Employee pay raises, water and sewer rate increases and added money for streets and traffic signal improvements are highlights of a $152.1 proposed budget presented Thursday to Longview City Council members.
Council members got a first look at the initial 2012-2013 fiscal year budget during a presentation by City Manager David Willard.
To fund the balanced budget, city staff members proposed keeping the same tax rate of 50 cents per $100 valuation. The owner of a $100,000 home would pay $500 a year.
“Even with Longview’s economic stability, there is still the need to budget as conservatively as possible, and though we have seen increases in the cost of providing services, we understand that, as any business or family budget, we at the city must also balance our expenses with the available income, and that is the budget we are presenting to you tonight,” Willard said.
The city is expecting to receive $19.9 million from Gregg and Harrison County property taxes, a 2.5 percent increase from this past year’s revenue.
Another $19.9 million is budgeted for sales tax revenue, representing a 1 percent decrease from last year.
Willard said the estimated sales tax revenue is conservative, but keeps with flat sales tax revenue received the last couple of years.
Together, sales tax and property tax revenue make up about 66 percent of the city’s $60.3 million general fund revenue.
On the expense side, 57 percent of the $60.3 million will go toward public safety.
The proposed budget includes a 3 percent mid-year across-the-board pay raise for employees. Raises would not go into effect until April in order to ensure revenues come in as projected. This past year, city employees received a 3 percent pay raise.
The proposed budget sets aside $600,000 for streets programs. Willard said the added money would enhance the $52 million streets program passed by voters this past year.
If the funding is approved, streets to be repaired will be determined at a later date.
Also included in the budget is $155,000 for upgrades to the city’s aging traffic signals.
The upgrades will help synchronize signals to aid in traffic flow and improve the antiquated software system.
Whenever there is a storm, several of the city’s signal lights are prone to go out. New software should alleviate that problem, Willard said.
The proposed budget also includes $90,000 for salary, benefits and startup costs for an internal auditor. The position was cut in 2010 as a result of the weak economy. Willard said the position should pay for itself.
Also included in the budget is an increase in water and wastewater rates. If approved, the rate increase will be the third in as many years.
For the average customer using 7,000 gallons of water with a 5/8-inch meter, the bill would increase from $49.87 to $53.45 a month, a difference of $3.58.
Willard said the increase is necessary to offset many years when increased cost of supplying water was not passed on to customers.
In 2008, a cost of service and rate design study performed by RW Beck recommended the city raise water and sewer rates. Willard said the city chose to implement the rate increases incrementally, rather than all at once. This year likely will not be the last of those increases, he said.
The budget includes a fund balance of $8.7 million after $2.8 million and $1.3 million were set aside for other post employee benefits and firefighter pensions.
The budget also reflects a 55 percent decrease in financial services expenditures compared to the previous year’s budget. Finance Director Angela Coen attributed the decrease to previous year expenditures associated with the George Richey Road project and improvements to the rodeo arena. Those expenditures are not in the proposed fiscal year budget.
The city is looking at a 39.01 percent decrease in grants revenue, mainly in housing from federal grant programs.
“This budget has been figured conservatively with the anticipation we will be in for a tough time,” Mayor Jay Dean said. “We need to be in a needs mode, not a wants mode.”
A public hearing is set Aug. 23 to consider the tax rate. On Aug. 30, the council will meet in special session for a public hearing to adopt the budget. The tax rate is scheduled to be adopted Sept. 13.