Denton residents could pay higher trash bills next year to keep Denton beautiful.

The city’s proposed budget includes a 30-cent monthly solid waste rate increase to fund Keep Denton Beautiful Inc., a nonprofit community beautification group run by a volunteer board but staffed by city employees.

The fee increase is on a slate of higher trash fees the city is planning for the budget year that starts Oct. 1. The proposed budget also includes a tax rate increase and higher water rates. A City Council vote is scheduled for Sept. 21.

The city already pays most of Keep Denton Beautiful’s expenses, but the proposed budget would shift those costs from the general fund to the separate solid waste fund.

City leaders say moving the program into solid waste makes sense because both organizations promote recycling and the reduction of litter and trash. But some have questioned the timing of the move, which comes as the city is scrambling to cut costs and find new revenue to cover a budget shortfall.

And although moving the program would save the general fund an estimated $264,000 next year, it would cost solid waste more than $356,000, according to city budget documents. That’s because the city would begin charging Keep Denton Beautiful a franchise fee and requiring “cost-of-service” payments, which already apply to other solid waste functions.

The council-appointed Public Utilities Board withheld approval of the solid waste budget over concerns about the franchise fee. Dick Smith, the chairman of the utilities board, could not be reached for comment Friday.

City departments that work under standalone budgets, such as utilities and solid waste, pay franchise fees and cost-of-service payments to the general fund. Franchise fees are typically charged for the use of public streets and rights of way, while the cost-of-service transfers are meant to reimburse the city for the use of common services such as legal, payroll and accounting.

Unlike utilities, solid waste does not make annual return-on-investment transfers to the general fund.

Mixed views

City Council members offered mixed views on the issue during a budget workshop Thursday.

Council member Dalton Gregory said he supported moving Keep Denton Beautiful to solid waste but was hesitant to support the franchise fee.

“Franchise fees are developed because of the impact they have on city streets and things like that, and I don’t think KDB really has that kind of an impact,” Gregory said.

City Manager George Campbell said the fee should apply based on the principle that each fund in the city should pay for the services it receives and be paid for the services it offers. Carving out Keep Denton Beautiful as exempt from the fee would be confusing and inconsistent, he said.

“It’s pretty clear, in my opinion, that KDB is an extension of what solid waste is trying to do in this community,” Campbell said. “We could go into solid waste and say, ‘The administrative function doesn’t really use the streets,’ and carve that piece of the revenue out. Then we’ve just got a situation where we’re not consistent in the way we’re doing things.”

Council member Chris Watts said he initially worried that the proposed move was a “shell game,” since the city is desperate for revenue. But he agreed with Campbell that exempting the program from the fee would create inconsistencies.

“I philosophically may have a problem with the franchise fee, given the timing and the circumstances,” Watts said. “But I’m not sure I have enough of a problem with it to block that transfer [of the program].”

Watts said he didn’t view the move as a profit-maker, since it would cost the solid waste department more to operate the program than it cost the general fund.

“We show it as a cost savings to the general fund, … and even some revenue back from the franchise fee,” he said. “But in essence we’re just shifting the burden from the general fund, and people who pay ad valorem [property] taxes and sales taxes, to our solid waste customers.”

Two budgets

The city created Keep Denton Beautiful in 1987 as a special task force on beautification. In 2000, the program took its current form: a nonprofit group run by a volunteer board and facilitated by paid city staff.

The group organizes events including the Great American Cleanup, the Redbud Festival and annual tree giveaways. It’s an affiliate of two parent groups — Keep Texas Beautiful and Keep America Beautiful.

Keep Denton Beautiful operates under two budgets. A city-funded budget — under the parks department and approved by the City Council — pays for three employees, an office building on Riney Road, utilities, computers and other office-related costs, according to city records. The other budget, approved by the volunteer board, comes from the group’s fundraising efforts.

The group’s budgeted revenue for the 2009-10 fiscal year totaled $348,710, with about 80 percent coming from the city.

The board president is Lancine Bentley, the city’s code enforcement manager. She could not be reached Friday for comment on the proposed move.

The vice president, Christa Crowe, said she believes Keep Denton Beautiful would be a good fit with solid waste because of their common goals.

Board members were not asked to vote on the move.

“The KDB board has followed the progress of the transfer from the initial proposal; however, our role as a board is to direct KDB programming,” Crowe said in an e-mail.

The average resident shouldn’t notice a change in programs, which are funded through the group’s nonprofit budget, Crowe said.

Airport fund

The city’s proposed budget also would create an enterprise fund for Denton Airport and begin assessing a franchise fee along with return-on-investment and cost-of-service payments. For years, the airport relied on help from the general fund to break even, but city officials say the subsidy is no longer needed thanks to business growth and gas well drilling there.

“Now that the airport can be self-sustaining, it’s a natural evolution to move it to an enterprise activity,” Assistant City Manager Jon Fortune said. “There’s really no need to keep them in the general fund, because they’re able to support themselves now.”

LOWELL BROWN can be reached at 940-566-6882. His e-mail address is lmbrown@dentonrc.com.

RATE INCREASES

The city of Denton’s proposed budget includes several items that would affect residents’ pocketbooks. They include:

* a property tax rate increase of about 2.3 cents per $100 valuation,

* a 9 percent water rate increase, and

* the following solid waste rate increases:

-- small cart service would rise 95 cents a month, to $16.45;

-- medium cart service would rise $1.30 a month, to $18.65;

-- large cart service would rise $2.25 a month, to $21;

-- residential curbside recycling would increase 75 cents a month, to $5.05;

-- landfill drop-offs would increase $1.50 a ton, to $42.50;

-- commercial Dumpster and roll-off rates would rise an average of 9 percent.

Note: The proposed transfer of Keep Denton Beautiful to the solid waste fund accounts for 30 cents of the planned monthly increases for recycling and trash collection.

SOURCE: City of Denton