City of Longview budget plan includes utility hikes, pay raises
By Jimmy Isaac firstname.lastname@example.org
July 28, 2011 at 11 p.m.
City Manager David Willard proposed a $149.8 million municipal budget Thursday that includes rate hikes up to 25 percent for some Longview utility customers, 3 percent pay raises for employees and an already approved voter-approved tax rate increase.
The rate hikes could mean average monthly water bills would rise between 3 percent and 8 percent per customer.
Willard is proposing no maintenance tax or sanitation rate increase. Increased property values that are up 1.77 percent across the city coupled with more sales tax revenue could mean an additional $800,000 in city coffers.
The proposal represents a 2.7 percent, or $3.9 million, spending increase from the current year. About one-fourth of the increase is attributed to higher debt service payments after voters approved a $52.6 million streets bond package in May that will increase taxpayers' debt rate by 0.0169.
"In preparing this budget proposal for you, we have kept the following goals in mind: budget conservatively, remain fiscally responsible, reduce costs through the budget when possible, and continue to provide quality services to the citizens, especially in the core areas of public safety and public works, while not raising taxes," Willard told council members.
The council could adopt the budget as early as Aug. 25, when a public hearing on Willard's proposal will be held at 5:30 p.m. at City Hall, 300 W. Cotton St.
Longview utility rates for its more than 30,000 customers had remained unchanged between 2007 and 2010. This past year, however, the city raised rates for customers with 5/8-inch and 1-inch water meters.
This year, Willard wants to keep starting rates for 5/8-inch customers unchanged. For other customers, it is a different story. Increases range from nearly $5 a month for 1-inch meters - common in most new homes - to $140 for 8-inch customers.
While the rate increases amount to between 22 percent and 26 percent, average monthly bills will increase between $1 and $25, or about 3.5 percent to 7.5 percent.
If the rate increases are approved, the city would meet its predicted $30.46 million in water and wastewater expenses for a fund balance of $4.9 million and the city's policy of having a 15 percent fund balance in the water and wastewater fund, Willard said. The city's ratio of debt repayment also would remain stable.
The fund is expected to end the fiscal year Sept. 1 with $6.4 million in its balance, or 21.54 percent of 2011 expenses.
General fund breakdown
Sales and property taxes each account for at least one-third of city revenue. The city expects about $395,000 more in property tax revenue thanks to increased values of 1.77 percent from appraisal districts in Gregg and Harrison counties. Willard projects $405,000 more in sales tax revenue from this year's expected haul of $20.3 million.
Other revenues include franchise taxes ($5.8 million); interfund transfers ($3.9 million); service charges ($3.4 million); fees and fines ($3.3 million); and miscellaneous sources ($2.4 million), for a grand total of about $58.69 million in general fund revenue.
The general fund will pay $17.1 million to fire, $17 million to police; nearly $6.9 million to general government; $5.9 million to parks and recreation; $4.56 million to streets and traffic; $2.2 million to public safety communications; $1.8 million to administration; $1.7 million to interfund transfers and $1.5 million to library services.
Total general fund expenses are expected to reach $58.69 million, not including one-time expenses and a lease purchase of a new fire engine. It would leave an ending fund balance of $11.96 million, or 20.4 percent of the budget. If the council agrees to all one-time expenses valued at $942,382, it would leave a $11.02 million fund balance, or 18.8 percent of general fund expenses.
If approved, Longview municipal employees would see their first across-the-board, cost-of-living wage increase since October 2008. Through 2009 and early 2010, wages were adjusted after a $120,000 independent salary study designed to make Longview salaries more competitive with other public-sector workers.
Willard settled for asking for 3 percent raises, though he considered asking for raises of 5 percent. He noted that Gregg County is proposing 3 percent raises plus 2 percent merit raises for its employees.
"We could not fit that into this budget," he told council members. "Hopefully, our numbers will continue to be positive, and we reserve the right to come back and ask for that later in the year."
The city is looking at "significant savings" in how much it pays municipal retirees, Willard said. The Texas Municipal Retirement System restructured its plan in this past legislative session, decreasing its 2012 budget rate to 12.07 percent, down from 14.57 percent.
Capital, other expenses
Willard expects to have at least $11.52 million in reserves by Sept. 30, 2012. That amounts to between two months and three months of operating expenses.
He also left City Council members with options for buying a new fire engine. Members must decide whether to lease an engine at $97,770 annually over six years, or pay $500,000 upfront and save about $86,600 in interest.
Large vehicles such as fire engines and some tractors are not included in the city's vehicle replacement program. The engine would provide front-line service for at least 10 years for Fire Station No. 6 on McCann Road, considered the busiest in town, Chief J.P. Steelman said.
Willard's budget includes eight one-time capital expenses totaling $442,382. They include a $65,000 liner for the Longview Swim Center swimming pool; $105,000 for lighting in downtown parking lots on Cotton Street; $27,000 for Internet bandwidth improvements; $56,000 to upgrade the city's warning sirens; $100,000 for a City Works software conversion; and, $26,125 for a geographic information systems server.