City begins budget process: No deficit projected for 2012-2013

PLANO -- New firefighters and library books are just two of the items in an early draft of next year's city budget.

In a presentation Monday night, Budget Director Karen Rhodes-Whitley shared her three-year budget forecast with the city council. Among the news shared by Rhodes-Whitley was the fact she is not projecting the city to have a budget deficit for the 2012-2013 fiscal year.

"This is the first time since fiscal year 2006-2007 that we have been able to present a report that doesn't have us reflecting a budget deficit for the following year," she said. " ... In 2013-2014 and 2014-2015 we are projecting $13 million budget deficits, however this is so much better than last year when we were projecting anywhere from $20-$30 million."

Rhodes-Whitley credited the city council and city staff for working diligently to reduce expenditures for the past four years. Since 2008, $39.5 million in cuts have been made, including eliminating 142 full-time positions and 22 part-time positions.

The annual budget process is still in the very early stages, with departmental budgets not due until May and a final budget not scheduled to be approved until September. Still, money has already been penciled in for the purchase of new library books and the hiring of 15 new firefighters, Rhodes-Whitley said.

The 15 firefighters will be stationed at Fire Station 13, which opened last August. In addition, money has been set aside in the Community Improvement Program to hire 30 additional firefighters in the following two years.

City Manager Bruce Glasscock said the new fire station was necessary in order to improve response times on the west side of Plano, and to ensure the city kept its ISO Class 1 rating. He said the $1.7 million spent annually will cover the cost of the firefighters, as well as their equipment.

The budget forecast also includes $1 million for the purchase of new library books for the city's five libraries. The money for books is also expected to be included in the following two budgets, according to a letter from Glasscock to the city council.

In her presentation, Rhodes-Whitley said her staff made a number of assumptions to come up with the forecast. Among the assumptions was that no pay raises would be given and that the city would have an annual attrition rate of 2.5 percent.

It was also assumed that property taxes would likely remain flat, something Budget Manager Casey Srader said was confirmed at a Tuesday meeting with the Collin County Central Appraisal District.

"Everything is very preliminary since the appraisal district still has to go through the appeals process, but we feel that the projections made in the three-year forecast are right in line," Srader said.

While the property tax values might remain flat, it is estimated that $350,000 in new property will be added each of the next two years, with $250,000 being added in the 2014-2015 budget year. The new property is expected to add $1.7 million to the city's property tax revenue for the upcoming year.

Rhodes-Whitley said the city is also expected to see an increase in sales tax revenue, which is the city's second largest source of revenue after property taxes.

"If you go over the last three years and average it all out, we have averaged sales tax collections of $59 million," she said. "... Your actual projected collections, and this is being conservative, is going to end up being $64 million. The majority of that was a $3.2 million sales tax adjustment in our favor, but even if you take that out you are going to collect $61 million."

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