Council anticipates shortfall, discusses revenue options

By SHELLY WILKISON

The City of Liberty Hill could come up $150,000 short when the payment comes due in 2013 on $8 million in bonds for sewer construction that were issued in 2007.

During a two and one-half hour budget workshop Tuesday, Mayor Jamie Williamson and Council member Vickie Brewer explained that the city council in 2007 committed the city to $8 million in sewer construction debt that was intended  to be repaid by requiring residential and commercial users to connect to the system. But five years later, connecting to the sewer system remains optional.

“We have options (to address the shortfall),” said Mayor Williamson. “We can do mandatory hookups, we can raise taxes, we can cut expenses to the bare minimum. But I can tell you, this is the worst run business I’ve seen in my life.”

Mrs. Williamson and Mrs. Brewer said they have been working day and night at City Hall along with a contracted bookkeeper to make sense of city financial records that Mrs. Brewer said appeared to follow “no formula. They juggled the numbers to fit the criteria.”

“They robbed Peter to pay Paul,” Mrs. Williamson said, adding that now it’s time for the debt to be paid. “They committed us to $8 million debt with no provision (to pay it back) that they were bold enough to go through with. Had they been bold enough then to stick with their guns and do mandatory hookups, there would be more money now.”

With the exception of Councilman Sammy Pruett, who was not present Tuesday, elected officials moved through budget requests for the police department and Municipal Court, reviewed the cash on hand in all of the city’s accounts and discussed projected needs and salaries.

Mrs. Brewer said she thought it was important for Liberty Hill to maintain its small city taxing designation by keeping the property tax rate below $0.50 per $100 valuation. The City’s current tax rate is $0.44. She said if the Council chooses to increase taxes to find the revenue to pay down the debt and meet other needs, the tax rate required could be as high as $0.53.

If the City has a tax rate above $0.50, it moves into a different level that requires addtional public hearings and  advertising, Mrs. Williamson said.

“We don’t want to raise taxes,” said Mrs. Brewer. “We need to find a way to find an additional $150,000 in the budget by next year.”

“We will just have to cut back. It’s as simple as that,” said Councilman Wendell McLeod.

The Mayor and Mrs. Brewer presented the “bad news” after an extensive discussion on projected expenses for salaries, debt service, and projected revenues from property taxes, sales tax, water and wastewater fees.

Mrs. Williamson explained that certified appraised values of property within city boundaries is down $3 million from last year, “which means we have less to work with.”

She said average revenues from sales tax are about $25,689 per month, adding that they are “holding their breath” on the final payments for the current fiscal year.

Since the City took over the water system last year, it collects funds from water bills each month. Mrs. Williamson said two new water wells currently under construction not come online fast enough this summer to ease outdoor watering restrictions so that customers will spend more money on water.

She said the City needs the revenue from water customers, but all outdoor watering has been prohibited since spring because there is not enough supply.

“Water revenues are down because we are on watering restrictions,” she said.

McLeod, former general manager of the Liberty Hill Water Supply Corp. before it was taken over by the City, said 440 customers use 10,000 gallons of water or less each month.

Mrs. Williamson said there is still some question as to the City’s expenditures in the coming fiscal year on the wastewater system and treatment plant.

However, a billing system put in place recently has allowed the city to start collecting revenue from wholesale and retail customers of the wastewater treatment plant.

Mrs. Brewer said Maryann McLeod, the city’s water utility clerk and Councilman McLeod’s wife, deserves much of the credit. A short time later when the Council was discussing employee salaries, Mrs. Brewer suggested the utility billing clerk — Mrs. McLeod — receive a 3 percent pay raise because she is now handling billing for wastewater service in addition to water.

The City will spend about $36,400 on bookkeeping services. At the rate of $35 per hour, a private company will provide the service that was previously part of the job duties of the Deputy City Secretary who resigned last month. The City is also seeking to hire a receptionist.

On the wish list of the police department was adoption of a pay scale for officers that would include a 3 percent pay raise every year on the anniversary of the officer’s hiring date. The pay scale would not apply to Chief Randy Williams, who is paid in accordance with a contract for employment.

Williams said Liberty Hill police officers are paid less than officers in neighboring agencies, which makes it difficult to retain those with experience. Liberty Hill’s starting pay is $29,400.

“At least with this, they know what to look forward to,” he said. “In the past, they haven’t even gotten the 3 percent (pay increase). It’s hard on morale.”

Williams said it is not just the size of the city that should be considered when setting officer pay. In smaller towns, officers respond to calls, work traffic, conduct investigations, file their own cases and do their own paperwork.

“Our officers work harder than Leander and Cedar Park because we do everything. It (the job) is actually harder in a small town because we do it all,” he said.

He said the department will not provide  24-hour coverage with only four full-time officers (including him) and one part-time officer.

After the recent resignation of one experienced officer, the Council authorized Williams to advertise for a replacement.

Some police expenses will drop this year as the balance on two patrol car leases are paid.

Municipal Court revenues are also down, Mrs. Williamson said. She said the City has thousands of dollars in outstanding  warrants, and the Court is requesting $10,000 to pay a part-time warrant officer.

“If he brings in $30,000 of the $300,000 owed,” that will help, Mrs. Williamson said.

The street maintenance fund, which receives revenue from 1/4 cent sales tax, has a balance of $446,000, said Mrs. Brewer.

“We do have the money to do repairs (on city streets),” she said.

“There is revenue there, but we need to make sure we’re not (spending it) on roads where sewer (contractors are expected to do) repairs,” added Mrs. Williamson.

City revenues also show about $192,000 from a Williamson County grant for improvements at City Park on CR 200. This year, a playscape was purchased for the park using county grant funds, and the remainder is to be spent on construction of a restroom facility and pavilion.

Mrs. Brewer and Mrs. Williamson agreed that the City should stop spending money to mow Lions Foundation Park when the property does not belong to the City.

Mrs. Williamson said she has spoken with the President of the Foundation Park Board and was informed that there is no agreement in writing for the City to mow the park.

“If we are paying to mow it, the City ought to own it,” Mrs. Brewer said. “I’m not keen on us paying someone to do it.”

“We’re not putting money out at City Park (for mowing) and we require the associations (Liberty Hill Youth Soccer and Liberty Hill Youth Football & Cheer) to pay their own utilities,” added Mrs. Williamson.

Mrs. Brewer said if the City continues mowing at Foundation Park, the task should be absorbed by the City’s utility department.

While Mrs. Brewer noted Tuesday evening that her goal was to bring transparency to city government, The Independent’s request to see budget documents that were presented to the Council was denied.

“This is part of the transparency we want to bring forward,” Mrs. Brewer said. “There has been so much distrust from City Hall to the public, and it’s time to end that.”

The Mayor said spreadsheets and other documents would not be provided because they were “working documents” and numbers will change. She collected the documents from other elected officials and city staff as the meeting adjourned.

While reporters received such information during budget workshops under previous administrations, Mrs. Williamson said she would not release the information. She said she believed prior councils had more substantitve numbers when they released the information at their first budget workshops.

After the meeting, she said meeting the city’s needs and paying its debt will be a challenge.

“We are looking at all of the options,” she said. “As a group today, they know now where we stand and that we will do our due diligance.”

The Council will hold another budget workshop in the coming weeks. No votes may be taken in the workshop setting.

The Council must adopt a budget and set a tax rate in September. The new fiscal year begins Oct. 1.