Port Arthur City Council is looking to its rainy-day fund to pay for budget overruns totaling about $2.7 million.
With just two days left before municipalities are required by the state to have a new fiscal budget in place, Port Arthur City Commissioners added nearly another million to the already unbalanced fiscal plan and adopted the budget.
The proposed $92 million 2010-2011 budget was already $1.6 million in the red. With the added $974,000 the deficit increased by nearly a million.
To fund the deficit, the city will have to dip into its $27 million reserves. State mandates require the city to keep $17 million in reserves. Anything over can be spent at the city’s discretion.
Included in the added budget money is a 3 percent pay raise for non-civil employees totaling $750,000; $150,000 to help fund parking at a planned Westside community center; $38,000 for training initiatives; and another $36,000 for operational costs relating to the city’s newly-formed Downtown Renaissance Board.
Each of the added funding measures were considered in separate amendments.
Though Beard had made the motion and voted to add the $150,000 in Westside funding, he cast the only dissenting vote against the budget’s adoption.
“One thing that is really getting me inside, is we still have to run the city and still have to do the things we said we were going to do,” Jack Chatman, Jr., District 1 councilman, said before voting to adopt the budget.
Mayor Deloris “Bobbie” Prince said she would not vote for the proposed budget if it did not include pay raises.
“In order for our employees to continue to meet the costs of everyday living, I want to see them get a 3 percent pay raise,” she said.
Council members Robert E. Williamson, District 6 councilman, Morris Albright III, mayor pro tem; and Beard cast votes against employee pay raises.
“I understand everybody wants to be fantastic to employees, but the job of the city is to provide goods and services to the taxpayers, not to be an employment center,” Albright said. “If we don’t get nimble with our finances, we will be broke in about three years.”
City Manager Steve Fitzgibbons said the city had already trimmed about a $1 million from the budget by reorganizing three departments. Thirty-two vacant positions were also slashed from the budget as well as temporary staffing and overtime.
At last week’s regular board meeting, city council approved a tax rate of 0.792 per $100 of assessed value, the same as last year’s, to fund the budget.
For the owner of a $100,000 home, the newly-adopted tax rate will cost $792 in city taxes. The amount does not include a 20 percent homestead exemption, or exemptions granted to senior or disabled citizens.
Most homeowners won’t see much of a tax increase, if any, since this year’s appraisals for existing properties were largely unchanged. Added tax revenue is expected from new properties on the tax rolls for the first time this year.
The city is facing the budget shortfall largely from decreased industrial district payments, which comprise 42 percent of the city’s general fund revenue. This year, the values which are the basis of those payments, are down 25 percent.
Sales tax revenue is also down by about $2 million, but is expected to level out and go up in coming months.
Landfill revenues have also decreased from about $5.5 million in 2009 to about $2.7 million in 2010.
Water revenues have stayed about the same, and will not result in added cost to customers.
The new budget does include a $600,000 payment to an irrevocable trust resulting from proposed changes to the retiree health benefit plan. Not establishing the trust would put at risk the city’s ability to obtain federal grants and could negatively impact bond ratings.
Also included in the new budget is about $1 million for street projects.
An estimated $1 million in contractual 5.5 percent raises is in the budget for police and department officials. The city is currently in the third year of a five-year contract.
The budget also contains $1.8 million for capital equipment. That figure could be reduced to $1.2 million.