In a 3-1 vote, the Llano City Council voted to set the proposed tax rate for this year’s budget at .41 cents per $100 taxable valuation for the city’s ad valorem tax. The proposed rate is two cents above last year’s rate, but for now only marks the highest the council could go, if it chooses to raise taxes in order to balance the budget.

The increase would raise a little more $25,000 over last year’s tax revenue. The lowest tax rate, or effective tax rate, that the City can adopt and still make their basic budget is $ .38669. Due to increases in property value new construction, the City would bring in around $1900 more than last year, if the effective rate becomes the tax rate.

Decisions on whether or not to raise the tax rate will be made once the details for the budget are worked out.

Currently, the Council is reviewing budgets presented by department heads, and debates about whether to give employee raises have become heated during council meetings. Citizen Marc Sewell contends that the proposed budget calls for salary increases of up to 27%, however, City Manager Finley deGaffenried says that the swing in increase comes not from actual increases, but due to positions that were either vacant last year, or were filled for only part of the year. deGaffenried told Council that the salary increases were 2% of the budgeted salary last year, across the board, but that it didn’t mean that each employee would see an increase.

Alderwoman Sherry Simpson proposed freezing city salaries and instead using the increased revenue from the tax increase to pay for Capital Expenses, that are currently budgeted using money from the City’s Sinking Fund. She suggested that the money in that fund be used for water projects.

Llano County Judge Wayne Brascom has requested that the City help fund the Llano Library this year, asking for approximately $21,350 to cover salary and benefits. The County’s request comes after budget cutbacks by the County. Council will explore that option.

The City will hold two public hearings regarding the proposed tax rate, August 20 and September 4, at the regularly called City Council meetings.

In other news, M&C Fonseca Construction Company was awarded the 2011 TX CDBG Water Line Improvement Project in the amount of $260,805. There were six bids received, and M&C Fonseca presented the lowest.

Four people were appointed to serve on the Llano Christmas Lighting Committee; Matthew Hawkins, Autumn Sagebiel, Cathy Parker, and Nelda Tallman.

Council also approved the second and final approval of the LEDC budget.