Big Spring City Manager Gary Fuqua, left, holds a copy of the proposed 2012-2013 budget while addressing the city council during its workshop Monday evening. (HERALD photo/Steve Reagan)
Big Spring city officials are adopting a â€śjust say noâ€ť approach to tax increases this coming year.
The city council gave its tentative approval to a new budget that is both balanced and features a slight dip in the tax rate during its annual workshop Monday night.
Among other things, the new budget features a pay raise for employees (the first in two years), $500,000 for water line replacement, set-aside money to purchase property for landfill use and almost $4 million designated for water purchases.
But the most important feature, at least in the eyes of city leaders, is the fact that the new budget gives taxpayers something of a break â€” increased property valuations will allow the city to lower its tax rate while collecting the same amount of revenue as the previous year.
The proposed tax rate for the coming fiscal year is 89.5 cents per $100 property valuation, a 5-cent decrease from the current fiscal package.
By going with the â€śeffectiveâ€ť tax rate (the rate which will raise the same amount of revenue as the previous year), the city is the only major taxing entity in Howard County which will not increase its tax levy for the coming fiscal year, City Manager Gary Fuqua said.
That fact generated praise from council members.
â€śAnything over the effective rate is a tax increase, no matter what anyone tells you,â€ť Craig Olson said. â€śAnd I congratulate (Fuqua and his staff) for avoiding that.â€ť
â€śI think this is pretty much a tribute to you and your staff for working harder and smarter,â€ť Mayor Tommy Duncan told Fuqua. â€śThrough your efforts, we're able to bring costs down.â€ť
Among the highlights of the proposed budget are:
â€˘ Pay raises â€” The council approved a 3 percent pay raise for all employees (excepting senior staff) and held the door open for even more pay increases.
Faced with an annual turnover rate of about 30 percent, Fuqua said the city has to do something in order to retain its employees.
â€śWe're losing them about as fast as we can get them,â€ť he said. â€śAnd we're losing them in all departments â€” the police department, fire department, sanitation and other sections, as well.â€ť
The oil boom is the major culprit behind the employee exodus. City officials concede they cannot compete with the oil industry when it comes to salaries, but they also believe they had to do something to encourage employee retention.
â€śThis won't help us compete with the oil field, but it will at least show our employees we appreciate their efforts,â€ť Fuqua said.
The city may not stop at a 3 percent pay hike â€” prodded by Olson and fellow council member Marcus Fernandez, the council said it would approve a 4 percent salary increase as long as the tax rate remains at the effective level.
Fuqua sounded optimistic that the additional money can be found.
â€śOne of the things we'll have to look at is property values,â€ť he said. â€śIf they come in higher than current estimates, we should be able to (provide funds for the additional pay raises). Another thing is that we were very conservative in estimating sales tax revenue for the coming year. It might very well come in higher than anticipated.
â€śBut even if we need to go back through all the funds and make some more cuts, we'll be very motivated to do so,â€ť he added.
â€˘ Water line replacement â€” Having replaced water lines on Third and Fourth streets and Birdwell Lane during the current fiscal year, the city will take aim at other areas in the coming 12 months.
Assistant City Manager Todd Darden said officials are eying the west end of town and the area surrounding the water treatment plant as possible sites for future water line replacement.
â€˘ Landfill purchases â€” Fuqua said the city landfill will be full in about four years, and since the permitting process for opening a new landfill also takes about four years, he said the city is reaching a critical stage in deciding the future of the facility.
He said the city basically has two options â€” either purchase a new plot of land somewhere in the county or purchase land adjacent to the current landfill.
The advantage to the first option is that a entirely new landfill would give the city about 100 years of effective use. The downside, Fuqua added, is that no one wants to sell their property for use as a garbage dump.
The second option has the downside of a shorter shelf life â€” only 30 years of effective life â€” but may be more doable, Fuqua said.
â€śWhatever we decide, we have to do it fairly quickly,â€ť he said. â€śWe'll have to reach a decision by the end of the year.â€ť
â€˘ Red ink â€” Some funds are likely to continue to have deficits this year, including Emergency Medical Service, service center and senior citizen center.
Since the city is obligated by law to respond to ambulance calls, Fuqua said there is little chance of reducing the EMS deficit in the near future.
With regards to the service center, which maintains and repairs city vehicles and equipment, Fuqua said a possible way to reduce the red ink is to contract out those services.
The senior citizen center, however, presents different problems. Fuqua said outlays to the center have almost doubled since the city took over operational responsibility from the county in 2008, but structural issues and other problems with the facility make a solution problematic.
In addition, Fuqua fears the county may discontinue its annual $75,000 subsidy to help with operational costs.
â€śIf the county subsidy ceases, we may have to evaluate the viability of the entire program,â€ť he conceded.
Overall, however, Fuqua expressed satisfaction with the proposed budget.
â€śI thought the process went fairly well,â€ť he said. â€śThe supervisors and department heads brought in very realistic budget requests and the council gave us instructions on what they wanted us to do. We went through all that, and I think we met all the goals they set for us.â€ť
The city's new budget will be formally adopted in September.