Denton city council members pressed for more information on paying for street repairs and on the five-year forecast — which includes a 1-cent property tax rate increase in 2014 — during a workshop session Tuesday afternoon.
City leaders spent about 45 minutes in preliminary talks over the 2013-14 budget, which the staff estimates should see growth in both property and sales tax revenue. Utility fund projections include rate increases for water, wastewater and electric customers. On the expense side, the preliminary budget also shows step increases for certain city employees and 3 percent merit increases and equity pay adjustments for others.
The five-year forecast shows the city spending down the reserve fund balance about $2 million per year in order to meet some program demands. That would diminish the balance from about 23.5 percent of expenditures in 2013-14 to 13.2 percent of expenditures in 2017-18, city records show.
The council learned that, despite much higher levels of spending on reconstructing city streets, the work is not keeping pace.
Chuck Springer, the city’s director of finance, presented a plan to gradually increase spending on street reconstruction so that by 2017, the city would be spending the $10 million a year needed to prevent any further deterioration of the city’s street quality rating.
“So this isn’t improving the situation, it’s just not going the other way?” council member Kevin Roden asked.
He and council member James King asked for a workshop on the topic to discuss the matter further.
King said he would like to see street reconstruction become a part of the annual budget within the next several years.
“Otherwise, part of the budget is paying to retire the debt,” King said.
Sobering reports from 2010 and 2011 told the council what many residents have long complained about: Nearly 1,000 street segments had failed or were failing, necessitating $96 million in repairs. A consulting group told the city it would need to spend $10 million annually to keep up.
In addition to a successful $20.4 million bond election in November, which brought $4 million per year for the next five years, city leaders have cobbled together funding from a variety of sources — next year, they propose adding any growth in franchise fees to the street fund — to get the work done.
To reach a $10 million annual street reconstruction budget before 2017, the city would have to double what it’s sending from the general fund now, Springer said.
City Manager George Campbell said that decision could have political implications, agreeing to a workshop discussion.
The budget also includes “supplemental spending” packages of about $1 million per year for the next five years to address some of the $7 million in projects proposed from various city departments.
Some of the additional spending, if approved, could come from council-initiated requests, including an administrative position for the mayor and council, the restoration of council contingency funds, more bike lanes, a master public arts plan, new investments in downtown and other economic development measures.
Utility customers should expect higher bills next year as all of the city’s utility departments are planning rate increases. Water customers will likely see a 4 percent rate increase and sewer customers a 9 percent increase. The trash and recycling bill will increase by 3 percent for customers with standard carts and by 5.3 percent for those with large carts. The electric bill will increase with a base rate hike of 2.5 percent next year and for the next four years until the city raises enough to retire its portion of the Texas Municipal Power Authority debt.
Roden asked for a report on how the increases would affect the average ratepayer, which Springer said the council could expect before the formal budget presentation on Aug. 1.
After the final property tax rolls are certified on July 25, the 2013-14 budget will be prepared and formally presented to the City Council.
The council is scheduled to have two public hearings on the budget, on Aug. 13 and Aug. 20, before it votes on the final document in mid-September.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881 and via Twitter at @phwolfeDRC.
IN OTHER ACTION
During its regular meeting Tuesday, the Denton City Council also:
• For animal services, awarded a construction contract for the Linda McNatt Animal Care and Adoption Center to Schmoldt Construction Inc. for $4.28 million and approved a new schedule of fees, including reducing the adoption fee to $60 for dogs and cats.
• For Denton Enterprise Airport, amended an annual lease with HTA Aviation for another 2,575 square feet to accommodate a new hangar for CareFlite for $7,730 and approved construction of a 730-foot, 2-inch natural gas distribution line for $13,490 (which will belong to Atmos Energy upon completion) using airport enterprise funds.
• Approved three-year contracts with G&K Services for employee uniforms for $1.2 million, with Weaver and Tidwell LLP for independent audits for $427,500, and with Ancor Information Management LLC for utility bill printing and mailing for $1.05 million.
• Accepted a $324,701 bid from James Wood Auto Park to replace 12 vehicles.
• Amended a contract with Granicus Inc. for additional software to aid in the preparation of agendas and minutes for one year for $171,081.
• Extended the city’s property tax collection contract with Sawko & Burroughs for one year.
• Approved an interlocal cooperative purchasing program agreement with the city of Arlington for computer software.