Council talks spending, tax rate increase



Following two weeks of budget talks focused on holding the line on the current 50-cent tax rate, or even considering a rate decrease, the Liberty Hill City Council considered adding expenditures that could mean setting next year’s rate at the rollback number of $0.548964 – a nearly 5-cent increase – as well as potentially taking money from reserves to cover more costs.

The talk centered on how the Council could fund all department head requests, specifically the three additional positions sought for the Police Department by Chief Maverick Campbell.

Council Member Liz Rundzieher questioned why the proposed budget didn’t include requests from City Hall for additional staffing.

That prompted a discussion of the tax rate, reserve funds and where the money comes from to cover the budget.

“We’re already underwriting a major portion of our budget based on one-time fees and that’s not good,” City Administrator Greg Boatright said. “You don’t ever take cash-ending balance to underwrite employees, because what are you going to do next year?”

While growth is strong, the size of the city means high-percentage growth is still not a huge windfall. Currently, a one-cent increase in property tax brings in only $25,000 for the city.

“We’re growing at a 15 to 18 percent rate on our ad valorem, but it is still so small, it is still only $750,000 to $780,000 in taxes,” Boatright said. “We’re not operating on a fixed budget. Our fixed budget is property tax and sales tax.”

He added that a sizable portion of the budget is underwritten by one-time fees, including building permits, which have resulted in more than $1 million in revenue so far this year. But those one-time fees are not how personnel costs should be covered if the city can help it, he added.

Still, Rundzieher was questioning why department requests could not be met.

“I don’t understand why we ask department heads what they need, and then tell them no,” she said.

Boatright responded that it was the staff’s responsibility to consider and weigh those requests and identify what has changed that might justify such a significant change.

Mayor Rick Hall said changes in the budget, with reductions in some areas, could cut down on the monies needed from reserves to cover the new positions. It would not eliminate the need to pull some funds from reserves. Chief Financial Officer Michel Sorrell said that remained an issue when using those funds for recurring costs.

Hall likened the situation to beginning a capital project before a financial downturn.

“You could use the same devil’s advocate on some of these capital projects, too,” he said. “If the economy goes bad, you don’t have the money, so are you going to start the project then stop it? We’ll figure out a way somehow to fund it.”

Hall added that he believed the city could meet the requests of department heads by only drawing from reserves and not increasing the tax rate.

Increasing the rate to the rollback rate would only net the city about $100,000 in revenue.

Even with the increased tax rate, the city would have to dip into its reserves for $87,000 to cover the shortfall between revenue and expenditures. If the Council keeps the current 50-cent rate, the increased expenses would mean drawing $209,000 from reserves.

Currently, the city has $2.5 million in reserves, but Boatright has said he’d like to keep one year’s operating expense in reserve, which would be about $2.7 million.

Adopting the rollback rate would mean the annual property tax on a home valued at $300,000 would be $1,646, an increase of $146 over the current year rate.

Council members Ron Rhea and Troy Whitehead did not weigh in Monday on the idea of adopting the rollback rate. Council Member Wendell McCleod said he opposes funding any new positions, and McCleod, along with Council Member Liz Branigan has said previously they hoped to provide a tax-rate reduction in the upcoming budget.

The need explained
The three police department positions not recommended were a lieutenant, an investigator and a traffic officer.

Current staffing at the department includes six officers, two sergeants, a lieutenant and the chief.

“The patrol lieutenant position is to oversee all the patrol officers, versus having one lieutenant trying to do support services and oversee patrol officers at the same time,” Campbell said when asked Aug. 20 to explain the need for the new positions. “The other two positions I felt were more key than the lieutenant’s position, and that is the traffic officer and the investigator.”

To Campbell, the investigator position is most critical. He said it would have a positive impact on the department’s ability to close cases more efficiently.

“The investigator position to me is really key this budget cycle,” Campbell said. “If I was to prioritize them, the investigator is the big one. We’ve had several felony cases, in one of which a victim was beaten nearly to death, and that officer responded to that call, took that report, then went on his three days off, took an extra day of vacation and was off for four days. Monday morning, 12 witnesses came into the station, so myself, the lieutenant, and an officer who had to be pulled off the road took witness statements.”

The investigator would also serve as the evidence custodian, making that work more efficient and organized as well.

“(Not having the investigator) eventually leads to frustration by the victims of these crimes, because they’re dealing with multiple people and not just one investigator or detective. It also leads to missed evidence, miscommunication and the inability to prosecute criminal cases properly because there’s too many hands in the basket of the case.”

When asked about the number of unresolved cases the department had and what types they were, Campbell said they average 40-45 unresolved cases annually and most are misdemeanors.

Boatright has said he supports filling equipment needs as they arise, but will not add new positions for the department at this time. Hall has said he wants to hear all of the requests before deciding on what his preference is for the final budget.

SRO program out
The Council discussed the situation with the stalled efforts to establish a School Resource Officer (SRO) program through an agreement with Liberty Hill ISD.

With no feedback from the school district, and no discussions planned on finalizing the program, the Council decided to pull the item from the budget.

Sorrell pointed out it could always be handled through a budget amendment later if an agreement is reached.

The Council agreed it supported funding the program, but that it could not plan for it without more information.

The school district has not discussed the issue publicly since initially deciding to set aside funding for security in its preliminary budget discussions in May. The LHISD budget adopted Aug. 20 still contains funds for a law enforcement presence, but the budget does not identify how or if they will be used.

“The ball is in their court,” Rhea said of the school district in addressing the future of the SRO program.

Maintenance questions
After Hall said he wanted to weigh the benefits of hiring two full-time maintenance techs for the city rather than contract those services out, staff dug into the issue to provide some numbers for comparison.

A proposal provided to Sorrell by Giraffe Services, which currently has the maintenance contract with the city, showed that basic services through the company could show some savings over new staffing.

“I asked them to put together, based on very generic, nothing specialized, just janitorial, landscaping and building maintenance, an estimate for us,” Sorrell said. “The current rate that they gave is about $18,000 lower than the two maintenance tech positions with just the vehicle, phones and fuel.”

She added that there were other values in contracting that work that don’t show up in the contract.

“Sometimes we take for granted what they actually cover,” she said. “They put fuel in their vehicle, they put fuel in their equipment, if something breaks they fix it at no cost to us. There are things they absorb we take for granted.”

A basic budget of what the addition of two maintenance techs would cost the city was presented Aug. 20 and included staffing costs and equipment. The projection was a first-year number of about $170,000 including salaries at $15 per hour each and $80,000 in pest-control equipment, lawn-mowing equipment, safety gear, a vehicle, trailer and fuel. The number was trimmed down to eliminate most of the equipment costs.

Hall said having two new city employees could save the city money and also provide two extra employees at times they were not busy with primary tasks such as landscaping, janitorial work and general maintenance.

Rhea did voice concern Aug. 20 about finding qualified staff to handle the wide variety of work – some of which requires certifications – for $15 per hour, and keeping them on staff.

The current agreement with Giraffe Enterprises is for about $125,000 this year, and is for building maintenance, landscaping and grounds, citywide cleanup, code enforcement property cleanup and special events. For this fiscal year, Giraffe has maintained all city buildings, provided the landscaping and mowing for facilities, including replacing a poorly installed sprinkler system at City Hall. They also remodeled the City Council Chamber including building the dais. Giraffe Enterprises worked the Independence Day event and put up and took down Christmas decorations for the Christmas Festival at Lions Foundation Park.

About $32,000 of what was spent with Giraffe Enterprises was related to capital projects, which has now been rolled into the bids for those projects going forward.