for water service customers in its upcoming budget proposal, according to city officials.

The next Leander city council meeting is Thursday, Aug. 2 at 7 p.m. in Pat Bryson Municipal Hall located at 201 N. Brushy Street. Download the meeting agenda (link is external) or watch the live video stream starting at 7 p.m.

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