Copperas Cove looks at $2.9 million general fund deficit for upcoming budget
By BRITTANY FHOLER
The Copperas Cove city council held discussions and gave city administration direction on the preparation of the Fiscal Year 2022-2023 budget during their workshop meeting Tuesday evening.
The city’s departments have submitted their budget requests, and the budget committee, made up of City Manager Ryan Haverlah, Finance Director Velia Key and Budget Director Ariana Beckman, has reviewed those requests and held discussions with the departments in order to bring recommendations to the council.
In this preliminary budget, the general fund has a deficit of nearly $2.9 million, of which approximately $1.8 million is related to capital priorities that city council identified during previous discussions, Haverlah said.
However, some of the city’s fund balance could be used for one-time, capital purchases, he added. Using the fund balance for those expenses, would leave a just over a $1 million operating deficit in the general fund, he added.
Haverlah shared several recommendations for budget strategies, including allocating an additional 1/8-cent sales tax for street maintenance. The city has been using 1/8-cent of sales tax revenue towards street maintenance already for approximately four years, and this would bring the total allocation to 2/8-cent just to street maintenance, leaving a quarter-cent sales tax to fund the Copperas Cove Economic Development Corporation. This action would require approval by Copperas Cove voters.
The next item would be to use approximately $250,000 in fund balance from the Debt Service Fund, which would allow the tax rate to shift from Debt Service to the General Fund as well and allow an increase in revenue in the General Fund to help address the deficit.
Another possible suggestion is to eliminate selected new budget requests submitted by departments, therefore not including them to be proposed to be funded in next year’s budget, saving $16,618.
Another fund-saving suggestion would be to change the full-time position at the Senior Center to a part time position. The Senior Center was closed earlier due to a vacancy in the full-time position and an inability to fill said position.
“As Council is well aware, many of our seniors came to council meetings, contacted you directly and pleaded that we reopen the Senior Center,” Haverlah said. “Mr. Stoddard and his team have very successfully opened the Senior Center without that full time position being filled at all, and the activities and the seniors participating at the Senior Center are very happy and very pleased. A large number of seniors are now attending the senior center, whereas before we didn’t have as many attending the Senior Center. They have kind of set up their own organization, as their own participants, deciding how they’re going to function and operate, what they’re going to do. They’ve really organized and structured themselves, and so my proposal is allow that to continue, allow them to have that freedom without a full-time staff person trying to dictate or determine what programming they’re going to do or what activities they’re going to do. Allow them to have that flexibility.”
The final recommendation under the General Fund is expected vacancies, which total approximately $205,000.
“Over the past many years, we’ve had a number of vacancies throughout the year, and that generates budget savings because we didn’t expend the budget allocated for those positions, and so we expect to continue to have some vacancies, but as an additional measure to ensure that we can reduce expenses by that $205,000…I would require that every new vacancy that exists after October 1 would be held for a period of three weeks before it is advertised to be filled, thereby ensuring that we generate those vacancy savings,” Haverlah said.
In the event that a position became vacant, other staff in the department would end up picking up the additional duties from the vacated position. For example, if there was a vacancy in the building department, other employees would pick up the additional duties, which could result in this affecting the timeline of them accomplishing their current duties which could cause a delay with residents.
“I pray that we don’t have a vacancy in that department or any other departments,” Haverlah said. “However, the reality exists that we do have vacancies throughout the city and that we can generate savings as a result of those vacancies and ensure that we do not expend those funds and we generate that cost savings.”
With these recommendations, the General Fund will see revenues go from a deficit of $2.9 million to surpassing expenditures by $1,779.
“Now I will look back, and this is the first time in 12 years that the city would actually have a balanced budget with current revenues and current expenses for operational cost and operational revenues,” Haverlah said.
Property tax rate likely to decrease
Haverlah told the council that the city has received the official estimated certified values and based on those estimates and the increased property values, the city’s ad valorem tax rate is going to decrease. The city staff worked with the County Tax Assessor/Collector to calculate the estimated no-new revenue and voter approval tax rates, which are typically calculated later on in the year.
Increased costs for programs?
Under the general fund and also other funds, another recommendation was for adjustments to fees for services to account for increases in costs. Haverlah explained that the Parks and Recreation Department has seen an increase in the cost of chemicals necessary to maintain the city’s pools, as well as the cost for chemicals for the city’s water system.
Fuel costs have also increased greatly, and this is the first year that the city has actually exceeded its original budgeted field in nearly every department this year, Haverlah said.
Haverlah also mentioned compensation for critical services and employee groups with severe vacancies, most of which are in the Public Works Department.
“Our Public Works employees are amazing. They are committed to not only what they do but to this city and this organization, and they provide a great service,” Haverlah said. “They provide it so well and so great that it is very easy for some of them to have moved on to do less than what they did here and be paid more than what they did here, and right now that differential in pay is great between the city of Copperas Cove and other organizations.”
Some operators from the Public Works Department have gone on to leave the city of Copperas Cove to go work for another organization and make $3 to $5 hourly pay increase.
Solid Waste fund deficit = Solid Waste collection fee going up?
The Solid Waste Fund has a $600,000 deficit, and the recommendation for this would be to implement a fee change for Solid Waste services only, in the amount of an additional 10 percent or approximately $2 per month for residential customers.
The current solid waste fee per month is $19.83, which covers weekly garbage pickup and recycling/brush/bulk pickup every other week, as well as the ability for residents to go to the transfer station anytime to drop off recyclable materials without cost.
Council members gave consensus for staff to continue moving forward with these recommendations in the budget process.
“I think that the work that Ryan and the staff has done to bring down the deficit with the General Fund and Solid Waste Fund is awesome,” said Councilmember Fred Chavez. “I think it’s going in the right direction. It seems that the thought process was continuing to keep up services, not deleting services, but finding a way to provide those services at a good price and trying to get our budget balanced, so I like what I’m seeing. I’m all for this.”