By CHRISTIN COYNE
WILLOW PARK – With sales and ad valorem tax revenues projected to increase during the upcoming fiscal year, the proposed Willow Park city budget calls for maintaining the current tax rate.
Staff members say the budget is balanced without the need for the use of reserves or interfund transfers from prior years and includes some money for other projects such as road work.
However, council member Gene Martin said he believes the city needs to cut the ad valorem tax rate, particularly as voters will likely soon be asked to approve the issuance of bonds to cover the cost of needed capital improvement projects.
The two primary sources of the city’s general fund revenue are expected to increase this year.
The city’s taxable property values have increased from approximately $332 million to $349 million for the fiscal year beginning in October, according to information presented to the council.
At the proposed and current tax rate of 47.05 cents per $100 valuation, the projected property tax revenue for the city is expected to be nearly $1.6 million, according to the proposed budget.
Sales tax collections are projected to increase from approximately $636,000 collected during the 2012 fiscal year to $654,000 during the upcoming fiscal year.
The total general fund revenue, including other types of revenues such as franchise fees and development fees, is expected to tally $3 million.
Balancing the budget
Closing the city’s operating budget deficits was the top priority during the development of the proposed 2014 budget, according to the budget narrative.
“The [fiscal year] 2013-14 budget is balanced,” the council was told in a budget memo. “Normally this wouldn’t be considered a major issue. State law requires cities to submit a balanced budget, but it’s how the city has balanced the budget the last few years that has been an area of concern.”
Amending the current fiscal year budget earlier in the year revealed structural deficits, according to City Administrator Matt Shaffstall.
“Previous budgets included overestimated revenue projections and use of fund balance reserves to balance the budget,” Shaffstall wrote. “A tremendous amount of time and energy went into ensuring that the budget is balanced using current revenues to cover operating expenses.”
In addition to making sure revenues exceed expenditures, staff said an effort was made to match sources of funding so one-time revenue sources went to one-time expenditures, such as capital improvement projects.
Department heads were asked to maintain the status quo and forego new personnel or vehicles, though merit-based raises of up to 5 percent for city employees were budgeted to correspond with the new city employee handbook that calls for annual performance evaluations.
The service levels for several departments are also expected to change.
One current full-time employee in utility billing would become part-time and split time between two city departments, according to the budget.
The budget also recommends the Public Works Department be restructured, cutting the work crew from seven positions to six and restructuring the work shift schedule to include a rotating weekend shift. The city hopes to save $34,000 with the change.
The restructuring of the Development Services Department, which handles planning, zoning, permitting, inspection and code enforcement, would continue under the new budget. Hiring a department director, a new position for the city, and continuing with third-party plan reviews and inspection services is budgeted for the upcoming fiscal year.
The budget also discusses the option of converting Willow Park Fire-Rescue from a non-profit department funded primarily by the city to a city department overseen by the city.
The city currently contracts with the volunteer department, which employs eight firefighters and provides 24-hour coverage. There are an additional 13 reserve firefighters who work for other fire departments while volunteering for Willow Park and three traditional volunteers who live inside city limits. The city provides more than 90 percent of the department’s funding, according to the budget. A cost analysis prepared by city staff estimates the city would save more than $10,000 by transitioning to a city-run department and allowing for a reduction in inefficient insurance and benefits expenses.
Water and wastewater funds
City staff identified the city’s wastewater fund, with a proposed budget of $628,000, as the city’s largest financial challenge.
With a small customer base and a different billing structure than the water system, often allowing customers to have their bills capped, the fund isn’t paying for itself.
“The wastewater fund has been largely neglected by previous administrations, often being treated as an extension of the water fund, which is why the interfund transfers between the water and wastewater [funds] went unnoticed,” Shaffstall wrote.
The wastewater fund owes the water fund for years of operating transfers, a loan for the upgrades to the city lift stations, and litigation expenses.
At their next meeting, the city council is expected to finalize a contract for a rate study and adopt a new billing structure later in the year. New rates would not become effective until January.
However, staff recommended the city separate the accounting for the city’s two enterprise funds, certify the amount owed the water fund and create a debt repayment schedule during the upcoming fiscal year.
Similarly, the staff attempted to separate and clarify water fund accounting, which has a proposed budget of more than $1.8 million.
“For years the water fund has paid for a blend of expenses in the Public Works Department which included general fund, wastewater fund, solid waste fund and water fund expenses,” Shaffstall wrote. “This year’s budget made a concerted effort to identify the total cost of operating a water system and distribute expenses accordingly. In several cases, personnel costs were allocated by percentage to the city’s different enterprise funds.”
Objections to tax rate
With the city’s tax valuations up and the city’s debt obligations decreasing, keeping the current property tax rate will bring in more revenue for the city but isn’t expect to exceed the rollback rate, which would allow residents to call for a rollback election.
Martin argued Wednesday night, as he has in previous years, that the city should be reducing the tax rate.
Showing fiscal responsibility will enable the city to better sell needed bond issuances to voters, according to Martin, who said he would like to see the tax rate reduced to 40 cents per $100 valuation over the next two years.
Shaffstall said the proposed budget includes a pool of money that the city council can decide what they want to use it for – including spending on animal control, parks or lowering the tax rate.
A budget workshop is scheduled for Saturday, Aug. 24, and a public hearing on the budget and tax rate is expected to be held Sept. 17.