El Campo staff propose 5% raises and warn a 1.5-cent tax-rate hike may be needed to balance budget

El Campo — City staff told the El Campo City Council at a June workshop that the city’s preliminary spending plan includes a proposed 5% cost-of-living increase for employees and a $150 monthly supplement targeted to lower-paid hourly workers, while warning that a penny-and-a-half increase in the property-tax rate may be required to balance the budget.

"Last year employees received no compensation adjustment, and they continued to show up," the presenter, Britney, said during the kickoff presentation. Staff emphasized the pay changes are intended to aid recruitment and retention and noted they are not proposing new positions; instead they removed a proposed utility hire and reclassified an existing position to a supervisory role to strengthen succession planning.

The presentation flagged sales-tax volatility as a primary revenue concern. "Assuming that the next three months bring in what they brought in at least last year, we’re going to come in 9% over what we budgeted in sales tax," the presenter said, while cautioning that the trend is driven by a few large taxpayers and past month-to-month anomalies.

Staff told the council that, under conservative assumptions and absent further revenue, the city would need roughly a 1.5-cent increase in the tax rate — presented as a "penny and a half" — to close the preliminary gap. Staff estimated a penny yields about $88,000 and said the penny-and-a-half would produce roughly $115,000 in additional revenue. That increase would add an estimated $2.58 per month on a $250,000 home, staff said.

The presenter stressed the city’s portion is one component of a homeowner’s overall tax bill: the school district (ISD), junior college and hospital district account for a larger share. Staff urged careful messaging to make that distinction.

Councilmember Garrett asked whether a 5% raise would keep the city competitive with neighboring employers and noted he had sought a $2-per-hour increase for some classifications. Staff said they modeled a $150 supplement and a 5% step because a broader hourly increase would materially raise the tax-rate impact and the general fund burden.

On utilities and fees, staff proposed a modest increase to residential base charges (a $3 monthly change was discussed in the presentation) and a $0.50 monthly bump to the transportation user fee, which staff said is restricted to street repairs. Staff said seniors and disabled customers would be assessed 20% less than residential accounts on the proposed base charges.

Capital requests in the preliminary plan include a parks mower, parking-lot repairs, IT server and cybersecurity upgrades, a new ambulance, park benches, and plant piping repairs at the Monzerat water plant. Staff said replacement of stop signs and required hazard-mitigation work are largely mandated expenses. No new long-term debt was added for the current year, staff said, though an outstanding SIB note approaching about $400,000 remains on the books.

Staff emphasized the numbers are preliminary: June and July collections, and new-construction valuations that typically appear after the protest season, will be available before the proposed budget is filed. "We’ll be back in July with an update and the full report," the presenter said.

The workshop ended without any formal votes; staff asked council members to provide feedback before the proposed budget is published next month.