BY KATHY WILLIAMS
HERALD DEMOCRAT
Sherman city budget planners said they were happy to present a balanced draft budget that provides for essential city services and makes good on last year's property tax cut promises. However, a sad undertone seemed to punctuate their words Thursday as they explained some of the cuts that made those numbers work.
The draft budget of the General Fund for 2008-2009 is $30 million, about $450,000 less than last year's estimated spending. Total revenue to fund that plan is $28.9 million, which will decrease the fund balance to $5.9 million, still an adequate amount to hold in reserve, said Robby Hefton, the city's chief financial officer.
They also seemed highly relieved they were able to avoid massive services cuts or tax increases cities like Plano and McKinney have had to employ.
"Understanding that Sherman is not an island unto itself, this organization faces similar pressures and challenges other cities, businesses, organizations and families face with the struggling economy and rising fuel and energy costs," City Manager George Olson said. "The chief function of local government at all times is to serve the best interests of all the people. Staff has worked extremely hard in putting this budget together not only to ensure it accomplishes the objectives of the council but that it maintains the level of services expected by the public."
That was the philosophy Olson said his staff followed when it looked for efficiencies and other ways to cut expenses: Fund programs that benefit the total population. The priorities were public safety, streets, administration of vital programs, then community services.
City staff found more than $4.3 million in efficiencies in the General Fund; $1.6 million in the Water and Sewer Fund and $500,000 in the Solid Waste Fund. Many of the savings came from not implementing plans for new programs and in delaying purchasing equipment. The total number of employees will be trimmed, with more duties falling on fewer workers.
The only full program cut is the city's day care center, a $426,000 item. The day care center's operations will be phased out, ending for good Dec. 31.
The city will bring the Department of Tourism, currently a service contracted to a private party, back in-house. Tourism activities, funded at $229,000 this year, are paid through receipts from the hotel and motel tax, which also funds arts, culture and historical programs.
A subcommittee of the Sherman City Council has been revising the administration of programs funded by hotel and motel taxes for two years. Olson and Hefton will decide how to manage those funds and conduct other tourism, culture and visitor functions. They also will coordinate with Sherman Economic Development Corp. and the Sherman Chamber of Commerce to market the city. Hefton said they will bring back a detailed plan on the roughly $500,000 hotel and motel tax budget in the fall.
The city also will cut the minimum staffing of the Fire Department to 19 firefighters and emergency medical technicians from the current 20. The Sherman Police Department will delay hiring some specialized investigators.
Although the council took no official action on the draft budget, they agreed to the principle of all the changes staff members suggested.
Not only is the cost of almost everything the city buys going up, but Sherman faced additional challenges. It will need to spend an extra $700,000 in the upcoming year to dispose of its sludge. The city will issue $2 million more than planned last year in contractual obligation bonds. Some of this is attributable to increased construction costs and some from a new street project to open up the second phase of Pecan Grove Park.
City budget designers also had to contend with $425,000 in state-mandated increased costs to the retirement system. And they had to find ways to cope with revenue losses created by reducing the property tax rate to 32 cents per $100 valuation.
The staff focused on three F's this year: Finish what we started; Focus on essentials; and Follow the money.
Utility customers will see bigger bills this year, with solid waste customers shouldering an 11-percent increase and water and sewer rates elevated by 4 percent. The rate increase comes directly from higher costs to the city. Texoma Area Solid Waste Authority is raising its rates by 17 percent -- and likely will raise them more next year. Fuel costs for garbage trucks is rising for the city as it is with every other public and private entity. City staff members are exploring the notion of converting to bio-diesel to save money, in all the departments
Commercial solid waste rates have not risen since the city began offering the service.
Water and sewer services are more expensive to deliver as well. Federal and state environmental policies require equipment upgrades and higher quality discharged water.
In the finish-what-we-started category, the city will continue to develop and improve east-west thoroughfares and connect parks with hike and bike trails. The Comprehensive Master Plan is about one third complete. Sewer and water extension projects are proceeding and several roads, including parts of Travis and Washington are being rebuilt. Washington west of Heritage Parkway will require massive engineering, including the design of a new bridge.
Phase II of Pecan Grove Park will bring an amphitheater, pavilions and a playground. Center Street Park is in the design stage and should be completed in spring 2009, in time for the sports season.
The "Focus on Essentials" part of the plan sorted out which city functions benefit the general public and which serve a narrow group. Although it cuts pieces of public safety programs, it doesn't strip any essential services, Olson said. The budget drastically reduces the $600,000 in overtime for the Fire Department by reducing the minimum number of firefighters on the shift.
This focus also reduces duplication of effort among departments and delays some processes, like hiring a new engineer, until they are urgently needed to protect the value of other investments.
The "Follow the Money" idea involved both revenue enhancement, by contracting with private parties to collect money owed the city, and cost containment. For example, five hours a week -- during which the public rarely uses the Sherman Public Library -- will be stripped from its schedule.
"Just from a finance perspective, I'm really proud of the budget we developed... we've got some great things going on in terms of the projects you (the council) initiated," Hefton said. "But if it weren't for some other challenges, increases in fuel and energy, this would have been much easier. ... So the fact that we're bringing you a balanced budget in the general fund with all these things going on ... that's just a huge win in my mind."