Bullard city officials scheduled a public hearing for the proposed 2009-2010 budget and tax increase.

The public hearing will be at 6 p.m. Tuesday, Sept. 14, at Bullard City Hall. The hearing will be followed by the regular monthly meeting of the city council.

The proposed tax rate is an increase of 8.733-cents per $100 valuation of property. If the rate is approved, the 2008-2009 rate of 47.0674-cents per $100 valuation will increase to 55.8004-cents per $100 valuation.

"All-in-all, I'm very pleased with the budget," said Bullard City Manager Larry Morgan. "It's a conservative budget and the (city) council is in unison with the budget."

According to city officials, the average value of a Bullard homestead residence in 2008-2009 was $143,923. Base on the 2008-2009 tax rate, the taxes imposed on the average home was $677. If approved, the proposed rate hike would increase taxes by about $87 for the owner of a home valued at $100,000, about $131 for a home valued at $150,000 and about $175 for a home valued at $200,000.

The proposed rate hike includes an increase for debt service or interest and sinking (I&S), which will increase from 23.1124- cents to 31.8454-cents. The proposed rate for maintenance and operation (M&O) will remain the same at 23.9550-cents.

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The proposed rate increase is less than the rollback rate, so a rollback election will not be necessary.

Morgan said city accounting procedures years ago used funds from the utility account to cover I&S payments. He said the city long ago corrected the accounting procedure, but increased tax rates were required to provide funding for the I&S account.

According to Randy Gorham, city accountant, the I&S increase is mandatory because the city will have a principal payment of $135,000 due during the 2009- 2010 tax year as a principal payment for the $3.2 million certificate of obligation approved in 2005. Funds from the certificate of obligation covered costs associated with the overhead water storage tank, wastewater treatment plant renovations and a water well.

Bullard officials said the city has been paying only the interest on the certificate of obligation through the 2008-2009 fiscal year. The principal payment will have to be paid this year and each year until the certificate of obligation is paid off. Since the payment will remain the same, it will not be necessary to later raise the tax rate to cover additional or higher payments regarding the 2005 certificate of obligation.

While property values in Bullard did increase slightly, Gorham said city officials were anticipating a larger increase. After taking into account homestead and senior citizens exemptions, the total value increased from about $126 million to about $129 million.

The 2009-2010 proposed budget is $2,309,000, an increase of about $81,000. City officials project revenues of $2,409,000 for the 2009-2010 year, an increase of about $159,000.