Water fund covers city’s shortfall

Council dips into account to stave off tax increase, make up for lost revenue

Texarkana, Texas, residents will not see a city property tax increase in the coming year as originally proposed.

Instead, officials will transfer $6 million from the city’s water fund to its general fund to make up a shortfall caused in large part by lower than expected sales tax revenue.

At its regular meeting Monday, the City Council approved a Fiscal Year 2018 budget with a last-minute amendment that keeps the property tax rate at $.70 per $100 valuation.

The amendment also authorizes the water fund transfer, eliminates a proposed environmental fund that would have increased water rates by 30 percent and reinstates and funds 11 city jobs—including a police officer position—that had been frozen to save money.

Interim City Manager Shirley Jaster emphasized that the fund transfer will not affect Texarkana Water Utilities operations or any city obligation.

“The funds will not be taken from any daily operations or any change in employees at our water department. It is not going to have any funding taken for shared operations or debt that we have with the Arkansas side. It is not going to impact any of the member city funds, nor is it going to impact any of our Corps of Engineering or ultimate rule curve funds that we are putting back. So, the funding would be taken from other sources,” Jaster said.

City Chief Financial Officer Kristin Peeples said she and Jaster will work together to specify those sources.

The changes follow recommendations presented by a newly formed budget advisory committee during a public hearing on the budget held Sept. 5.

The council voted to form the committee last month. It comprises seven members, one selected by each City Council member and the mayor. Former City Council member Van Alexander chairs the committee, which has held several private meetings in recent weeks.

The committee also recommended changing how much money the city must keep in reserve. Rather than being calculated as a percentage of the total budget, the reserve would be 60 days’ operating expenses. The Government Finance Officers Association recommends the 60-day standard, Jaster said.

“Anything over the 60 days that is in the fund balance would be rolled to the general fund,” she said.

Ward 6 Council Member Josh Davis praised the efforts of city staff and the advisory committee to avoid a tax increase.

“I’d like to tell the staff how much I appreciate the lengths and efforts y’all went through with working with the council and as well as with our budget advisory committee. I know there was a very short timeline where we kind of dropped this on you. And so I want to tell you how much, how sincerely I appreciate all the effort that’s gone into this. And I would also like to thank the members of the committee that are here tonight. … Hopefully, y’all can help us out in the future, too,” he said.

Ward 3 Council Member Betty Williams also expressed appreciation.

“I would like to thank the members of the budget advisory committee for their hard work in coming up with these sound recommendations in such an abbreviated time frame. I am hopeful that they will be able to continue their work as a standing committee in the future,” she said.

The original proposal was to raise the property tax rate from $.70 to $.74, generating more than $885,000 needed in part because sales tax revenues dipped by about $380,000 from fiscal 2016 to fiscal 2017.

Based on previous years’ trends, the 2017 budget planned for a 3 percent increase in sales tax revenues. Instead ,there has been a slight decrease. The 2018 budget plans for only a 1 percent bump in sales tax income.

A $600,000 expense to pay for staff pay raises approved last year also contributed to expenditures outpacing revenues, as did an increase in the Texas side’s contribution to operating the Bi-State Justice Building.

The city still plans to suspend any Capital Improvement Plan projects until 2023. The CIP is a long-term schedule of prioritized infrastructure improvement projects to be funded by selling municipal bonds.

Because city finances cannot currently bear taking on any more bond debt, planned CIP projects such as building three new fire stations, renovating the Perot Theatre and constructing a downtown arts park are on hold.

The council also voted to enter into collective bargaining with Texarkana, Texas, Fire Department firefighters. The measure also directs the city secretary to conduct an election to determine firefighters’ agent in collective bargaining negotiations.

In November 2016, Texas-side voters chose to allow firefighters to elect a representative and enter into collective bargaining talks with the city. In late March, 92 percent of firefighters voted for the firefighters’ union, according to local Chapter President Scott Robertson.

City Hall, however, wants a new vote conducted under its supervision. TTFD will probably cooperate because the next step would be arbitration the city would have to pay for, an unnecessary expense, but only if the city’s requirements are not too burdensome, Robertson has said.

It is illegal for Texas police or firefighters to participate in strikes, work stoppages or work slowdowns.

The council’s next meeting is scheduled for Sept. 25.

On Twitter: @RealKarlRichter