Fort Worth frees up $13.7 million in budget

The city has freed up $13.7 million in the current budget, but the money won’t go toward a new police patrol division, more code compliance officers or road repairs, as some council members had hoped.

Instead, Aaron Bovos, Fort Worth’s chief financial officer, proposed during Tuesday’s pre-council meeting that the city spend $8 million to offset the use of savings in the 2015 budget.

The rest — $5.7 million — would be transferred to the workers’ compensation insurance fund, which is $17.1 million in the hole.

Councilman Dennis Shingleton said the city has so many needs that he favors spending the money now. He listed storm-water and road needs as examples of a “burgeoning community that I just can’t get my arms around.”

Mayor Betsy Price, however, said the city needs to clean up the other funds first.

“Then we are on the track that we really, totally, have got the cash and we will know exactly how much money we have every year to spend, without dipping down into other reserves or begging Peter to pay Paul,” Price said.

The $13.7 million was freed up after the staff recommended that the city stop making annual payments to a trust fund created in 2009 to pay for future retiree health benefits. Critics have said the plan is a double burden on today’s taxpayers: Besides the annual trust payments, current retiree health claims are paid out of the budget.

The trust fund is set to receive $10.5 million from the general fund in the 2015 budget and the rest of the payment from several other city funds, such as water and sewer. The 2015 payment to the trust — called the Other Post-Employment Benefits Strategy — could be made from the city’s excess healthcare fund balance, Assistant City Manager Susan Alanis said.

The balance in the healthcare account is $37.1 million, but a proposed policy change on how much money to keep in savings would reduce that to $9.4 million to $18.9 million, freeing up enough money to make the 2015 trust payment. The policy change would also move excess money from the healthcare fund to the trust annually.

Annual payments to the trust from the general fund and other city funds would be stopped.

The trust, which has accumulated a balance of $57.5 million, is not scheduled to start paying out until 2029. It was created to help the city cope with rising healthcare costs by generating investment earnings and to reflect the unfunded liability of future retiree benefits.

But healthcare costs are starting to decline after several city initiatives to lower them — like a near-site clinic, a medical concierge and a consumer-driven health plan — have started to yield results, Alanis said.

This story was originally published April 21, 2015 at 8:28 PM with the headline "Fort Worth frees up $13.7 million in budget."