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Conclusion

When it comes time to talk about the city budget, the discussion always focuses on property taxes
because that is what people believe impacts them the most. In spite of all of the discussion of
property taxes there is still a great deal of misunderstanding. We hear media reports quoting
state elected officials saying “people are having to rent their homes from the government even
after they are paid for.” We also hear about people being taxed out of their homes. But, as
mentioned earlier in this summary, an average taxable value home in NRH in 2018 will incur an
annual city tax bill of $1,076. The average taxable value home in 2017 incurred an annual
city tax bill of $1,003. The decrease in the tax rate will result in an increase in the city tax bill
for the average residential property of $73 per year or an additional $6.08 per month. The
increase or decrease of a penny on the tax rate will impact the average residence by $18.39
on their annual tax bill. However, each penny on the tax rate produces or reduces $432,142 in
revenues to the General Fund. While decreasing the rate a half cent does allow for a slight
increase in city tax revenue, the increase in revenue allows the City to fund critical service
additions in the areas of public safety and street maintenance to keep up with the service
demands that have resulted from the growth of our community.

It is important to focus on what your property tax payments actually fund. The proposed budget
receives about 36% of its funding from property tax revenue. The other 64% of the funding comes
from sales tax, user fees and charges for services combined. Let’s put that into perspective by
looking at the expenditures. Approximately 59% of budgeted expenditures are for public safety.
The revenue generated from property taxes is not enough on its own to fund even just public
safety services, which 99% of NRH citizens have said is the most important service provided by
the city. Although it is not possible to fund city services without revenue from property taxes, the
fact is most of the revenue to the General Fund comes from sources other than property tax.
Other critical services such as water, sewer and trash collection are funded entirely through user
fees. Parks, recreation and other leisure services that contribute to the highly rated quality of life
in NRH are primarily funded through a sales tax dedicated to parks and recreation as well as user
fees.

Due to the effects of age, population growth and inflation, maintaining city service levels cannot
be accomplished at the same level of revenue. Our population has grown nearly 7% since the
recession ended in 2010. Our infrastructure continues to age from normal wear and tear. The
cost of materials and supplies continues to increase as evidenced by the most recent annual
inflation rate of 3.9%; however, the most significant budgetary impact is the effect of a
very competitive labor market, particularly for certain segments of our work force.
One area of budgetary impact is in the City's drainage infrastructure. The 2018/2019 adopted
budget includes an increase in our Drainage Utility Fee for the first time since the fee was
established in 1991. Increasing the average rate for the Residential Equivalent Unit from $3.00
to $5.50 will provide the resources to address drainage problems that are affecting private
property.

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