Copperas Cove city council, city admin discuss budget priorities, $993,000 general fund deficit
By BRITTANY FHOLER
The Copperas Cove City Council discussed budget priorities for the next fiscal year during their workshop meeting Tuesday evening and approved adjustments to the initial budget requests.
The budget requests revealed Tuesday evening included $1.725 million in expenditures, which council had previously mentioned were priorities, including a two percent cost of living adjustment (COLA) for city staff.
Other expenditures listed included employee market adjustments 95 percent- in Public Works/Parks/Library for $193,343; Police Department 2.5 percent Step Plan for $126,815; five Parks and Recreation laborers for $180,197; a custodian for the library for $35,340 and another for city hall, the technology building, for $35,900; six Firefighter II positions filled for $498,006; and the demolition and asbestos abatement of the old police department building for $148,303. There is also a salary savings of $248,902.
“That $248,000 in salary savings is not a priority that council gave us,” said City Manager Ryan Haverlah. “Just as [Budget Director] Ms.[Ariana] Beckman described, it’s really to illustrate the total at the bottom of that list- the $1.7 million- because that is the increase in the budget from the current year to this year. So, we wanted to make sure that you as council were aware, where is the total increase of the general fund budget, and it is $1.7 million and it makes up all of those amounts.”
The budget committee, which includes Beckman and Haverlah, went over the budget requests and adjusted the operating budget, taking out the demolition of the old police department building, in addition to new park labor position; and took out one custodian position.
After making these adjustments totaling $1.5 million, they were still left with a deficit of $993,000 in general fund.
“At $993,000, that allows all services in the general fund to continue as they currently exist and as we are currently providing services,” Haverlah said. “So, there is no reduction in service to our residents or to our customers in the general fund with the budget at a $993,000 deficit.”
The goal for the city is to reduce the amount used to pay expenditures from the fund balance, according to Beckman. Last year, the city used $453,000 from the fund balance to balance its budget.
Options to reduce expenditures or increase revenue also included removing the homestead exemption, adding a transportation fee, as well as decreasing the percentage of the cost of living adjustment or the step plan for the police department from 2.5 percent to 2 percent.
The Police Department’s step plan increases the employees’ salary by two percent each year based on longevity.
“One thing with the step plan is it is not what I would call an organically implemented step plan, where if an employee is here for 20 years, well they don’t get moved to step 20,” Haverlah said. “We’re implementing this to where they move to the most near step based on their current salary so it’s an implementation process to get the step plan started so that then we can phase in adjustments to employees’ salary overtime but again that’s all financially based and we’ve got to make those decisions based on the available budget each year.”
With these adjustments made, the city’s budget still had a deficit of $993,000, down from the $2.5 million deficit prior to those adjustments.
The city’s projected revenues are $17.18 million, while the projected expenditures are $19.77 million.
Council member Jack Smith brought up the fact that tax rolls have not been certified yet and may have to face a delay due to COVID-19, leaving the total amount of revenue even more uncertain.
“The other thing is the sales tax that is included in the proposed budget, we have not accounted for the financial impact of COVID-19 because we do not know what the financial impact is going to be,” said Beckman.
Haverlah explained that city officials met with the appraisal disricts in Lampasas and Coryell County and discussed the timeline necessary to comply with any changes needing to be made. Haverlah said that the appraisal districts anticipate that they’re going to be able to certify by the beginning of July, but that could change.
With sales tax, the city saw a three percent increase in sales tax revenue reflected for March 2020, which was before a number of businesses were forced to close their doors to the public by the governor’s executive orders.
With the fund balance, Haverlah explained that his goal is to have a true balanced budget, where revenues are greater than or equal to expenditures. For the last 10 years, the city’s budget has been adopted with an operating deficit, he added.
“The positive thing in all of this is that each year though, with the exception of one in the last 10 years, we have ended up with an increase in resources or revenues actually exceeded expenditures at the end of the year, but every year, that’s accounted for because of salary savings because we have so many vacant positions. We hire (for) those positions, we fill those positions, but they become vacant, and that is primarily a pay issue that is causing that within our organization because we hire people, we train them and you can ask them, we train them well enough that they go off to other organizations with that skill set, and they’re paid more,” Haverlah said. “And so it’s as I expressed to council last year: salary is a priority for me for our employees. Paying them what is necessary and right for us to retain all the knowledge that we’ve poured into them about our city and our operation, and so the tolerance itself was something that council you agreed to last year.”
The fund balance tolerance was $800,000 last year and was decreased to $450,000 for this fiscal year. Haverlah said he wanted to reduce that number again but did not know whether that would be possible considering the situation currently.
Council member Jay Manning said he felt that the cost of living adjustment could be decreased because the prices of things have gone down, some severely decreasing like gas prices.
Council member Fred Chavez said he agreed with the adjustments and suggested that instead of removing all Parks laborer positions, to half the number instead with two full-time and one part-time employee.
“The reality is that Parks and Rec is truly rehabbing their fields and many of the facilities that they have, and I would hate to cut them out at the pass right as they’re getting a good head of steam,” Chavez said.
Council member Dianne Yoho Campbell agreed with Chavez on this.
“I’m protective of some of those positions for the Parks,” Campbell said. “They’re necessary, and I’m also protective of the COLA because while gas prices have gone down, and based on what Ryan shared with us, that I think we can anticipate an increase in federal taxes and things like that which can impact quality of life for our employees, so I’m protective of that as well.”
Council members agreed with keeping the one percent cost of living adjustment, which had been set to increase to a two percent adjustment.
The council members could not agree unanimously on whether to go for a transportation fee, which would add $504,000 in revenue, but they were in agreement to look more closely at what the transportation fee might look like.
Chavez added that if the city does implement the fee, it would be one of the few things that would be spread around to all citizens instead of singling out property owners.
While Jack Smith was against a fee, Campbell was open to the idea of one.
“These are difficult times but there are some of these things that we said were a priority and that we need to do, and we have to come up with the money to do that, and I think that is one way to do it,” Campbell said.
For the Water and Sewer Fund, changes include the hiring of an Assistant Director of Public Works and a Utility Administration Manager to provide common leadership over the entire department instead of having the utility administration department under two directors. For the Solid Waste Fund, changes include the hiring of a Transfer Station Supervisor and two laborers.