The reality of Killeen’s budget crunch just hit home.
Killeen City Manager Ron Olson last week presented the City Council with a proposed balanced budget for the coming year — a considerable achievement after last year’s projected $8 million shortfall.
But making ends meet will come at a considerable cost to some Killeen residents, if the proposed budget stands.
For example, the city will no longer offer morning activities at the Killeen Community Center.
In addition, Lions Club Family Recreation Center will eliminate half of its free classes for members.
Moreover, the city’s senior recreation director position, which has been vacant for 17 months, will remain vacant and unfunded.
The Pershing Park Pool, which is in need of repairs and has been closed for two years, will remain closed next year. Plans call for it to be converted to a splash pad in the future, leaving west side residents with no pool facility.
It’s not just recreation activities that will be facing the budget axe.
At a time when Killeen is facing a serious uptick in violent crime, the budget calls for eliminating 25 vacant police department positions. The budget also proposes slicing $390,000 off the fire department’s overtime budget. Nine positions also would be eliminated from the Community Development Department.
While these and other cuts have allowed Olson to cobble together a spending plan that makes ends meet, the long-term financial outlook is anything but rosy.
If no additional revenue sources are identified, projections show the city with a $4.1 million revenue deficit in the general fund by 2021 and a staggering $26.7 million shortfall in 2037.
Clearly, something must be done to address this unsustainable trajectory.
Last year, council members ruled out a property tax increase early in the budget discussion, setting the preliminary tax rate at 74.98 cents per $100 valuation. Once it was set, it was impossible for council members to go back and reconsider an increase.
A property tax hike is an unpopular option with most current council members, but it may be necessary to stop the bleeding. While a two-cent rise in the tax rate only produces about $1 million in revenue, as part of a larger strategy, it could be a valuable tool.
Another revenue stream could be accessed by implementing impact fees, which were approved in principle earlier this year, but never enacted. While not popular with developers, these one-time fees assessed on permits could provide up to $5 million annually to help fund new infrastructure impacted by development.
Transportation utility fees, charged to utility rate-payers as a means to fund infrastructure improvements, would be a good way to ease the burden of paying for street projects — especially since the city is looking at about $40 million in infrastructure maintenance needs that are currently unmet.
These utility fees were considered by the council during last year’s budget discussions, but the idea was eventually rejected.
Though the city’s financial ship has been righted for now, it’s unlikely to stay that way without a significant, steady influx of revenue.
That’s especially true given the staggering increase in state-mandated property tax exemptions to some disabled Killeen military veterans. In 2007, the value of exempted property totaled about $50 million. This year, that total was close to $583 million — a more than 10-fold increase. Though Killeen does get some reimbursement from the state for exempted property — about $880,000 this year out of the $4.4 million lost to the exemption — it’s still a huge hit to the budget.
Ultimately, doing less with more is a worthwhile concept — up to a point. But when cutbacks start impacting city programs and services, it’s time for decisive action to increase revenue.
The city’s solid waste department is operating in the black right now. But if Killeen outsources its trash pickup — as is currently under consideration — it could get out from under associated payroll, equipment, maintenance, fuel and insurance costs. That last category is especially important, given the volatile health insurance market right now.
The city could also privatize the city’s golf course operations, which is also under consideration. As the course operates on a thin profit margin, it may be in the city’s best interest to turn it over to an outside contractor.
Whatever changes are proposed, it’s up to the city’s residents to speak up and get involved.
A public hearing on the budget is set for Aug. 22.
Last year, Killeen residents were alarmed when then-interim City Manager Ann Farris proposed a budget that projected an $8 million shortfall and a 10 percent increase in expenditures.
However, it wasn’t until the council discussed the possibility of closing one of the city’s libraries to save money that residents showed up in force at council meetings.
Why? Because the budget shortfall was about to hit home with them. A service that many of them used and depended on was facing elimination.
The new budget should hit home as well.
If the proposed spending plan is approved by the council and the tax rate is unchanged, residents will be paying the same 75 cents per $100 valuation as they have for the past six years. But because of cuts in programs, services and a reduced public safety presence, Killeen’s overall quality of life will decline — and that is unacceptable.
Granted, Olson is in the unenviable position of having to make difficult spending cuts in order to produce a balanced budget without a tax increase or new fees. He noted that the cuts he proposed would stretch the city’s “core mission.”
That may be true. Sometimes it’s the little things that make a city more livable, and Killeen can’t afford to lose ground in that department. And with a looming deficit projected in future years, even more services and programs may be on the chopping block.
Looking ahead, Olson and the council have a tough job ahead of themselves.
If they can’t get a handle on the projected deficit in coming years, they’ll just be bailing water in a leaky boat.
And that’s a scenario that is unlikely to end well.