City Manager Sheryl Sculley presented newly elected Mayor Ivy Taylor and an eight-member City Council the 2015 Proposed Operating and Capital Budget on Thursday. For the 22nd consecutive year, staff has proposed a balanced budget without a tax increase.
No tax increase doesn't mean no new revenues. Rising property values, increased sales tax collections, and payments to the City by CPS Energy add up to a seven percent increase in revenues. Some of those funds will go to increasing the City's reserves to reinforce its AAA bond rating.
Most of the new revenues, however, will support a $15 million increase in street maintenance, nearly $7 million more for drainage projects, and spending increases on parks, libraries, adult literacy, and comprehensive planning, the latter called for by Mayor Taylor in her first major speech since being elected last month.
Sculley said the new budget maintains public safety spending at 66 percent of the budget, accomplished by forecasting a $14 million savings in uniformed personnel health care costs. That figure is based on the City's current proposal to the police union for a new collective bargaining agreement. The current contract expires Sept. 30. Negotiations stalled in June, and it's unclear when they will resume or if union negotiations will accept the compromise proposal. The firefighters union has yet to even agree to opening talks.
Mayor Taylor and various Council members implored union leaders to return to the negotiating table, but the unresolved standoff will remain the major question mark as budget talks progress through August and into September.
Overall, the proposed 2015 budget will grow by 5.9 percent from the fiscal 2014 budget, resulting in a $1.05 billion General Fund budget compared to $988 million in 2014. The City's fiscal year runs from Oct. 1 to Sept. 30. The new budget is subject to Council and public review in August and early September, and is set to be approved by City Council by Sept. 18. It goes into effect on Oct. 1.
Rising revenues tend to be offset by city growth and corresponding service demands. Most of the city's growth continues to occur in the suburbs where capital infrastructure costs are far higher than those that come with inner city infill growth. You can add a few thousand housing units in the urban core without funding new streets, libraries, fire and police stations, and parks. The same number of new single family homes in sprawling new subdivisions, however, come with substantial costs not covered by development fees.
Everyone pays for such growth, and there is no vote on the matter except during bond elections.
The 2015 proposed budget is no-frills, and together with the recent extension of the City's AAA bond rating, is a picture of fiscal discipline. It addresses the basics, but provides minimal opportunities for Council members to reallocate funding to additional district projects. Every district could easily benefit from tens of millions of dollars in infrastructure improvements if the money were available. It's not.
Then-Mayor Julián Castro and Council members met with senior city staff in May to set budget priorities. At that time there was some conversation about implementing the City's first tax increase in more than two decades to make up the shortfall. Ultimately, elected officials chose not to go that route.
Mayor Taylor said Thursday she was one of the Council members who favored consideration of a tax increase to fund more investment in inner city infrastructure.
"I was not part of that majority, 20 years is a long time without an increase," Taylor said Thursday. "I think in the future we will have to have that conversation."
The actual budget document produced by Villagómez and her staff, who were on hand and lauded in Council chambers for working six-day weeks and long overtime hours to prepare the budget, resembles a phone book in the days when land lines were still universal. It's 355 pages.
Sculley spared the Council a marathon presentation and led members through a brisk review of a 30-slide Power Point budget summary. Council work sessions and public hearings scheduled for August and September will give everyone the opportunity to delve more deeply into the details and push for further consideration of projects in their respective districts.
The total City budget is $2.4 billion, but $710 million of that is restricted funds, which cannot be reallocated, covering basic services such as solid waste collection, Sculley said. $665 million is for capital projects. For the first time, however, the General Fund has topped $1 billion.
The biggest source – 30 percent – of General Fund revenues comes from CPS Energy, which continues to contribute 14 percent of its annual revenues to the City under an arrangement that city leaders devised 72 years ago. That 14 percent is projected to be $316 million next fiscal year, an 8.1 percent increase. Property taxes account for 26 percent or a projected $268 million, a 5.6 percent increase. Sales taxes account for 24 percent, or $253 million, up 7.9 percent. Other revenue sources account for 20 percent, or $209 million, up 7.8 percent.
The City will add 120 acres and 13 miles of trails to its park and greenways system, spending an additional $561,000 in 2015. Another $415,000 will help maintain improvements at Hemisfair Park's play escape, Yanaguana Garden, scheduled to open in April.
A new library will open in District 9 in September at a cost of $300,000 for operations there. Another $334,000 is being budgeted for adult literacy programs and $500,000 for technology upgrades in the library system.
Animal care continues to be a major focus. The City is aiming for an 80 percent live release rate in 2015, compared to 20 percent in 2007 when efforts were redoubled to deal with the city's chronic stray animal problem. That goal will be funded with an additional $313,000.
New senior centers opening in May in District 5 and in September in District 10 will cost $545,000.
$5.25 million is budgeted for economic development, $1.75 million for citywide projects and $3.5 million for inner city reinvestment and infill policy waivers, incentive funds to continue spurring downtown residential construction.
Pay increases for the City's 11,292 employes will be modest. Civilian workers will receive a 1 percent cost-of-living wage increase and be eligible for 2-4 percent step increases based on tenure. Uniformed workers will receive a 2-3 percent wage increase and/or 3 percent tenure-based longevity pay, subject to a new collective bargaining agreement.
A Saturday article here will take a look at some of the capital projects funded in the 2015 proposed budget. Got a question about the 2015 budget? Send it to me at email@example.com and we will try to answer it.