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Revenue loss may flatten city budget

By Sherry Koonce skoonce@news-journal.com
June 24, 2012 at 11 p.m.

Faced with a projected $1 million decline in property values, city officials developing the 2012-13 budget say they are prepared to hold the line on spending.

Preliminary appraised values for property inside Longview city limits, which includes portions of Gregg and Harrison counties, indicate city revenue will be down because of an approximate 4 percent decrease in mineral values, said City Manager David Willard.

Though that figure could change when certified appraised values are released by the Gregg County Appraisal District in late July, Willard said the city will proceed as if there will be no change in the projected decline.

"Right now, we are working toward a balanced budget that will be very flat," he said. "We are waiting on the revenue numbers and trying to be conservative."

This past week, Willard and department heads began preliminary steps in the budget-making process. All departments were asked to plan for next year's budget with no change from the current year.

Willard said the city is not expecting a tax rate increase above the past year's 50.09 cents, but will have to be conservative in spending to maintain the same level of services for residents.

That could mean no employee pay raises and little room for capital improvements.

City employees received a 3 percent across-the-board pay raise this past year, their first in four years.

Willard said it was too early to say for sure whether the new budget would include raises.

He hopes to have a budget proposalready to present to the City Council by July 26, with adoption by the end of August. The city has until Sept. 30 to adopt a budget and tax rate for the new fiscal year, which begins Oct. 1.

On the plus side, the city expects to end this year with $9.5 million general fund surplus.

This year's budget will include funding for the $52.6 million streets program voteres approved in 2011. The cost of the streets program is staggered over the next five years.

Willard also said it was too soon to determine whether there will be an increase in water and sewer rates.

"A lot is based on rainfall, or lack of it," he said. We are coming into the dry part of the summer, so we have to wait until the last part of summer before we know."

Typically, water revenie spikes if June and July are drier than average.

If mid-year projections hold, the city's water utilities fund will end the fiscal year with a $6.2 million fund balance.

No new vehicle purchases or added employee positions in police or fire departments are anticipated. This past year, the fire department received a new fire truck, purchased through the fleet replacement fund.

Willard said he does not expect much change in the amount of sales tax revenue projected for the 2012-13 budget year. According to its mid-year budget forecast, the city will garner $20.3 million from sales tax revenue.



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