The clock is ticking on the Killeen municipal budget.

With the deadline for adopting a budget plan just six weeks away, the Killeen City Council has yet to reach a consensus on  any cost-cutting measures or revenue streams to bridge an $8 million funding gap.

If the council accepts interim City Manager Ann Farris’ proposed budget, about $7.2 million of the city’s reserves would be used to balance the budget — leaving the city with only about $11 million in operating expenses.

Putting the city in such a precarious position is unacceptable — and no doubt, Farris figured the council would reach the same conclusion and act accordingly.

But as one councilman told the Herald last week, that’s not a budget — that’s a message to keep spending and just write a check.

The problem is, the city would only be able to write that check once.

If the city’s reserves remain below 12 percent of operating expenses — as opposed to the 22-25 percent called for by city policy — the city won’t be able to pull this rabbit out of a hat again if revenue falls short next year.

Further, if the city needs money to meet a major emergency — such as a natural disaster or infrastructure crisis — the money may not be there.

Finally, a drastically reduced reserve fund would have a negative impact on the city’s bond rating, making borrowing money for city projects more expensive. It’s possible the city could even be denied loans in some instances.

Clearly, council members have to do something, but they also need a little help from Farris in identifying potential targets.

Councilman Richard "Dick" Young was justified last week when he and two other council members asked Farris to produce a bare-bones budget — one that has no new taxes, doesn’t draw down reserves, contains no capital improvement projects, no vehicle purchases, no raises or other pay increases and a list of positions that have been unfilled for at least three months.

However, to date, the council has not received the “adjusted” budget Young requested.

In fact, council members have yet to receive much of the information necessary to make informed decisions on budget adjustments — and it’s been more than a month since Farris first warned them of the $8 million funding gap.

Even if the council finds a way to patch the hole in this year’s budget, that doesn’t solve the city’s long-term problems. Enterprise funds are still declining, no new revenue streams have yet been adopted, and expenditures have yet to be trimmed.

The council and city staff last week discussed a recovery plan for the city and its fund balance. While it’s ostensibly a good step, unveiling of the plan should have preceded the release of the city’s budget on July 19.

Instead, the city lost a valuable week of budget planning, and that’s unacceptable.

Now, Farris has asked the mayor to place a discussion of her job description and evaluation on Tuesday’s agenda — another distraction from what should be the top priority: the budget.

The council must focus all of its attention on crafting a responsible budget that doesn’t deplete the city’s reserves.

Once it’s in place, the council must get on with the business of finding an experienced city manager to lead the city down a better financial path.

In the meantime, the council must authorize a forensic audit. The only way the city can attract a qualified administrator is to show without a doubt that the city’s finances are in good order and no hidden problems exist that could surface down the road.

Some have questioned the cost of a forensic audit, which can be substantial. But it must be noted that the city’s budget includes $1.5 million for consultants, including more than $250,000 in the city manager’s budget alone.

At this point, an audit seems to be a far better investment in the city’s future.

Contact Dave Miller at dmiller@kdhnews.com or (254) 501-7543

(2) comments

Alvin

This is the personal opinion of this writer.
I have a question: 'Is the city manager going to continue to stretch this whole budget process out until the city council does one of 2 things, accept defeat or tell the city manager that she has until next Monday night to either get everything that this city is obligated for turn in her resignation. I believe she and the staff of the Finance Director Jonathan Locke every thing that this city of Killeen is obligated for'.
Personally I feel that this is nothing but a dog and pony show. First it was $30K more money, then it was $8 million in debt, then it was $7.2 million in debt, then it was Certificates of Obligation totaling $4.14. Who else is in the city's pockets asking for money? This should be brought out into the open as to 'how many more certificates of Obligation, and General Obligation Bonds'. This council needs to know just 'what is the debt that this city is obligated to pay'.
Lay it out on the table for everyone to see. Settle the certificates of Obligation issue, see what we have on the General Obligation Bonds and then see what we have left over to operate this city on and plan appropriately.
If this city continues with a 'Rob Peter to Pay Paul aspect, this city will never be in the black.
I say do it and do it now.
One of the 3% who voted.

Bear3

Is this my opinion or the opinion of many with facts ?!
"The clock is ticking"
and yet Ann Farris continues to stay on the payroll like all other Executive Level positions receiving compensation in the triple digits and there is NO Solution to the FY 2017 Budget of dipping into the Fund Balance by proposing to bring it down to an all time low of 12%. This of course was initially created by 'no doubt' Dan Corbin, Scott Cosper, Glenn Morrison with his Parks and Recreation degree snd those involved with this collusion using tax payers funds!

Now the City will be broke in a matter of two years if a forensic audit is not ordered soon.

I mean which person would want the City Manager position in their right mind and or want to walk into the City of Killeen corruption / mess without a Forensic Audit?!

Working with this group of dysfunctional Executive Level 'Untrustworthy Individuals' that are known for being involved in collusion and doing whatever they want to including Assistant City Manager of Internal Services who is now Interim City Manager; Chief of Police and his corrupt department covering for Formal Mayor Scott Cosper and his extracurricular activities; Dan Corbin and Scott Cosper threatening to sue other Council Members for wanting to do what is right.
Kathy Davis, City Attorney, known for breaking laws and making rules up as they seem feasible it meet her agenda. Although Hilary Shine filed sexual harassment against previous management, wonder why she never did against ALL previous management? Did it have something to do with huge pay raises that no one else received retroactively?
Hilary should remember emailing she could spend city funds however she wanted to and she was 'practically running the city'.

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