Brownwood City Council members held a public hearing Tuesday on a proposed budget of $30.52 million for fiscal year 2008-’09 and set Sept. 16 as the date to adopt the spending plan.
Council members also agreed to set the tax rate at at 74.52 cents per $100 valuation, the same as the current rate. It does, however, exceed the effective tax rate of 69.22 cents per $100 valuation. Truth in Taxation requirements mandate two public hearings if the rate exceeds the effective rate, and the council called for public hearings on Sept. 2 and Sept. 9. The council will consider adopting the tax rate on Sept. 16.
The tax rate is expected to generate an additional $352,000 in revenue because of the increase in property values, council members were told.
Council members heard two questions, both from Joe Cooksey, during the budget hearing. Cooksey asked how the council planned to balance the general fund portion of the proposed budget, which shows $13.3 million in revenue and $14.9 million in expenses. Cooksey said the city charter requires that the general fund be balanced.
City Finance Director Walter Middleton said the budget is balanced, although “individual funds do not balance. Middleton said other funds have surpluses and are resources for the general fund. “These resources, pooled together, provide a balanced budget,” Middleton said.
“ … We look at the city operations as a whole. We don’t distinguish between public works departments such as water, sewer, street, and sanitation from other departments such as parks, police, fire and facilities. These are all services to our citizens.”
Cooksey also asked what the projected unencumbered fund balances are for the general, utility and sanitation funds for the beginning of the fiscal year. Middleton said that’s not yet known, since the council doesn’t look at fund balances until the end of the fiscal year. The city’s fiscal year ends Sept. 30.
Utility rate increases in the proposed budget mean a “typical” Brownwood residential utility bill of $84 in the 2007-’08 fiscal year - consisting of water, sewer and sanitation - will increase to just under $90 for the same amount of consumption in 2008-’09, Middleton said earlier.
Increases in the water base rate are needed to cover increased bond payments to the water district’s new water plant and the city’s water line replacement bonds, budget documents state. An increase in the consumption rate is needed to cover the increased cost of treated water from the water district.
An increase in the sewer rate is needed because of increased costs of fuel, parts and maintenance. The sanitation rate will be increased to cover increases in landfill disposal, fuel and heavy equipment replacement.
The proposed budget, which is 4 percent larger than the current budget, contains proposed pay raises of 4 percent for department heads and 6 percent for non-Civil Service employees. It places a 6 percent increase into a pool for police and firefighter salaries, with allocation determined during the Meet and Confer process.
Factors in the budget, according to budget documents, include:
• Pay raises and benefit costs - The city continues to experience significant turnover in key departments. Retirement benefits to the Texas Municipal Retirement System will increase by 11.3 percent, and medical insurance costs will increase by 11 percent.
• Property tax - Valuations are 6.7 percent higher than last year, resulting in an additional $279,391 in revenue.
• Sales tax - An increase of 1.5 percent is projected, adding $66,405 to revenue.
• Fuel - Costs are expected to increase by 15 percent.
• Attrition - Two positions have been eliminated, saving $94,854. The Community Development Department has been eliminated, saving $8,770 over payroll costs.
• Infrastructure - The city wants to maintain funds for street, water line and sewer line replacement. The city has bond funds available for some street work and is looking at potential future bonds for major street improvements.
• To emphasize code enforcement, the city has reorganized the department into what is now called Development Services. Two positions have been transferred from the water and public works department into Development Services.
• Landfill - Annual funding for cell construction will increase by $308,000.
• Inflation - The inflation rate for cities during the last 12 months was 11.4 percent.