Written by Amanda Coers – The Brownwood City Council held a public hearing on the proposed budget at 9 a.m. at City Hall on August 22nd to receive input from the public. Before opening the floor for public commentary, a detailed summary of the budget was presented by Walter Middleton, Director of the city’s finance department.

 

“This budget has been particularly difficult to put together,” said Middleton. “This budget, as you know, is about as bare-bones as it gets.”

The 2017-2018 budget planning began in early May, with the distribution of budget worksheets to the city’s department heads. The budget requests from each of those departments were received by June 9th. From there, city manager Emily Crawford and the city’s finance department held several budget meetings over the course of a week, meeting with the department heads to discuss budget needs. On July 28th the city manager published a proposed budget. During the first week of August the city council participated in budget workshops, and then published a revised proposed budget on August 14th.

“We faced three very significant revenue challenges,” Middleton explained during the public hearing. “This year we know we’re going to have some significant shortfalls in our budget.”

Those challenges included a drastically reduced sales tax revenue following a trend of online shopping. Water sales are also very low, as consumers have adopted a more conservative water usage approach after experiencing drought conditions for an extended period of time. Sewer revenue once received from the city of Early will be reduced by over $160,000 this year as Early plans to complete its own sewage treatment facility. The city of Early had been paying a little over $20,000 per month for Brownwood to treat their sewage.

“The total revenue shortfalls are right at $900,000,” Middleton said.

The city of Brownwood has also seen changes on the expense side, with mandatory waste water treatment plant bond payments, a 14% rise in medical insurance costs, as well as personnel changes. The total for the changes in expenses for the budget was $848,463.

With both revenue shortfalls projected, and an increase in expenses has a negative impact of $1,745,000 for the city’s budget. It was noted during the public hearing that there were no across-the-board pay raises granted in the proposed budget.

“We are proposing an increase in the property tax rate from .7463 per $100 valuation to .7946. That would be an increase of 6.5% in the rate,” Middleton said. This will roll back to the tax rate established in 1999. Since then there have been no increases in the tax rate except for a small effective tax rate change in 2012.

“For an average residence, which the appraisal district tells us is valued at $92,750, this will cost about $45 per year, or $3.73 per month for that residence,” he explained.

Totaled, the tax increase will raise $473,000 in revenue for the city of Brownwood. To compensate for the increase in the city’s expenses, the budget proposes the following increases:

  • The Brown County Water Improvement District increased the wholesale water rate by 3.6%, which in turn has caused the city to propose to increase the water consumption rate 1.8% to compensate for the increase. On average, this will cost a typical Brownwood household an additional 40¢ per month.
  • The city is also proposing to increase sewer consumption rates by 8.4% to cover the cost of the new bond payments for mandated improvements to the waste water treatment plant. This will increase the minimum level of service by $2.08 per month.
  • There is a proposed increase in the sanitation rate by 4% to cover the cost of buying two new trash trucks, as well as cover maintenance costs for the rest of the ‘aging’ fleet. The sanitation rate increase would translate to an added 84¢ per month to a residential bill, and $2.42 to a minimum commercial bill.
  • The city proposed a $2 increase per ton to the landfill gate rate.

The overall cost to an average residential household is an additional $7.05 per month, or $84.60 per year.

“None of us on this council ever want to raise taxes,” Brownwood Mayor Stephen Haynes said as the finance director completed his presentation. “But, we have a fiscal responsibility to the city and the reality is we’ve had less revenue and more expenses, the largest of which is outside of our control,” the mayor said, referencing the mandated improvements to the waste water treatment facility handed down by the Environmental Protection Agency.

“We want the public to know that the staff did propose a budget to the council that contained no tax increases, but instead contained fee increases,” the mayor went on to say. “Fees tend to make the lowest income people pay the greatest percentage of the additional fees. So my personal opinion is that a budget heavily dependent on increased fees and lower taxes would be detrimental to a lot of low income folks.”

The mayor also explained the city had passed a tax freeze for residents over 65 years old, but that freeze would not extend to increased fees, which would cause elderly residents to ‘bear the burden’ of that increase.

“I want everyone to know that this is not a decision that any of us reached lightly,” he said. “It’s the first time since I’ve been mayor that we have raised the tax rate. And it’s something that no one ever wants to do.”

Mayor Haynes also said that to avoid raising taxes or fees, the city could drastically reduce expenses within the budget, but that would translate to firing police officers, firefighters, and other city employees.

Only one resident came forward with concerns about the tax increase to address the city council during the public hearing: Craig Younce.

“Thank you for all your work, and all you do. You’ve made some tough decisions,” said Younce as he addressed the council. He went on to say he would more likely be in favor of fee increases rather than tax increases.

The mayor thanked Younce for bringing his concerns to the council, and further explained that switching to a fee increased based budget would save residents around $1 per month, but would adversely affect the elderly and income-disadvantaged residents.

Younce also shared his concerns that the recent city improvements, notably the newly installed splash pads, have contributed to the budget shortfalls and the need for increased taxes.

City Manager Emily Crawford explained the splash pads were part of a certificate of obligation approved by the city council a year ago, which included street renovations, park improvements, and facility improvements.

“What your seeing in the increased expenses in this year’s budget is not going to pay for those improvements,” she said. “Those were already figured into our budget before the tax increase was proposed.”

Younce finished with sharing his concerns that the city is lagging in sales tax revenues with the decline in retail shopping. The mayor acknowledged his concerns, and agreed it is important for the city to work towards increasing sales tax revenue.

“It’s a challenge to find those businesses that can make it, but that’s what we want is successful retail establishments,” Mayor Haynes said.