Kilgore City Council members held the first of two hearings Tuesday night on the proposed Fiscal Year 2018 budget and tax rate.
Earlier this month, Kilgore City Manager Josh Selleck recommended a tax rate of 53.9 cents per $100 valuation – a 6.7 percent increase on the FY17 rate of $0.50572 – noting the need to continue funding maintenance and operations expenses in light of the 5.3 percent decline in taxable values in the city.
The proposed rate is slightly more than the effective tax rate of $0.534185, the total tax rate necessary to fund the same amount of property tax revenue as in 2017.
Following their discussion of the proposed budget and rate, council members set the requisite hearings on the items – after Tuesday night, the second is set for 5:30 p.m. Tuesday, Sept. 12, ahead of the council members’ related votes.
The goal is to develop a sustainable budget, Selleck reminded the elected officials Aug. 8, especially in light of the city’s sales tax reality: actual revenues will likely miss projected collections by between $200,000 and $400,000.
For the current year, “We have contingencies built into our budget, specifically our street maintenance reserve” to cover the deficit, Selleck noted, and that conservative planning persists in the FY18 budget.
Selleck’s proposed budget is includes expenditures of $15.91 million, approximately $350,000 more than the current year, with anticipated revenues of $15.76 million.
“In reality our budget already took into account a lot of he things we’ve done the past few years,” Selleck said, “cutting into meat” after already trimming the fat.
The budget includes a limited pay parity increase for city employees, he noted, as well as a one-time, $205,000 maintenance project for the city pool among other highlighted items. From various decision points for the council’s consideration, Selleck also noted the addition of a Main Street / Events Coordinator positioned at a net expense of about $49,000.
“We’re still in a tough situation,” Mayor Pro Tem Harvey McClendon said Aug. 11, adding that use of the fund balance is preferable to a tax increase. “That’s why we have it, that’s why we built it up.”
Asking Selleck to hold off on maintenance work at city hall and the municipal court, shelving a facilities needs assessment among other items, McClendon said the addition of a new position is a tough sell. Council member Merlyn Holmes disagreed.
The needs assessment is a necessary investment “in order to make future plans and spend money wisely, she said. Likewise, adding the Main Street and events post will shift work from overburdened employees for services that should continue: “I feel this is the time we need to do that … To me, we’re running our employees ragged.”
McClendon wasn’t convinced: “You’re comfortable with raising tax to fund these things?”
Without the added employee, Selleck said, it will be necessary to cut back on ongoing events.
“We’ve got so many people that are working hard on it, but it’s not any of their jobs,” he added.
McClendon was similarly concerned about the salary increase for City Hall staffers.
“We’re raising taxes so we can increase wages. That’s not the case with the general public,” he said.
Private businesses can cut back their activity, Selleck countered: “We have not seen a decrease in workload here.”
The private sector has layoffs and cutbacks, McClendon replied.
“We’re not discussing a philosophical issue,” Selleck answered. “We don’t parallel any of those industries,” and the city’s employees are working hard – some harder than before, as the economy struggles – at pay that’s not competitive to other neighboring cities and industries.
“We’re going to have a mass exodus of quality employees from places it’s not easy to replace them if y’all don’t make a salary adjustment this year.”
Without getting pay in line with other communities, Mayor Ronnie Spradlin said, Kilgore will become a training ground that can’t hold on to employees.
“When you say you’re raising taxes, it’s got to come somewhere,” McClendon said. “I’m not against any of this. I’m for it, but there’s a level we can tolerate.”
It’s due to the decrease in the tax base, Selleck replied.
“This was a balanced budget until we lost 5.3 percent in our assessed values,” he said.
According to council member Victor Boyd, “I’m at the point where we have to take care of our people,” he said. “At this point, I’m for moving forward.”
Spradlin hopes the overall situation is improving.
“I think we all do have a little feeling that things have bottomed and are turning,” he said. “To what degree, we don’t know.”