The numbers aren’t pretty, but they balance.
The Decatur City Council faced several tough choices in its budget process this year, from higher raw water costs to a big jump in debt service. They emerged from a Monday budget workshop with a proposed spending plan that raises both the property tax rate and rates for water and sewer customers.
City Finance Director Brad Burnett presented the highlights at a 4 p.m. budget workshop.
Next year’s budget, for the first time, caps the city’s spending on health insurance. It limits employee raises to 2 percent but leaves council members looking to the Economic Development Corp. board for a smidgen of tax relief.
“The meat of these budgets, between the salary increases and the capital, is very lean,” City Manager Brett Shannon told the council.
Under the proposed budget, the property tax rate goes from 67.3 cents to 71.7 cents – a 4.4-cent increase that comes in just below the rollback rate of 71.76 cents. That will bring in about $259,000 more tax dollars this year than last.
But the council hopes the EDC board will find a way to free up a little more funding for the Decatur Civic Center and provide the overall city budget with some tax relief.
“I’d like to explore the EDC option,” council member Randy Bowker said. “Even if it just gets you down from 4.4 to 4 cents, or 3-1/2, everything helps.”
Three council members sit on the EDC board, which meets Thursday.
Residential water and sewer customers can expect to see increases in the 16 to 20 percent range on their monthly bills. For 2,000 gallons, the bill goes from $42.28 to $51.08 a month, while 7,500-gallon customers will see their bills rise from $71.98 to $85.25.
Commercial customers are looking at increases of 17 to 26 percent, depending on use.
Several of the increases in the 2014-15 budget were outside the city’s control, Burnett pointed out. Those included:
- $127,000 in raw water costs from Tarrant Regional Water District;
- $189,781 in increased debt service – something the city knew was coming; and
- $71,543 more for the city’s deposit to the Texas Municipal Retirement System.
The council also opted for a 2 percent cost of living raise for employees – an additional $143,140 – but capped the amount the city will pay for dependent health insurance at $500.
As a result, health insurance costs actually went down $104,000 despite a 19-percent rate increase from carrier Blue Cross/Blue Shield. But some city employees will likely take home less money in the coming year.
The city’s capital budget also went up $112,000.
The water department faced what Shannon called a “perfect storm” as a result of higher raw water costs and lower use.
“I’m sure there’s going to be some grumbling,” he said. “I don’t know how you get around it. People do what you ask them to do – conserve water – and then you thank them by increasing the rates.”
In addition to raw water, costs for the chemicals used to treat the water, as well as the electricity to run the pumps in the city’s plants and lift stations, have gone up dramatically.
Public Works Director Earl Smith said even with the rate increases, the department will still be on a tight budget this year.
“This water rate still underperforms by $75,000,” he told the council. “If we sell a little more water, it looks a lot better.”
It was pointed out that rates had not been raised for three years.
“Raising rates is never popular, but as you can see, year-by-year our costs go up,” Smith said. “When you put it off two or three years, those delayed increases compound on you.”
The council approved the 71.70-cent proposed tax rate at its meeting, which was held after the budget workshop but noted that may come down depending on what the EDC board can do on Civic Center costs.
Another public hearing will be held on the tax rate next Monday, Aug. 25, at 6 p.m., and a final hearing on the budget and tax rate is Tuesday, Sept. 2, at 6 p.m. – the day after Labor Day.
Council member Jay Davidson, who served on the committee that hammered out the proposed budget, said the task was not easy.
“We cut a lot of things that people wanted, out of each department,” he said. “To do what we had to do, and keep a little bit of cushion in there for emergency stuff, there was no way to avoid raising taxes.”
The budget proposes total revenues and expenses of $14,914,724. The water fund’s budget is $4,360,190 while the general fund budget is $10,554,534.