Posted 10:41 pm Thursday, August 02, 2012
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Tyler's New Budget Could Hold Water Hike
By JACQUE HILBURN-SIMMONS
jsimmons@tylerpaper.com
Tyler residents can expect more belt-tightening, fewer job offerings plus a possible hike in water and wastewater rates as the city tries to hold the line on services amid a shrinking revenue pool.
jsimmons@tylerpaper.com
Tyler residents can expect more belt-tightening, fewer job offerings plus a possible hike in water and wastewater rates as the city tries to hold the line on services amid a shrinking revenue pool.
A first look at next year's budget proposal is expected next week, but officials clearly are not promising more than they are prepared to deliver.
"It has been another challenging budget process given erratic sales tax collections and relatively flat revenues," City Manager Mark McDaniel said Wednesday. "Bottom line, we are looking at another 'maintenance' budget without new programs, services or staff."
There was no word on an exact dollar figure for the plan, set to be rolled out publicly Wednesday, followed by a public hearing Aug. 22 and possible adoption Sept. 12, prior to the Oct. 1 start of the new budget year.
Don't expect a lot of frills in this new package, the city manager warned.
"We will simply be trying to keep up with current service needs and street and utility infrastructure, focusing largely on core services of public safety and public works," McDaniel said.
Last year, city leaders rolled out a budget plan that axed vacant positions and incorporated rate hikes on trash pickup, but held the line on property tax rates.
The city pays for capital projects through half-cent sales tax revenue and has no general obligation debt, the second of which allows it to allocate every available dollar into operations and maintenance.
It's unclear how long the city will choose to continue operating in this mode, given continued public calls for new capital investing such as the construction of an event center and a downtown parking garage.
McDaniel said this latest proposal was built over a course of months, not weeks.
Efforts ramped up in January, joined also by tri-annual forecasting and closer scrutiny on spending.
Coupled with finding new and more efficient ways to do business, the city manager said the focus is, and will remain, on squeezing every dollar without shortchanging services.
The city's Lean Sigma program is cited as helping carve out more than $2.4 million in hard and soft savings since 2009 by streamlining processes to eliminate waste, such as unnecessary overtime and duplicated parts purchases, records show.
Tyler continues to weather economic slowdowns at the state and national level, a combination that resulted to freezing roughly 140 city jobs two years earlier.
The city subsequently eliminated 20 vacant positions from last year's budget, which was 6 percent more than the one that began in 2010, due partly to predicted boosts in sales tax revenue.
Sales tax revenue is the city's largest revenue source, and since the 2008 economic decline Tyler has lost more than $9.1 million from that funding stream.
New figures slated for release next week could show a smaller overall cumulative loss, but there are two months left to go in the fiscal year.
Tyler's roller coaster of sale tax receipts have been largely flat in recent months, punctuated occasionally with random spikes in revenue, adding increased pressure to the sluggish economic conditions.
McDaniel credits city staff with helping hold things together in good times and bad.
"Our success in managing through a difficult economy would not be possible without the heroic efforts of our very lean workforce," he said. "They truly are our resource engine."
Some hiring has resumed since the slowdown, but at unhurried rate and on a case-by-case basis.
That means certain employees are picking up more duties, especially those in the top administrative levels, officials said.
Tyler's top five earners include McDaniel, City Manager, $175,000; Gary Landers, City Attorney, $141,554; Gary Swindle, Police Chief, $140,000; Greg Morgan, Managing Director of Utilities and Public Works, $132,300; and Tim Johnson, Fire Chief, $117,000, records show.
Two of those five employees received additional compensation to offset larger workloads.
Since the last budget, Swindle, as an example, was promoted to a Managing Director, overseeing not only the police department, but also Neighborhood Services and the North East Texas Public Health District contract that includes animal control, records show.
His previous salary was $134,600.
Morgan, who earlier earned $126,294, was given oversight of water, wastewater, streets, drainage, warehouse, purchasing and utility billing, officials said.
About 66 percent of Tyler's budget is allocated for public safety; 3 percent for courts; 9 percent parks and recreation; 9 percent public works; and 13 percent miscellaneous.
A new water utility study released in June suggests a rate hike for Tyler Water Utilities customers to ward off a looming funding gap.
A recent study indicates the city's current water and wastewater rates are not keeping up with the projected demand and cost of service, resulting in a $4.7 million shortfall in the new fiscal year if left unaddressed.
The shortfall is due primarily to $7 million in state and federal mandates for capital improvements to bring aging infrastructure into compliance with current environmental standards, Morgan said earlier.
A 2 percent increase in water rates and a 7 percent increase in wastewater rates, equaling an effective increase of 3.7 percent, could help keep the utility fund afloat.
If the council agrees to the adjustment in this new budget, the average household could see $2.43 increase on their water bill; minimum billing customers, such as the elderly and fixed income customers, should not see an increase.
Customer charges are based on the amount of water sold and wastewater treated, officials said.
After the new budget proposal goes public Wednesday, residents will be able to see it online at www.cityoftyler.org or review a hard copy in person at City Hall, 212 N. Bonner Ave.
