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.