Council holds special work session on truth-in-taxation and budget process

SUNSET, Feb. 26, 2025 — The Sunset City Council convened a special meeting Feb. 26 in the Sunset Room to hear a presentation and ask questions about the truth-in-taxation process and the city’s budget timeline.

The work session featured a presentation by Ryan Harvey, who described how certified property-tax rates are calculated and why some cities choose an annual truth-in-taxation review. “Property tax on the other hand does not capture inflation,” Harvey said, explaining that counties calculate a certified rate that will yield the same revenue as the prior year and that councils can instead set a maximum allowable rate and hold public hearings before adopting a final rate.

The presentation outlined the rationale used by West Point City, where Harvey works: holding an annual truth-in-taxation process gives the council two additional months between the June declaration of a maximum allowable rate and final budget adoption in August, allowing more time for public hearings and budget adjustments. Harvey described the approach as a way to smooth revenue collections and avoid large, sudden increases that can trigger strong public opposition.

Harvey gave examples from past years: he said typical household impacts reported in notices have been roughly $1–$3 per month, and that the county-certified rate is usually published in May. He also discussed terminology, saying councils often present the step as “maintaining the rate” even though the notice language must indicate a property-tax increase where required by state law. “Were not raising the rate. Were keeping it the same,” he said, adding that in many years the city has effectively lowered the tax rate when viewed over time.

Council members asked about local conditions — including limited new growth and a relatively small sales-tax base — and whether the council would be expected to tie any increase to a specific project. Harvey advised that many councils adopt the annual review to capture inflation and maintain a sustainable budget rather than linking a small annual change to a single project.

City staff also described the different fund types used in city budgeting (general fund, enterprise funds, special revenues and capital projects), fund-balance targets (the ordinance cites a 5% minimum and 35% maximum, while the presenter said she personally prefers not to fall below about 20%), and the citys internal procedures for projecting revenues using historical data pulled from their financial software.

No formal action to adopt truth-in-taxation was taken at the meeting. Council members discussed the timing for a decision if they choose to proceed: the council would need to declare the maximum allowable rate by the council meeting in June (the presentation said the county-certified rate typically arrives in May) to keep the truth-in-taxation schedule for the fiscal year.

The presentation and subsequent discussion included practical notes for public communications: the presenter said providing the city portion of a tax bill and showing typical dollar impacts (rather than headline percentages) helps residents understand proposed adjustments. Harvey and staff also described how prior year practice and incremental increases had reduced the size of any single-year change and the public backlash that can follow larger, less frequent increases.

The meeting opened and closed with formal motions to convene and adjourn the special meeting; those procedural motions passed without recorded opposition. The council did not vote on adopting any tax rate or budget at the session.

Council members and staff said they would continue to review the budget and reconvene if the council decides to initiate a truth-in-taxation schedule for the coming fiscal year.