Posted 11:18 pm Thursday, August 09, 2012
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Tyler officials outline lean budget plan
Tyler's new no-frills budget proposal calls for a decrease in the property tax rate, a continued emphasis on cutting expenses and more reliance on a lean, well-trained workforce, city officials said Wednesday.
These strategies — combined with a hike on water and wastewater services — are among the key points in a new fiscal plan that local officials believe can help the city continue weathering a tough economy.
It's been a rough couple of years, officials said, punctuated with erratic sales tax collections and flat-lined revenues, and the new proposal seems to take all that into account.
“We've been very conservative in terms of budgeting,” City Manager Mark McDaniel said.
Amid the cutbacks, there's a bit of sunny news, too — more shelters are suggested for Tyler Transit stops and a few more outdoor warning sirens are requested to alert residents to bad weather.
A public hearing on the entire proposal is set for Aug. 22 with possible adoption on Sept. 12, well ahead of the Oct. 1 start of the new budget year, records show.
Tyler is well-positioned financially, carrying an AAA bond rating, paying cash for most capital improvements and maintaining a property tax rate that's among the lowest in the state, Mayor Barbara Bass said, crediting city employees with helping hold things together.
“For 15 years we've been at or below the effective rate,” the mayor said. “We want to be good stewards of what we are collecting.”
The new plan builds on years of planning that started years ago with the city's BluePrint and continued with the Tyler 21 comprehensive plan, coupled with efficiency programs such as the belt-tightening Lean Sigma project, the city manager said.
As a result of these and other efforts, the city maintains about a 15 percent reserve in its operating funds.
“We feel really good about that,” the city manager said.
These strategies — combined with a hike on water and wastewater services — are among the key points in a new fiscal plan that local officials believe can help the city continue weathering a tough economy.
It's been a rough couple of years, officials said, punctuated with erratic sales tax collections and flat-lined revenues, and the new proposal seems to take all that into account.
“We've been very conservative in terms of budgeting,” City Manager Mark McDaniel said.
Amid the cutbacks, there's a bit of sunny news, too — more shelters are suggested for Tyler Transit stops and a few more outdoor warning sirens are requested to alert residents to bad weather.
A public hearing on the entire proposal is set for Aug. 22 with possible adoption on Sept. 12, well ahead of the Oct. 1 start of the new budget year, records show.
Tyler is well-positioned financially, carrying an AAA bond rating, paying cash for most capital improvements and maintaining a property tax rate that's among the lowest in the state, Mayor Barbara Bass said, crediting city employees with helping hold things together.
“For 15 years we've been at or below the effective rate,” the mayor said. “We want to be good stewards of what we are collecting.”
The new plan builds on years of planning that started years ago with the city's BluePrint and continued with the Tyler 21 comprehensive plan, coupled with efficiency programs such as the belt-tightening Lean Sigma project, the city manager said.
As a result of these and other efforts, the city maintains about a 15 percent reserve in its operating funds.
“We feel really good about that,” the city manager said.
REVENUE SOURCES
A closer look at the numbers reveals Tyler’s new $102.4 million budget proposal suggests decreasing the property tax rate by a tenth of a cent, from 20.89 cents per $100 valuation to 20.77 cents.
The city expects to receive about 25 percent of its budget, roughly $14 million, from property taxes.
“We’re going down to the effective rate,” McDaniel said, describing the level at which revenues would equal the previous fiscal year.
This proposed reduction equates to a more than 60 percent decrease in property tax rates since 1994 when the rate was 53 cents, records show.
The impact of the new rate means someone with a $100,000 home who pays $208.86 in taxes now will pay $207.71, about $1.15 less, the proposal shows.
People with a $150,000 home will pay $311.56 instead of their current $313.35, a $1.79 decrease; while those with a $200,000 residence will pay $415.42 rather than $417.72 for $2.30 in savings.
Compared to similarly sized Texas cities, Tyler's 0.2274 tax rate is lowest; Waco, at 0.7398 is highest, records show.
Last year, Tyler city leaders rolled out a $100 million budget plan that axed vacant positions and incorporated rate hikes on trash pickup, but held the line on its property tax rates.
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.
The picture seems to be improving with the new budget predicting a slight boost in sales tax collections, from $23.2 million to $23.7 million, or about 41 percent of its budget.
The city expects to receive about 25 percent of its budget, roughly $14 million, from property taxes.
“We’re going down to the effective rate,” McDaniel said, describing the level at which revenues would equal the previous fiscal year.
This proposed reduction equates to a more than 60 percent decrease in property tax rates since 1994 when the rate was 53 cents, records show.
The impact of the new rate means someone with a $100,000 home who pays $208.86 in taxes now will pay $207.71, about $1.15 less, the proposal shows.
People with a $150,000 home will pay $311.56 instead of their current $313.35, a $1.79 decrease; while those with a $200,000 residence will pay $415.42 rather than $417.72 for $2.30 in savings.
Compared to similarly sized Texas cities, Tyler's 0.2274 tax rate is lowest; Waco, at 0.7398 is highest, records show.
Last year, Tyler city leaders rolled out a $100 million budget plan that axed vacant positions and incorporated rate hikes on trash pickup, but held the line on its property tax rates.
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.
The picture seems to be improving with the new budget predicting a slight boost in sales tax collections, from $23.2 million to $23.7 million, or about 41 percent of its budget.
For most of the year it's been a roller coaster of gains and losses.
“It's been very frustrating,” Interim Chief Financial Officer Keidric Trimble said. “It changes tremendously.”
A successful election in November legalizing beer and wine sales could generate more revenue, but officials aren't prepared to bank on it.
Anything extra will likely go into savings, the mayor said.
The remaining revenue sources are varied: 17 percent, or $10 million, comes from franchise fees; 12 percent, or $7 million, from fines and fees; 5 percent, or $3 million, from miscellaneous sources.
About three years ago, the city initiated a series of conscious cost-cutting measures in hopes of stretching tax dollars, officials said.
Lean Sigma is cited as helping carve out more than $2.4 million in hard and soft savings since 2009 by empowering employees to streamline workplace processes to eliminate waste, such as reducing unnecessary overtime.
And the city's in-house education center, City University, yielded about $375,000 in training costs saved instead of having them outsourced.
“This is really about managing your operation,” McDaniel said. “We're really proud of our employees.”
“It's been very frustrating,” Interim Chief Financial Officer Keidric Trimble said. “It changes tremendously.”
A successful election in November legalizing beer and wine sales could generate more revenue, but officials aren't prepared to bank on it.
Anything extra will likely go into savings, the mayor said.
The remaining revenue sources are varied: 17 percent, or $10 million, comes from franchise fees; 12 percent, or $7 million, from fines and fees; 5 percent, or $3 million, from miscellaneous sources.
About three years ago, the city initiated a series of conscious cost-cutting measures in hopes of stretching tax dollars, officials said.
Lean Sigma is cited as helping carve out more than $2.4 million in hard and soft savings since 2009 by empowering employees to streamline workplace processes to eliminate waste, such as reducing unnecessary overtime.
And the city's in-house education center, City University, yielded about $375,000 in training costs saved instead of having them outsourced.
“This is really about managing your operation,” McDaniel said. “We're really proud of our employees.”
PROJECTED EXPENSES
For anticipated expenditures, the city allocates about 67 percent of its budget for public safety; plus another 9 percent for parks and recreation; 9 percent for public works; 8 percent for miscellaneous; 4 percent for general government; and 3 percent for courts, records show.
In actual dollars, about $38 million is earmarked for police and fire; $5.2 million for public works; $5.1 million for parks and recreation; $1.5 million for courts; $4.7 million for miscellaneous; with the remainder going toward general government.
One-time capital expenditures include $200 million for traffic management devices and signals; $391,000 for equipment and new computers for police cars; $65,000 for park improvements; $75,000 for a development plan for the downtown area; $310,000 for street maintenance; and $30,000 for updates to the Tyler 21 plan.
At the airport, officials are pursuing phased-in improvements that include a rental car facility with a car wash bay and updated signage.
A new lift to aid in mobility for people with physical challenges and some cosmetic upgrades are planned for the Tyler Rose Garden Center, funded with hotel-motel taxes.
In other activities for the new fiscal year, street crews plan to add sidewalks in underserved areas and some streets are slated for a new coating of asphalt, officials said.
By way of staffing, the city opted two years ago to freeze roughly 140 city jobs and eliminated last year 20 vacant positions.
Some hiring has resumed since the economic slowdown, but at an unhurried rate and on a case-by-case basis, officials said.
“We're working with fewer staff, but we're gaining skill and expediting processes,” McDaniel said. “We're operating with fewer people than in 1984-85, but our population grew. We're running an extremely lean operation.”
In those years, the city had 899 full-time employees; as of July, there were 757.
People are shouldering more responsibilities, but the city wasn't able to give out pay raises in this current fiscal year.
But some pay adjustments are on the horizon for next year, namely in the form of required 3 percent raises for civil service personnel and performance based salary boosts, ranging from 1 to 3 percent, for civilians, records show.
In actual dollars, about $38 million is earmarked for police and fire; $5.2 million for public works; $5.1 million for parks and recreation; $1.5 million for courts; $4.7 million for miscellaneous; with the remainder going toward general government.
One-time capital expenditures include $200 million for traffic management devices and signals; $391,000 for equipment and new computers for police cars; $65,000 for park improvements; $75,000 for a development plan for the downtown area; $310,000 for street maintenance; and $30,000 for updates to the Tyler 21 plan.
At the airport, officials are pursuing phased-in improvements that include a rental car facility with a car wash bay and updated signage.
A new lift to aid in mobility for people with physical challenges and some cosmetic upgrades are planned for the Tyler Rose Garden Center, funded with hotel-motel taxes.
In other activities for the new fiscal year, street crews plan to add sidewalks in underserved areas and some streets are slated for a new coating of asphalt, officials said.
By way of staffing, the city opted two years ago to freeze roughly 140 city jobs and eliminated last year 20 vacant positions.
Some hiring has resumed since the economic slowdown, but at an unhurried rate and on a case-by-case basis, officials said.
“We're working with fewer staff, but we're gaining skill and expediting processes,” McDaniel said. “We're operating with fewer people than in 1984-85, but our population grew. We're running an extremely lean operation.”
In those years, the city had 899 full-time employees; as of July, there were 757.
People are shouldering more responsibilities, but the city wasn't able to give out pay raises in this current fiscal year.
But some pay adjustments are on the horizon for next year, namely in the form of required 3 percent raises for civil service personnel and performance based salary boosts, ranging from 1 to 3 percent, for civilians, records show.
SERVICE FEES, INSURANCE
In other budget highlights, rate hikes are suggested for water and wastewater services — 2 percent for water and another 7 percent for wastewater, according to a study conducted earlier this year.
“All of this is driven by a capital improvements needs,” the city manager said.
The increases are designed to ward off a looming $4.7 million funding gap, due primarily to $7 million in state and federal mandates.
If the council agrees to the adjustment in this new budget, an average household starting Oct. 1 could see a $2.43 increase on their water bill.
No changes are planned for solid waste collection, and city employees are being asked to pick up more of their costs for health insurance.
Medicare-eligible retires age 65 and older will be asked to pay more for some of their insurance coverage.
“We want to cap what the city contributes today,” McDaniel said.
The budget proposal can be viewed online at www.cityoftyler.org or in person at City Hall, 212 N. Bonner Ave.
“All of this is driven by a capital improvements needs,” the city manager said.
The increases are designed to ward off a looming $4.7 million funding gap, due primarily to $7 million in state and federal mandates.
If the council agrees to the adjustment in this new budget, an average household starting Oct. 1 could see a $2.43 increase on their water bill.
No changes are planned for solid waste collection, and city employees are being asked to pick up more of their costs for health insurance.
Medicare-eligible retires age 65 and older will be asked to pay more for some of their insurance coverage.
“We want to cap what the city contributes today,” McDaniel said.
The budget proposal can be viewed online at www.cityoftyler.org or in person at City Hall, 212 N. Bonner Ave.
