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Council Report: City Manager responds to budget items

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BUDGET RESPONSE ITEMS

Time for the Fort Worth City Council to approve its annual budget for the coming year is approaching, and City Manager David Cooke addressed the council with a response to some questions about items on the proposed Fiscal Year 2020 budget at its Tuesday work session.

Among the highlights was funding for a police monitor and administrative assistant.

For a police monitor, the estimated salary is $166,712, with additional incentives including health insurance, life and accidental death and dismemberment insurance, a retirement plan, and social security bumping the total package to $218,182. The salary for an administrative assistant would be $51,888, with additional incentives bumping the package to $78,853.

A review of police monitor position salaries in other Texas cities that have this function found Austin pays $147,612, Houston pays $191,318, and Dallas (position is currently vacant) pays between $51,000 and $86,000.

The annual impact of proposed utility rate and fee increases, along with increases in property values is an estimated additional $93.44 annually for a house valued at $200,000. The recommended budget also contemplates a 3.75 cent reduction in the property tax rate, but this reduction is offset by an overall increase in adjusted net taxable values of 14.3 percent.

The budget response also addressed questions concerning the property tax cap impact and future sustainability. If the tax/revenue cap of 3.5% had been in place this year, what would that mean for the budget? Also, given that the tax/revenue cap will be imposed in the future, is the city’s budget sustainable over time?

The hypothetical Impact on this year’s budget:

While there are still some questions about how different year-to-year variables will affect how the cap will be calculated, Cooke said the city has used some assumptions about what will be excluded from the “capped amount” (TIFs, annexations, new growth, and changes in tax ceiling values, debt service, etc.). The property tax revenue growth in the recommended budget is approximately a 9.7% increase over the current year budget.

New growth and other exclusions are estimated at approximately 3.9% of the new revenues. If the tax/revenue cap had been in place, he concluded that revenue growth would have been capped at approximately 7.4%. (It is important to note that the property tax revenue growth for FY2020 is also necessary to cover the loss of $8 million due to State Legislative action.) This would equate to a difference in property tax revenue of approximately $9 million to $11 million. The city would have recommended a budget with fewer resources for infrastructure maintenance (pay-as-you-go), transit, and/or fewer new positions added to the budget related to staffing studies and the Race and Culture Task Force.

Cooke said the question of sustainable over time is a good question and one that future city councils and staff will have to manage. Numerous staff and elected officials from around the state testified about the potential impacts of the legislation and there were many examples provided about the impact to local budgets.

 Cooke said the future will prove out what really will occur, but that it can be helpful to think about some of the anticipated policy questions. These policy questions arise

when thinking from a historical perspective, a future-looking perspective, and a peer perspective (what has happened in cities in other states that have imposed some type of tax/revenue cap?)

    The council is expected to be vote on the budget at its Sept. 17 meeting.

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