Farmersville City Council and staff consider proposed FY18/19 budget with key policy changes
By Paul Myers @PaulM_SGN
FARMERSVILLE – As far as city budgets go Farmersville has managed to keep their head above water. They have weathered financial storms through budget cuts and salary freezes. Now with the 2018-2019 fiscal year approaching on July 1 the City is making some key changes to how they manage their money, and they have a little more this year than last.
Residents of Farmersville in November 2017 voted to increase their sales tax rate from 8.25 percent to 8.75 percent. As a result the City is projecting a 6 percent increase to its general fund for the 2018-2019 fiscal year, bringing revenue up from $3.6 million to almost $3.9 million. Meanwhile, expenses for the upcoming fiscal year are expected to rise by 2.3 percent. According to finance director Steve Huntley’s proposed budget the City should expect a general fund surplus of just over $166,000. Huntley writes in his budget, “The small margin of revenue exceeding expenses should be set aside for leaner times.” Fortunately the City Council had already taken some steps toward a prudent financial future earlier this year.
By passing a debt management policy, and a budgetary uncertainty fund and minimum fund balance policy the City aims to change the future of their finances. According to the proposed budget the debt management policy will change the City by enabling them to meet State requirements in turn allowing them to engage in large infrastructure projects like the Wastewater treatment facility; and by self-imposing a requirement to create and maintain a Capital Improvement Plan and a corresponding Capital Improvement budget. Secondly the uncertainty fund and minimum fund balance policy allows the City to create a long-term safety net, “to help ensure the success of the City for the future.”
The budget notes with savings and prudent policies such as these the City will be able to break the cycle of only planning for the short term, where every project is a need, and start planning for the long term allowing them to be proactive on improving or expanding services.
Huntley’s proposed budget also warns of the City’s propensity to willfully accept grant monies for projects that have not been adequately evaluated. Huntley pointed out the cost overruns for the Water Energy Grant project for the current fiscal year. The project brought water meters and other water saving measures to the City. However, when the project was actually reviewed some of the water saving incentive programs was so unlikely they were scraped all together. Unfortunately that was only after money had already been spent on them.
“Due to an inappropriate lack of verification ahead of time, the true conditions of and the actual amount of meter replacements needed caused the project to have cost overruns of over $200,000 or nearly 20%,” the budget reported.
The budget warned that expensive mistakes similar to the water meter project are a detriment to the City’s financial ability to pay for projects at all. It was prudent to address the mismanaged water meter project as the City is now “starting the most expensive project to date in fiscal year 2019.”
Huntley points out in the budget the new wastewater treatment plant will be constructed with a cost of nearly $24,000,000.
“If this project has a 20% overrun or other costly errors the City would need to come up with another $4,800,000 which would be a fiscal crisis the City would be hard pressed to survive,” the budget added.
The budget states projects need to be carefully selected and researched thoroughly before the City starts work in order to avoid disastrous results.
“It would be wise for the City to not take on any further projects but work through the remaining commitments as best it can before making more commitments it cannot keep,” the budget states.