Cities increase budgets, services

Cities increase budgets, services

By Mark Collins Friday, 19 September 2008

A city’s budget is the document that tells the story of the city’s goals and how they will be achieved. It is the dollars and cents behind the intangibles the city provides such as public safety, mobility, recreation and utilities.

In Leander and Cedar Park, the story is a similar tale. Both municipalities are dealing with debt in order to provide services to citizens who live there while building the infrastructure to allow the growth pattern to continue.

“A growing municipality has no choice but to go into debt,” Leander Assistant City Manager Sharon Johnson said. “You’ve got to meet with the infrastructure for what you’re building. There is no way that a municipality can have that many funds set aside to do that many projects.”

In the 2009 fiscal year, 44 percent of Leander’s budget and 50 percent of Cedar Park’s budget will go toward debt service. In 1996 Cedar Park was paying 20 percent of its general fund toward debt service. Since that time, the population has grown by more than 35,000 and the general fund has inflated from just more than $5 million to a little under $30 million.

“This is not out of the ordinary for a town that has had explosive growth,” Cedar Park City Manager Brenda Eivens said. “When you have that happen, you’re spending money on voter-approved bond programs. There has been a lot of money spent on mobility projects and public safety. You’re going to be building things you need to provide better services for the demands of the community.”

The debt has grown due to recent bond sales in 2007 that funded projects like the Cedar Park Recreation Center, Leander Police Station and East Crystal Falls Parkway expansion.

Although a city’s debt is not likely to be completely erased, both Leander and Cedar Park cite improved bond ratings as evidence that the cities’ finances are headed in the right direction. The improved ratings mean the city does not have to pay as much interest, which allows the municipalities to provide more services with their revenue.

Cedar Park

“One of the first goals we have is to present a balanced budget and respond to our service demands so that we are maintaining our current level of service, or even enhancing it, in areas where we can enhance them,” Eivens said.

Public safety is one area upon which the city looked to improve.

With the approved hiring of seven new police department employees, Cedar Park will reach the goal it set three years ago of reaching 1.5 officers per 1,000 citizens. The addition of one detective in the criminal investigation division, two corporals and four police officers will bring the total sworn staff to 79.

Another big program included in this year’s budget is the opening and operation of the new recreation center. The center is expected to open in July and will employ four full-time employees as well as several part-time recreation specialists.

The new positions were made possible by increasing revenue generated by Cedar Park’s diversifying tax base. Building permit fees once accounted for more than half of the city’s revenue, but as the city nears build-out, an emphasis is being put on commercial developments that beget sales tax dollars.

“Having 1890 Ranch come into our city was a good thing because it brings people in, and it keeps local dollars within our city,” Eivens said. “We’ve also had some revenues reduced due to [a fewer number of] permits, and sales tax is one of the areas where we’ve been looking to offset that.”

The additional revenue put Cedar Park in a position to lower the property tax rate for the second consecutive year. The rate dropped nearly two cents to $0.4890, although homeowners will likely see an increase in their taxes due to the 9.5 percent increase in home value.

Leander

“The city of Leander is doing well to stay abreast of the growth,” Johnson said. “We need positions in every department, but, of course, there is only so much in your maintenance and operating budget, so we try to spread it out year by year and get every department a little of what they need. Maybe this year I have to do without while somebody else receives funding, but maybe next year they do without while somebody else gets funding. We try to be fair about it.”

Public safety is one area where Leander did not economize. The fire department will add nine new employees this year to staff the new fire station, and the police department will hire four new employees to continue the five-year staffing plan it set out on last year.

A new feature coming to Leander in the 2009 budget is automatic meter reading technology for water utility operations. New houses built in the Benbrook Ranch subdivision will be outfitted with an electronic water meter that broadcasts the reading to a truck as it winds through the neighborhood, saving time and money.

If the pilot program is found to be cost-effective, the new technology will be implemented in all new subdivisions and could be retrofitted into older neighborhoods.

Expenditures on new positions and new programs will be covered by the budget due largely to the 18 percent increase in sales tax revenue. The jump in sales tax has helped Leander put 25 percent of its budget in reserve, something it did not have as recently as three years ago. Johnson attributes the spike to Leander’s commercial growth throughout the city, not just the Gateway development.

“H-E-B is part of it. Lowe’s is part of it. There are a lot of small things that have gone in also like the Subway over on Bagdad. With Kohl’s you get a big number at one time; otherwise, it is small but it keeps growing. That 18 percent is due to everything in town, everything.”

With the average value of a house in Williamson County rising to $189,936 compared to $173,521 last year, homeowners will still see a rise in taxes despite the tax rate dropping half a penny to $0.602590. Johnson attributed the drop to the growth of the city and an efficient budget.

“I budget conservatively on the revenue side, and then I budget conservatively on the expenditure side,” Johnson said. “Then if we come out with any to boot, we can all go back and ask for our part of that.”

Past tax rates
Leander		Cedar Park
FY 2008-09	$0.602590	FY 2008-09	$0.489001
FY 2007-08	$0.607591	FY 2007-08	$0.508070
FY 2006-07	$0.598291	FY 2006-07	$0.518070
FY 2005-06	$0.556630	FY 2005-06	$0.518070
FY 2004-05	$0.558450	FY 2004-05	$0.468070