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Copperas Cove City Council looks at $1 million general fund deficit for fiscal year 2021-2022 budget

Cove Leader-Press

The Copperas Cove City Council discussed the budget initiatives and the deficit in the General Fund for fiscal year 2021-2022 during a workshop meeting Tuesday evening. 
The budget presentation showed a 9.29 percent increase in taxable assessed values for the next fiscal year, compared to this year, increasing from $1,282,971,041 to $1,402,203,395. The total projected tax levy collection increased from $11,026,040 to $11,757,090. 
In the general fund, the tax revenue for fiscal year 2021-2022 is $7,117,910, an increase of 2.3 percent compared to the current fiscal year. 
“When we receive those taxable assessed values, staff is very cautious about utilizing those values at face value, if I can say it that way,” said City Manager Ryan Haverlah. “The reason why is because they are estimates, and with those estimates, we want to make sure that we’re working on and preparing a budget in a way that doesn’t require when we get to the point of actually getting the certified values that we are now at a point of having to reduce the budget because the certified values came in below whatever the estimate was from the appraisal districts.” 
Budget Director Ariana Beckman led council through changes made to the budget initiatives since previous workshop meetings and discussions.
When factoring in all of the items and priorities previously discussed, the General Fund started with a $3.1 million deficit, Beckman said. 
City staff crunched numbers and removed several requested new job positions from departments, such as Information Technology Specialist II, GIS Technician, five new CCPD patrol officers and six new firefighters. 
By removing the new positions, the deficit reduced to $2.1 million. 
After crunching numbers again and removing several department requests, Beckman said they were able to bring the deficit to a little more than $1 million, which is the amount that will be included in the proposed budget to be presented to the council next month. 
Haverlah said that the city would use fund balance to balance the remaining deficit.
He told the council that back during February’s budget discussion, they had discussed that the current year’s budget had been adopted with a $1.5 million deficit, and he asked the council if it wanted to address the full deficit in this upcoming budget, reducing it by $1.5 million or incrementally, and at that time, the council directed him to address it incrementally. 
“So essentially, we’re moving from $1.5 million down to $1 million with the end goal and task of getting that down to zero.” 

Budget balancing options: Transportation user fee, cut EDC funding, elimination of services
The “transportation user fee” was brought up again by Beckman as an option to help balance the budget. This would generate approximately $504,000. In past discussions, this fee would be paid by residents as part of their utility bill. 
Of that amount, Beckman proposed that the city use half of that revenue for the street department in general fund, which she said would result in a reduction of $250,000 in expenses in the General Fund for the streets and maintenance. 
The next two options would be reducing the amount of sales tax revenue received by the Copperas Cove Economic Development Corporation. 
This option would require an election similar to the one held for the allocation of the 1/8-cent for street maintenance, back in 2020.
One option was to allocate 3/8-cent of sales tax to the city, which would generate $1.5 million, and the other option was to allocate 2/8-cent, which would generate just over $1 million. Allocating the 3/8-cent sales tax would essentially defund the EDC. 
“The reason this was put up there is I have received comments from council members about the lack of economic development activity that they are seeing within the city, and so this may be a discussion where we consider or have a future discussion about it going from a 4A corporation to a 4B corporation, providing additional flexibility to the economic development corporation to do additional work, additional efforts, or some other option in regards to utilizing that sales tax,” Haverlah said. 
Mayor Bradi Diaz said that she thought this is something worth discussing, but she wasn’t sure if the city council and EDC would be able to fully dive into the discussion during this budget cycle. 
The remaining items listed for possible budget balancing options included looking at eliminating certain city programs or outsourcing in instances where annual expenses are more than the revenues. 
Three examples listed include the Senior Center, the Aquatics Program and the Athletics Program. The senior center brings in of $1,750, with expenses totaling $56,174. The Aquatics Program brings in $88,800, with expenses totaling $181,052. The Athletics Programs bring in a revenue of $170,809 with expenses totaling $390,506. 
Other options listed but not discussed included reducing positions in Parks Maintenance, Golf Course Maintenance, custodial services, library staffing and even eliminating police officers in the Traffic Section and the Community Services section and reducing shift firefighter positions and eliminating a part time kennel tech at Animal Control. 
Most council members were against getting rid of the Senior Center services as well as the Parks Athletics Program. 
The last items on the list included the removal of the Homestead Exemption paired with a tax rate reduction from 78.65 cents to 76.85 cents per $100 valuation. 
Councilmember Jay Manning asked if the homestead exemption removal would just shift the burden to homeowners because commercial properties don’t qualify. 
Haverlah said that in bringing this up, Copperas Cove’s tax rate is compared to other cities’ tax rates, and those cities don’t have a homestead exemption, so while Copperas Cove may have a higher tax rate, it also provides the homestead exemption that other cities do not. 
When asked on what his suggestions would be for balancing the budget, Haverlah said that there needs to be a priority of services in the budget. 
“The governments, especially local governments, are here to provide certain primary services, general services. Those general services are public safety, so police, fire, infrastructure improvement and maintenance, so that’s going to be your street department,” Haverlah said. “That’s also going to include developmental services such as building and planning for our community, and so what does that leave out? That leaves a lot of the community service type of departments such as Parks and Recreation, the Library, certain services we provide under Animal Control, so if I was going to start anywhere, Mayor, it would be in those areas.” 
Councilmembers Dan Yancey and Joann Courtland expressed a desire to work through and discuss each option and to avoid being too quick to cut services. 
Courtland said she doesn’t want to “rush to judgement and then cut all this stuff and then we come and find out we had no deficit or we had a short small deficit and then we cut out all of the programs we could have afforded, that’s not, I don’t think that’s doing right by our citizens or our city.” 

Copperas Cove Leader Press

2210 U.S. 190
Copperas Cove, TX 76522
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