Public hearing on city manager's proposed 2012-2013 budget scheduled for 5:30 p.m. today; here are the highlights
By CHARLES RICHARDS
Citizens of Paris are invited to a public hearing early in today’s Paris City Council meeting to comment on city manager John Godwin’s proposed budget for the new fiscal year that begin Oct. 1.
The public hearing will be the first topic on the regular agenda, following the (generally short) public forum and consent agenda.
The council had three afternoon budget workshops last week, giving particular scrutiny to the city’s propensity to rely on Hiring Partners for personnel rather than the city hiring its own employees.
But basically, the city manager’s budget has remained basically untouched.
Following is the memo sent on Aug. 1 from the city manager to the council, laying out the highlights of his proposal.
———CITY MANAGER’S BUDGET MEMO TO COUNCIL——-
City manager John Godwin, to the Paris City Council:
Simultaneous to working on the budget, I have been gathering ideas and thoughts for a comprehensive strategic plan for Paris. Without a good working plan, cities run the danger of adopting budgets that over time become fragmented, with little or no focus, instead just incrementally ratcheting costs up from one year to the next.
MAJOR ISSUES — A multi-year plan encourages us to spend monies more wisely and more efficiently over a longer period of time. I assume the council will adopt a good working plan well before next year’s budget cycle, but I also identified major issues in this year’s budget that I think will need to be worked on over the next several years, and I therefore tried to focus on funding those areas now. These major areas include continued cleanup of the city, expanding our commitment to planning, compensating employees based more on actual performance, investing in infrastructure replacement (not just repair), reorganizing certain functions and departments, and preparing for major improvements at Pat Mayse Lake and the future wastewater treatment plant project.
TAX RATE — Despite the need for many tangible improvements — some of them quite costly – in preparing the budget I have also tried to be cognizant of the need to be fiscally prudent, and maintain or possibly even reduce our ad valorem tax rate. In fact, it was my goal to reduce the tax rate by 0.5 percent as a good faith statement to our citizens. The total current tax rate is $0.52000 per $100 of assessed valuation. I am actually recommending a total ad valorem tax rate of $0.51107, a reduction of about 1.717 percent – three times the amount targeted. Such reductions are not something we can do every year, however. Some of what was required to reach that figure are one-time fixes, for example. But we do take the tax rate extremely seriously and hope to prove ourselves good stewards of public funds.
GENERAL FUND REVENUES:
Maintenance & Operations — Please keep in mind that cities in Texas actually adopt and maintain two different tax rates. The maintenance and operations (M&O) tax rate is that portion of the total tax rate that supports the operations of the city. All of this revenue goes into the General Fund. We are proposing an M&O rate of $0.41487 per $100 assessed valuation. This is a slight increase in the M&O rate from 2011-12, but is necessary to fund our $103,695 payment to SuRRMA for their debt obligations related to the expansion of State Highway 24 (between Cooper and Commerce).The figure equates to $0.0073 cents from the M&O rate not available for operating costs, making our true M&O rate $0.04757, or a decrease of 0.593 percent.
Water & Sewer – Another major recommended General Fund revenue change is Water & Seswer Utility (gross receipts) and Water & Sewer Transfer (indirect costs). Like most cities with multiple funds, Paris classifies certain funds as enterprise funds, one of which is the Utilities Fund. Enterprise Funds are intended to operate like a business, paying their own way through their own revenue sources, typically user fees. In order to treat our Utility Fund as an enterprise, it must assume certain business expenses, such as overhead, administration, human resources, risk management, auditing, management, etc., plus the payment of gross receipt taxes. Leaving these kinds of costs out understates the true cost of providing water and sewer services, and that in turn would mean property and sales taxes are subsidizing water and sewer. In the proposed new budget, I have increased the gross receipts payment to 5 percent, thereby making that payment equivalent to frees paid by other utility providers that operate within the city’s rights-of-way. This should generate an additional approximately $260,000 over the existing 3 percent rate. I am also recommending increasing the indirect costs charged to the Utilities Fund by the General Fund by $125,000.
GENERAL FUND EXPENDITURES:
The administration budget is up by 51.27 percent due to the funding of the city manager’s position for a full year following an extended vacancy, and also because the human resources manager’s costs have been transferred from accounting to administration. This in turn is a result of a reorganization that will administratively move HR to directly under the city manager effective Oct. 1.
- Accounting/auditing is down by almost $91,000, or 17 percent, due to the transfer out of HR functions, and because of expenditures for one-time building improvements in 2011-12.
- The police department operating budget is down by more than $50,00, the biggest portion of which relates to continued turnover of long-tenured employees and their replacement by younger officers at significantly lower pay. We are beginning to phase in a rank restructuring that over time should help with our unacceptable turnover rate, which in turn contributes to our very high overtime costs. No new positions are included.
- The fire department’s budget includes phase 1 of its own rank restructuring/reorganization plan that is intended to help increase employee stability. The restructuring should also help with station management and training; however, no new positions are included. In addition, I added almost $20,000 to pay for more training and $5,000 to pay for repairs to the training tower.
- Community development includes $36,830 for the new MyGov software, including both one-time purchase costs and annual maintenance and licensing fees. This software should help us do a much better job of managing code enforcement and building permitting and inspections. I have also included a part-time professional planner position, beginning in November, and have added a second lien mowing crew leader effective next April to expand our ability to mow more lots more quickly.
- The demolitions budget was increased from $60,000 to $100,000, and I have added $14,500 to contract lot mowing.
- I have added one new parks employee to incrementally help us do a better job of taking care of parks during the mowing season and drainage issues during the “off season.” This new position will be filled out of existing staffing elsewhere, so it will not increase costs. I have also added another $14,000 for contract mowing.
- We have added an extra $4,200 to repair curbs and gutters, $7,000 for traffic markings, $4,000 for storm sewers, and $45,000 to repair streets (funded in two different departments).
- There is a small increase in the garage budget to acquire diagnostic equipment that should help reduce both equipment and staff downtime.
- Emergency Medical Services includes a new replacement ambulance for $140,000 (we typically replace an ambulance a year, maintaining a seven-year replacement cycle), and the reuse of the chassis from the replaced ambulance ($9,000) in support of the regional Emergency Medical Task Force.
- The airport budget is down more than $60,000 due to a grant match that was included in the 2011-12 budget.
- We have increased the library’s book budget by 5 percent, or $5,000.
- Non-departmental includes the new SuRRMA payment, an increase in the visitors and convention center budget (based on an anticipated increase in hotel occupancy tax), a new $5,000 to Keep Paris Beautiful, and an increase in the health department budget to potentially pay for a new facility.
- I have included $27,296 to pay for raises for certain selected employees based on actual performance. This will not be used for any type of across-the-board or automatic raises.
- No funding is included in this budget for a cost-of-living (COLA) increase for retirees, which I understand may be overdue. If it is the council’s wish, we can work that in.
UTILITIES FUND REVENUES:
Most fund revenues are generally expected to remain stable, except for wastewater, or sewer, service charges, which are budgeted to increase by $107,504, mostly due to the recently approved rate adjustment. Interest earnings continue to be exceptionally low, so we are trying to be very conservativein each fund when estimating that revenue. Water sales are budgeted at a higher rate (up $251,511) due to increased sales and higher estimated usage.
UTILITIES FUND EXPENDITURES:
- Inter-fund transfers to the General Fund for gross receipts and indirect costs increased by $427,000, as described above under General Fund revenues.
- Due to the retirement this year of significant utilities-related debt, we have been able to include in the budget a significant amount of new and replacement equipment for both the water plant ($160,000) and the sewer plant ($123,500), at Pat Mayse Lake ($55,000), and also at various sewer lift stations ($66,000).
- I have added $80,000 for street repair and $40,000 for drainage work.
- I have added $1.2 million for replacement of some of our worst water and wastewater lines in hopes of reducing outages, breaks, impacts on sewer plant volumes, street damage, and repair costs, and placed $55,800 in the budget to purchase equipment to help us do some of this work in-house. We actually began planning these projects on July 24 so we can move quickly once appropriation is approved; for the most part we will use in-house engineering. We may not be able to fund a line replacement program at this level in future years, but we absolutely need to make a commitment to some sort of long-term replacement program. An additional $3,405 million was approved in May to replace 15 old water lines as part of a Texas Water Development Board loan, although as part of a state program, actual construction is not expected to begin for more than a year and will not be completed until 2014.
- We have budgeted $400,000 for a new SCADA system. This vital communication system cost might be able to be deferred, but the need will not go away, so the sooner we can address it, the better.
- I have included $13,165 for merit raises for certain exceptional employees.
- Not in this budget year, but relatively soon, we will need to begin tangible plans for design and ultimate construction of a large new wastewater plant. This work too can be deferred, but operating and maintenance costs in the meantime are considerably higher, while dependability is lower.
This fund includes various grants received from time to time, as well as funding received from PISD ($128,604) and NLISD ($186,614) for a total of five school resource officers – two at PISD and three at NLISD. The largest single revenue accounted for is $235,280 for the auto theft task force. There are also monies for Main Street projects, police funding through a COPS grant (the cost of which will eventually have to be borne by the city), and parks and trail grants. All revenues and expenditures are for specific, special purposes. Use of moneys is usually highly restricted. This is a fully self-supporting fund.
EQUIPMENT REPLACEMENT FUND:
This fund is paid solely with surplus unencumbered revenues from previous years. We have included four replacement vehicles ($157,000), an outdoor warning siren ($23,000), and other minor equipment for the police department ($35,954). A total of $37,000 was included for fully equipping the soon-to-arrive new brush truck to work wildfires. As part of our agreement to purchase this apparatus, we agreed to support firefighting in other jurisdictions when needed, including sending firefighters to operate the equipment. Another $76,000 was budgeted for two Physio Control defibrillators/monitors in EMS. We are phasing out seven older defibrillators; four have been swapped out to date. Finally, we have included another $96,845 as part of a multi-year migration to upgrade city radios to narrow band.
PARIS ECONOMIC DEVELOPMENT CORPORATION:
The PEDC is funded through the special one-fourth cent, Type A sales tax. The corporation’s board reviews and recommends an annual budget, which is then approved by the city council. Revenues should be very stable. One notable change in expenditures is the elimination of the rental of the old depot building for $60,000 per year.
SPECIAL REVENUE FUNDS:
The city maintains a number of very small special revenue funds (Court Technology, Court Security, Child Safe Fee, Court Time Pays, Gambling, Police forfeitures) that statutorily must be kept separate and expended on very specific items. All are related to municipal court and the police department. These fees and forfeitures total $156,036, although in any given year actual expenses may vary well below that maximum amount as specific needs arise. Any amount not used in one year automatically carries over into future budgets. Uses are set by state law.
DEBT SERVICE FUND:
The interest and sinking (I&S) ad valorem tax rate pays for annual debt service and must go directly into the Debt Service Fund. The adopted rate is based on an arithmetical calculation consistent with Truth-in-Taxation laws. Our rate for 2012-13 will be $0.0962 per $100 of assessed valuation, a decrease from $0.1100. This was accomplished through the use of surplus monies that had accumulated with this fund. The biggest change in the fund is the retirement of a significant amount ($2,213,995) of water and sewer debt, which also shows up in the Utilities Fund.
———END OF CITY MANAGER’S BUDGET MEMO TO COUNCIL———