Killeen City Council members came to last week’s workshop session looking for answers — and they were right to do so.
More than two weeks after being told by interim City Manager Ann Farris that they would need to find $8 million to balance the upcoming budget, council members entered City Council chambers Tuesday having been given few details about why the money was needed.
Understandably, they came to the meeting with some demands.
Councilwoman Shirley Fleming asked for a list of line-item expenses from each city department head.
Councilman Gregory Johnson requested reports for the city’s revenues and expenses broken down by department for the current fiscal year, as well as account transfers from each enterprise fund to each respective department, expenditures that have been cut and will be eliminated to balance the budget and each department’s positions and current salary.
And once again, Councilman Jonathan Okray broached the subject of a forensic audit of the city’s books.
Over the course of a six-hour meeting — the second in two weeks — the council discussed several options for cutting city expenses — such as eliminating curbside recycling, outsourcing city services and even reducing the city’s mowing budget.
When Farris presented her proposed budget late in the evening, the council no doubt expected to see a document calling for a combination of cost-cutting and revenue-producing measures.
But stunningly, the 400-page proposal called for no tax increase and suggested further dipping into the city’s fund balance — an option that was not feasible, Farris warned the council on June 30.
Nevertheless, she presented a budget that calls for drawing the city’s reserves down from $18 million to $10.8 million — far below the minimum target rate.
In addition, the budget reflects a 9.7 percent increase in expenditures — hardly the bare-bones spending plan called for in the city’s current financial crunch.
If council members don’t agree to dip into the fund balance, it’s apparently up to them to find ways to cut spending. That puts the council in a tough spot, because many of the potential options are painful ones — such as reducing city services, raising taxes or eliminating city jobs.
Yet that’s the situation council members find themselves in. Unless they opt for some new revenue producers — such as impact fees or transportation utility fees — or increasing current fees, some serious cuts will have to be made.
Certainly, council members should be asking more questions at this point.
For example, why was the proposed budget presented two weeks later than scheduled on the city’s budget calendar — especially given the seriousness of the financial crunch?
Further, since it apparently took two extra weeks to produce, why didn’t the budget contain more imaginative solutions to the funding shortfall than simply dipping into the city’s already diminished fund balance?
Finally, since Farris was so quick to admonish council members about drawing down the reserves, why did she choose that strategy — and why such a sizable amount?
As Farris herself noted Tuesday, the city’s financial policy requires the council to maintain a reserve fund of 22 to 25 percent of the city’s operating revenue.
Given that guideline, a budget that proposes reducing the city’s reserves to less than 13 percent is both counterproductive and fiscally irresponsible.
Obviously, Farris is counting on the council to come up with creative solutions to minimize the need for raiding the reserves — and ultimately it is the council’s call on how to adjust expenditures and revenues, including calling for a tax hike.
But depleting the city’s reserves by nearly 40 percent in order to achieve “balance” isn’t sound budgeting — and the council no doubt recognizes this.
In the coming weeks, council members must keep asking the hard questions about shifting funds and falling balances.
If they can’t get answers, a forensic audit would be the next logical step — and a good investment for the city.