The city’s $1.5 billion budget for fiscal year 2015, which includes an across-the-board raise for general employees and boosts city services by adding new positions, reflects the region’s strengthening economy.
“I get to present a budget, which compared to prior years is in good shape by most measures, and perhaps has less drama,” new City Manager David Cooke said. “We have a strong local economy, and revenues are improving.”
Even so, increases are proposed for water and sewer rates, as well as some other higher fees for city services.
Though the initial budget estimates projected a $26 million shortfall, the budget presented to council members Tuesday was balanced by using a one-time savings of $1.9 million from excess fund balance, $5.1 million in general fund cuts and because revenue exceeded initial projections.
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Budget documents show that an uptick in revenue, both in sales tax and property taxes, gave the 2015 budget a big boost.
“We will have the highest sales tax collections in next year’s budget that the city has seen in its history,” Cooke said, also pointing to a steady increase in property values and an increase in building permits, both residential and commercial, predicted for 2015.
Sales tax collection projections for 2014 are expected to exceed expectations by $3.8 million, or 3.2 percent; and they are up 6.3 percent over the same period as last year, which puts Fort Worth’s sales tax performance ahead of Houston, Dallas and El Paso. Sales tax projections for 2015 are up 4.2 percent over the budgeted collections for 2014.
Property values have also soared in the area, with the city expecting to collect $15.6 million more in property tax revenue for the general fund than budgeted in 2014, an increase of 5.3 percent. Another portion of the property taxes, $80.6 million in 2015, will go to pay debt service.
The property tax rate is expected to stay the same, 85.5 cents per $100 of assessed value, which is $1,282.50 for a home appraised at $150,000 for tax purposes.
Still, Mayor Betsy Price said it is important to stay cautious and maintain sustainable cuts.
“We all know this has to maintain as a sustainable budget. We have made cuts that have to stay in place. … It is always easier to hold the line than cut if times change on us,” Price said.
Starting in fiscal year 2010, the city made several significant cuts, including closing the Day Labor Center, reducing city mowing, closing city swimming pools, laying off employees and giving furloughs.
The city has also been reliant on excess fund balance to close budget shortfalls since fiscal year 2011, when the budget used $9 million from the savings. In 2012, that jumped to $24 million, and the use of savings peaked in fiscal year 2013 at $41 million.
Cooke said the goal is get back to pre-recession times, when the city was adding to the fund balance as opposed to drawing from it.
“Green is better than red,” Cooke said, garnering laughs from council members.
“We are working our way back there, with the current year budget minimizing the use of fund balance.”
Next year’s budget added 35 positions over fiscal year 2014, since city officials fielded complaints about city services, especially departments like code compliance. The city cut 512 positions between fiscal year 2010 and fiscal year 2014.
The budget 2015 does cut 16.5 total positions, including 5.5 in Municipal Courts, five in libraries and three in the city attorney’s office.
The new positions include adding five employees for planning and development to enhance customer service; five more positions for maintenance for parks and community services; and four positions in code compliance.
“It adds positions to address increases in development activity and to address some of the service concerns that we have heard,” Cooke said.
City employees are also getting their first raise — a 4 percent across-the board raise — since fiscal year 2012, and another increase of 1 percent in payroll to address specific jobs with recruitment and retention challenges.
Police and fire employees who receive raises under the city’s labor contracts, employees who are already at the top of their pay ranges and the newly hired city manager will not receive the 4 percent raise.
The City Council approved the pay increases Tuesday night, to go into effect Aug. 23.
Water rates to increase
The $402.2 million budget for the water department includes an average water rate increase of 7.4 percent, and 4.9 percent for wastewater, but that average is for the entire system, which includes residential, commercial and industrial customers.
The specific rate increases by the type of customer and by volume of consumption will not be released until the first budget workshop scheduled for Aug. 21, said Mary Gugliuzza, spokeswoman for the water department.
“What we will reveal on the 21st will be the breakdown … and what the impact will be to a typical resident’s bill,” she said.
Water rates for typical residential users increased 5 percent in fiscal year 2014, and sewer rates rose by 4 percent.
The department announced proposed rate increases last week, citing in large part the rapidly rising costs of raw water from the Tarrant Regional Water District. In 2014, the cost to buy raw water from the district went up 9.5 percent. It is expected to increase 12 percent more in 2015, and the city expects the cost of its raw water to nearly double in 10 years.
Because of conservation efforts, the water department is planning to cut the amount of water it buys from the district by about 3.5 billion gallons, which will help keep rates lower.
The water budget is expected to increase from $235 million in 2014 to $243 million in 2015, a 3.44 percent increase. The sewer budget is expected to increase 5.11 percent, from $150 million to $158 million.
Other city fees would increase in parks, code compliance, police and planning and development for a total of $1.9 million in increased revenue.
The parks and community services budget shows increases because of the additional positions, and also to demolish the city’s five public pools closed in 2009 — Como, Hillside, Kellis, Sylvania and Sycamore.
“Those five pools are all beyond repair. They have far exceeded their useful life, there would be a significant capital investment required, and you would still have a pool that was designed in the ’30sand ’50s that doesn’t meet today’s public expectations,” said Richard Zavala, parks and community services director.
The city is also proposing to decrease the Comin’ up Gang Intervention Program by 50 percent, a reduction of $429,000.
Some of the common fees users pay at parks could also increase as part of the fiscal 2015 budget. The purpose of the increase is to “recoup a portion of the cost associated with a particular activity,” Cooke told council members in an informal report.
Raising the costs to reserve parks, community center rooms and athletic fields and increasing the price of summer day camps and the cost of community center identification cards will create an additional $654,305 for the general fund.
Under the proposal, renting a small meeting room at a community center will increase from $25 to $35 an hour, and renting a large room will increase from $60 to $75 an hour.
Renting a baseball or softball field with lights will increase from $15 to $30 an hour. For children, community center ID cards will increase from $10 to $20 annually, and the price would go from $20 to $30 annually for adults.
Police, fire departments
The fire budget showed a 2.1 percent decrease, not because of staffing reductions, but because the city and its firefighters have not hashed out details of their labor contract that expires Sept. 30.
If a new contract is not ironed out by then, the city will be forced to revert to the state’s civil service rules, which won’t recognize local contract perks like longevity pay, and the city won’t be able to give pay increases, said Susan Alanis, assistant city manager.
The two sides met again Tuesday morning and discussed several sticking points in the contract, including city-proposed cuts to pension benefits, healthcare benefits and changes to maintenance standards.
“I think at this point the pressure is on, so the city is going to be prepared to meet as often as is productive,” Alanis said.
A lawsuit filed in January by the Fort Worth Fire Fighters Association against the city over the failed negotiations is pending in the 2nd Court of Appeals, after the state district court refused to enforce the firefighters’ contract. A second claim, that the city did not negotiate in good faith, is pending in state district court.
“I would not say that we reached a conclusion on any of the outstanding issues, however, we are pleased that the dialogue is ongoing,” Alanis added.
There are no new police officer positions authorized in the budget, despite concerns about response times, especially in the far north areas of Fort Worth. Councilman Dennis Shingleton, who represents the far north, said he will ask staff for a long-term plan on how to get more officers and improve response times.
“It is the primary concern of people north of Loop 820 — police presence,” Shingleton said.
Last year, the council eliminated 46 police positions to get the department to zero vacancies, and Police Chief Jeff Halstead said it will be difficult to fill vacant positions faster than normal attrition until the new police training facility opens in February.
Halstead plans to ask the council for 10 more police officers in the 2015 budget.
After a series of public meetings, the budget is scheduled to be approved Sept. 16. It must be approved by Sept. 30 and take effect Oct. 1.