By Justin Cox
Killeen Daily Herald
The city's income has dropped while many of its costs have risen.
It's a sign that Killeen is much like the rest of the country – trying to muddle through the economic downturn and being forced to make adjustments along the way.
Director of Finance Barbara Gonzalez gave the City Council a briefing Tuesday on the decline in financial earnings throughout its departments.
The city, which had been earning more than a 4 percent return on its investments, found that those same earnings have dropped to 0.8 percent.
Several leading economic indicators are down as well, including building activity, tap fees, aviation emplanements, a rising unemployment rate and a drop in utility customers.
General fund projections are more than $2.3 million below this time a year ago. The aviation fund is down more than $100,000. The solid waste fund is down $1.1 million. The water and sewer fund is down $1.2 million, and the drainage utility fund is down more than $98,000.
The city is down $1.09 million in sales tax earnings through April of this year when compared to last year.
Because of these combined factors, the city staff is recommending a $4.2 million budget cut. It's just an example of the city's and country's financial situation, Gonzalez said.
"We're in line with the national recession. It is a little worse than we thought," Gonzalez said. "Our sales tax numbers are down. Our interest earnings and franchise fees (are down). Our recreation revenues need to be amended because those are areas that people are going to partake in less. We're being affected a lot more in this budget than we have been in the past."
Recently-elected Councilman Ernest Wilkerson is back on the council after a two-year break. During his six prior years on the council, Wilkerson was part of an unparalleled period of growth.
This year's budget process takes place during a recession, and an entirely new set of conditions governs this part of the process.
"It's pretty much what I was afraid of," Wilkerson said following Tuesday's briefing. "When I saw three of the economic indicators go down before, I knew something like this was going to happen. I think we're making all the right moves ahead of time, and I think we're doing the right things to keep us up."
Just looking at the fuel income at the airport, Wilkerson said he's used to the city being able to sell fuel for three- and five-year contracts, controlling the values and keeping them at a level that's beneficial to the city.
"It's not like that now," he said. "You're locking down a three-year contract, but you're still going to end up losing. You just try to put a ceiling on it to keep from losing too much. Usually, it was low and we made money. So that revenue stream is not getting as much as they usually do."
Next week, Gonzalez plans to brief the city on the expenditure side, which is said to be far more extensive.
Contact Justin Cox at firstname.lastname@example.org or (254) 501-7568.