City Council Gets First Look at 2016 Budget Process

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The Municipal Plaza Building at Main Plaza. Photo by Scott Ball.

The Municipal Plaza Building at Main Plaza. Photo by Scott Ball.

City officials are already working on the 2016 budget, which makes more sense when you consider that San Antonio's next fiscal year runs from Oct. 1, 2015 through Sept. 30, 2016.

Residential real estate values in Bexar County have shot up 11% this year. As a result, gross taxable value in San Antonio is projected to rise 15.6% in the next fiscal year, according to the Bexar County Appraisal District’s preliminary estimates. Minus appeals, protests and corrections, there could be a net taxable value of 9.5% over FY2015, said city budget Director Maria Villagomez.

Gross property tax revenue is projected to increase by $70.6 million in the next fiscal year. Minus appeals, protests, corrections, exemptions, debt service and other factors, $22.3 million in net property tax income could be added to the City's FY2016 General Fund.

City Council members echoed Mayor Ivy Taylor and Councilmember (D1) Roberto Trevino’s call for a discussion about possible property tax relief. The City's property tax rate has not increased in 22 years, and actually has been reduced three times since 2007 through strong fiscal management. That's led to San Antonio's Triple A bond rating, the only major city in the country with the highest credit rating from all three major rating agencies.

Property owners who believe their properties have been overvalued can formally file a Notice of Protest and seek an appeal hearing with the Bexar County Appraisal District by June 1. Property owners can either do their own research and gather their own evidence or data to demonstrate their property is overvalued, or hire a professional to conduct that research and represent them at the hearing.

Villagomez said the City’s general fund forecast for FY2016 assumes maintaining the current level of services with a proposed restoration of $8.9 million in street maintenance, which was reduced by that amount this year after it became evident the City and the San Antonio Police Officers Association and the San Antonio Firefighters Association would not agree to a new collective bargaining agreement that would reduce health care costs by the sums built into the budget. Those talks have been suspended as the police union awaits the outcome of the mayoral runoff. The firefighters have never come to the table to bargain.

Mayor Taylor lauded this proposed restoration of street maintenance funds.

The FY2016 forecasted budget does assume, once again, that the City and the police union will reach an agreement by the end of the 2015 fiscal year in September. The City’s current proposal made March 20 offers $46.3 million more in wages over the life of the three-year contract through fiscal year 2018. This offer would maintain the city’s public safety expenses at 66% of the general fund budget. This calculates to $12,485 in healthcare costs to the city per employee, Villagomez said.

The police union's last offer made March 17 proposes $79 million wage increase over three years, or $14,196 in healthcare costs to the city per employee. This would raise total public safety expenses close to 70% of the general fund budget. he City spends about $7,700 a year on health care for its civilian employees who, unlike police and firefighters, pay monthly premiums for themselves and their dependents.

Villagomez provided a five-year forecast factoring in either agreement proposal: The city’s current offer would result in a $18.4 million general fund surplus by fiscal year 2020. The police union’s offer would produce an incremental general fund deficit from $16.4 million in FY2016 to $108.6 million in FY2020.

Villagomez said her staff are not formally recommending these specific numbers now, although they illustrate the consequences of achieving or not achieving a deal.

“The reason you can’t recommend this is because you’d either crowd out other city services,” said Councilmember Joe Krier (D9), “or, as my friend (former Councilmember) Reed Williams once said, 'You can turn two levers: Property tax or CPS Energy.'”

Krier referenced how the City would have to meet any deficit by raising taxes or utility rates. Cities must operate with balanced budgets, according to state law.

“You can’t jack up the sales tax and you won’t get the money from Father Christmas,” he added.

Taylor suggested the City should invite the police union to return to the negotiating table soon, but then remarked, "We probably know what the answer will be to that.”

“The position of City Council has not changed on this. We believe the last proposal was fair, reasonable and sets out to achieve the objectives we have as a City,” Taylor also said.

On the whole, Villagomez said the projected year-end financial position for fiscal year 2015 is better than when the council adopted the budget last September.

The city projects $20 million in actual additional general fund revenue, mainly from sales taxes and CPS Energy income, at the end of FY2015, compared with the adopted budget document.

Sales tax revenues are actually better than last year, but in year-to-date collections, San Antonio lags behind other major Texas cities. San Antonio recorded a 5.24% hike in sales tax income from January to May compared to the same time period last year.

That’s less than Austin, Dallas, Houston and Fort Worth, each reporting increases of 6.3-7%. This month, San Antonio is averaging a 2.16% increase over May 2014.

Villagomez said visiting Mexican nationals have been spending less money this Spring as a result of the peso's decline. She forecast a more robust second half of the year.

Villagomez outlined several funding requests recommended with little more than one remaining quarter in FY2015. One such request would add between $150,000 to $500,000 to enhance San Antonio Animal Care Services’ (ACS) marketing and outreach program to promote responsible pet ownership with a focus on the five inner city districts.

Another such request is $400,000 for a pilot program to fund ShotSpotter, a system that instantly detects gunshots and helps law enforcement, military and other security personnel to verify and trace the source of gunfire more quickly. Money for this, ACS’ outreach and other general fund FY2015 requests could come from the city’s $1 million general fund contingency, said Villagomez.

Afternoon Update: While ShotSpotter will be considered for the 2016 budget, it did not make the list of funding priorities for the contingency budget approved on Thursday. Stay tuned for more coverage of City Council's meeting later today.

Non-general fund, or restricted fund, requests for FY2015 include $1 million in pedestrian safety projects citywide; funding for B-Cycle program’s executive director, marketing and lease at HemisFair; a Greater San Antonio Chamber of Commerce-hosted staff position directing cybersecurity development issues for the city; and workforce development with Alamo Colleges.

Funding requests for FY2016 include implementation of the city’s comprehensive plan, and the first phase of deploying body cameras on police officers. The City would purchase 251 cameras for downtown foot and bike patrol and for park police.

Afternoon Update: These requests were approved by City Council on Thursday. B-Cycle will receive $121,500 for an executive director, marketing costs, and rent from Hotel Occupancy Tax and Energy Efficiency funds. $320,000 was approved to purchase 251 body cameras for park and bike police officers.

Taylor pointed out that one vacant spot in the city attorney’s office is being reassigned to inaugurate a new Office of Diversity and Inclusion in response to the non-discrimination ordinance passed by City Council in 2013.

Claryssa Cortez, a management fellow with the City and previously a specialist with the city’s Development Services department, will serve as interim liaison – a point of contact for individuals filing non-discrimination complaints.

The Office of Diversity and Inclusion “will serve as a clearinghouse in addressing (inclusiveness) and diversity in regard to veterans issues, contracting opportunities, disability and housing access, equal opportunity and non-discrimination protections,” City Manager Sheryl Sculley said in a memo Wednesday to the mayor and council.

The council will have a goal-setting session June 25 with a proposed FY2016 budget to unveil Aug. 6. Public meetings on the proposed budget could be held citywide Aug. 10-13 with final adoption expected Sept. 10.

 

*Featured/top image: The Municipal Plaza Building at Main Plaza. Photo by Scott Ball. 

Managing Editor Iris Dimmick attended City Council's B Session and contributed updates to this report.

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