City budget picture publicly unclear
By MIKE EDDLEMAN
Only weeks away from presenting a draft budget for the upcoming 2020-2021 fiscal year, the current City of Liberty Hill budget status is a public mystery.
Based on a partial monthly revenue and expense report obtained by The Independent, and answers to questions submitted to the City to address certain items, Liberty Hill appears to have actual expenses and encumbered funds totaling $3.848 million in its General Fund through six months of the fiscal year, on an original budget of $4.237 million.
Requests for monthly financial reports have been submitted to the City and questions asked to help clarify and add context to the numbers, but so far, the City’s response has been general in nature.
The City claimed in a preemptive Facebook post Tuesday directed at this story that “while some line items within certain categories are over the budgeted amount, the bottom line of the General Fund budget for the City of Liberty Hill has adequate funds for the remainder of the budget.”
As can be expected with any budget, many line items are above budgeted expenses and others are below. But with so many moving parts, there are many questions.
What about revenues?
While there is information on expenses in the March 31 Revenue and Expense Report the newspaper obtained, there is no revenue information.
The current budget passed in September 2019 projected tax revenues – primarily from property and sales taxes – of $1.883 million. Franchise fees and permit revenues were projected at $1.65 million. With those and other miscellaneous revenues, the projected total revenue for the General Fund was $4.227 million.
According to the City response to the question on revenues, the General Fund has brought in $4.789 million this fiscal year. Total General Fund revenue for last fiscal year was somewhere over $4.5 million, but no final totals were made available. The Independent did ask if that number was actual revenues through six months or projected annual revenues, but did not receive a response by press time Wednesday.
The Independent asked for revenues by specific categories, which would outline specific numbers for fees, permits, property taxes and others, but that information has not been provided.
It is also unclear if those revenue numbers include the $1.6 million the Council decided in the last budget to shift from reserves into the General Fund. The City had $2.7 million in reserve prior to the current budget, but voted to only keep a four-month reserve in the fund, which was projected at about $1.06 million.
Chief Operating Officer Lacie Hale reported that the other funds – Streets, Wastewater, Sewer, and Water – had brought in $6.841 million in revenue to date.
Salaries and staffing?
Salary expenses are spread across a number of funds including the General Fund, Wastewater, Sewer and Water. The budget total for salaries was $3.189 million for all positions in the City, which also included the police department and all public works employees. The approved budget was to add 18 new positions to last year’s staff of 37.
Based on a recent employee list, there are 48 employees for a total salary expense of $2.884 million. The list did include senior planner Sally McFeron and building inspector Jonny Ubelhor – both of whom were terminated last week – but those two positions are likely to be filled with new hires.
Since the budget was approved, the Council has added an IT Director position in December ($114,400), a City Attorney ($160,000) in April to replace the contracted services of the Bojorquez Law Firm, and a Chief Operating Officer in March ($91,000) in place of hiring a new City Administrator.
Through six months of the fiscal year, the current amount spent on salaries is $1.12 million. The savings to date comes from not having a City Administrator, the Project Manager position not being filled, and currently no pay increase in place for the Mayor and salaries for the City Council, according to Hale.
Attention-grabbing line items
One area where certain budget line items appear to be over budget through six months are in contractual services.
The City has spent $79,110 in consulting fees to date on an annual budgeted amount of $70,000. According to Hale, those fees have been for services provided by Buie & Associates, Langford & Associates, eight months of IT Consulting, Powell Strategic, Bond Arbitrage, Jim Franklin, and Andy Barrett & Associates.
The Council voted early to end a contract that expired in September 2019 with Diversified Planning, in what was suggested as a way to bring more things in-house for the City. But both Buie & Associates as well as Powell Strategic were later contracted to provide services for the City.
Under both the “engineering” and “other” line items, the City has spent just over $52,000 on a combined budget of $20,000 for the fiscal year. Hale said those expenses were for “Invoices from Steger & Bizzell for subdivision reviews, map updates, and engineering realignment of Liberty Parke entry road.”
Under attorney and legal fees, Liberty Hill has spent only $5,866 of a $100,000 budget, and has seen below-budget spending in a number of other areas. It is unclear if these are areas that will show eventual savings or are expenses that may come later in the fiscal year.
Overall, with all line items combined, contractual services is at 53 percent of its budget through six months.
Under maintenance, something Mayor Rick Hall fought to bring in-house that had been previously contracted, has already spent $15,742 on a budget of $13,000. The savings is not what was anticipated when it was budgeted, and there were no maintenance expenses associated with the Independence Day Spectacular due to its cancellation, but maintenance could still see a savings by year-end against the $45,000 spent in 2018-2019.
Police Department increases
The Council budgeted a sizable increase in the police department budget, raising the spending plan from $1.2 million to $1.7 million. Through six months, between actual expenses, and encumbered funds, the department has just over $1 million of that total, even with personnel expenses being below budget due to a lag in filling all new positions.
Four new full-time positions and one part-time were added when the budget was approved.
Salary expenses through six months sit at $512,761, compared to $785,000 last fiscal year.
Uniform expenses have been $17,000 on a $30,000 budget, compared to $5,000 spent the previous year. So far in total, contractual expenses in the department through six months have matched the previous-year amount of $97,000, while materials and supplies, and maintenance have also already nearly equaled the previous year’s expenditures.
It is unclear at this time where a number of new expenses during this fiscal year fit into the current budget.
Through a request for information, The Independent has learned that the City has spent $12,400 on logo items – including hats, shirts, jackets, mugs, totes and other items – since September 2019.
A new lighted sign was purchased for the wall behind the dais in the Municipal Court building for $2,825.
The City also spent funds on security devices and equipment for City Hall and the municipal court building, including a key card entry system, a number of cameras and other items. But to date, the City has not responded to the newspaper’s request for the information, or a subsequent letter from the Texas Attorney General (AG) compelling the City to provide the information.
The City had sought to withhold the information under an exception to the Open Records Act, but according to the AG did not provide justification needed for a ruling to withhold in a timely manner.
The City has been working on a number of downtown capital projects including some street rehabilitation, new parking and Wetzel Park.
The downtown parking lot had an estimated price tag last October of about $600,000, the new turn lanes at SH 29 and RM 1869 had a commitment of $300,000 from the City, and contributions will be needed on some local county road bond projects when they begin.
The purchase and installation of two new gateway signs has been approved at $76,000 – half of which is being funded by the Economic Development Corporation – and plans are in the works for improvements to the Loop 332, CR 279 intersection downtown with an estimated price tag of $858,081.
The City has also purchased the county barn near the intersection of Loop 332 and RM 1869 with the intent of converting the existing building into a community center at an estimated cost of $600,000.
The Council recently authorized Hall to negotiate with the Liberty Hill Development Foundation in an attempt to purchase Lions Foundation Park on Loop 332.
Money was earmarked last year for the City Park Swim Center that has yet to be bid out, and funds were available for other projects after the roundabout was scrapped last May.
There was a transfer this fiscal year of $1.69 million to capital projects, but it is unclear where those funds were spent specifically.
Hale’s response to the question of where the funds on the line item came from and what they were spent on was that the “General Fund paid for the Bond project before we got the bond. It is a journal entry to take the money and pay it back. Resolution for reimbursement, June/July 2019. It is due from Wastewater Bond to General Fund.”
It is unknown which of these projects will go forward this year and what remains to be paid in terms of capital projects as Hale said it is “unknown until more projects are awarded from now until end of fiscal year.”
Why no reports?
The City and The Independent remain at an impasse over detailed monthly reports to clarify revenue and expenses, with the City contending the report does not exist.
“There were no records responsive to the actual request made by The Independent. Your request was very specific,” Hale wrote in her response. “It was for the, ‘City of Liberty Hill Monthly Revenue and Expense Reports (audited or unaudited) from January 2019 to April 2020. These are the reports previously presented to Council as recently as 2018.’ This report does not exist, and the City has not been creating this report since the current Finance Director started with the City. Currently the City Council receives a monthly financial form and not the revenue and expense report that was previously presented by the former Finance Director.”