The Katy City Council will later this month consider adopting a $54.8 million budget and a $0.44 per $100 property valuation rate to help pay for it.

City Administrator Byron Hebert presented the proposed budget at a workshop Thursday afternoon at City Hall. The overall budget is a $2.9 million, or 5.68% increase, from last year’s approved budget of $52 million budget.

“We are anticipating a 4% salary adjustment starting October 2023,” Hebert said. “If you look from last year’s budget to this year’s budget, we have an increase of $4.5 million, and $2.5 million of that is an investment back into our employees.”

Hebert said the proposed budget calls for the addition of six full-time employees. These positions include one patrol officer, paramedic/firefighter, street maintenance worker, permit clerk, museum coordinator, and fleet mechanic.

Hebert said the city prides itself on public safety.

“Both chiefs (Police Chief Noe Diaz and Fire Chief Kenneth Parker) understand that,” Hebert said. “They know that if people don’t feel safe, they’re not going to shop. If people don’t feel safe, they’re not going to go about in your city. So, we’ve got to make sure we keep a high presence of safety and you can see that. In our budget, it’s 54% of the total general fund budget, an increase in public safety over previous years. It is primarily due to salaries. Public Safety’s total increase is $1.8 million. That’s a 9.3% increase so were not defunding our public safety.”

The city last month created a new community development department, the purpose of which is to oversee the city’s planning, permits and inspections. Hebert said, however, that no new positions were created for that department.

“We didn’t create new positions,” Hebert said. “They were already here. We just moved people into a department.”

In a letter to the council introducing the proposed budget, Hebert said city staff is prepared for what he called a “proactive response” to several catastrophic scenarios.

“Recognizing that our revenues have not been impacted near the previous projected worst-case scenarios, the city is restoring the budget, slowly to pre-COVID conditions as possible,” Hebert wrote. “The goal is not to deplete services to the citizens while preserving a balanced budget and raising rates as a last resort.”

Hebert said 84% of the city’s revenue comes from three sources: property tax (40%), sales tax (38%) and services (5%). The proposed budget calls for $40 million in general fund revenues, $9.9 million in enterprise fund revenues, $3.4 million in debt service revenues and $1.5 million and hotel occupancy revenues.

The proposed property tax rate, $0.44 per $100 property valuation, is a decrease from $0.447168 per $100 property valuation. Hebert wrote the 2023 revenue from property tax is projected to increase by $1.1 million, a 7% increase from fiscal year 2022. He wrote that the increase is based on a reduced tax rate from the previous year on a larger taxable tax value of residential and commercial property.

Hebert wrote sales taxes for 2022 outperformed the projected budget amount. But while current sales tax collections are strong, Hebert said further opportunities to develop the commercial financial engine that feeds the city its share of sales tax is becoming more limited.

“The current projection of sales tax for fiscal year 2023, at $14,905,586 remains conservative under the looming economic recession and consequences of instability in Europe due to war,” Hebert wrote.

The council is expected to conduct public hearings on both the proposed budget and tax rate, and adopt both, at its Sept. 26 meeting.