Council takes first stab at new budget; can the city afford two new police substations, an assistant city manager and a 3-1-1 customer-service call center

City Hall will need to spend $4.5 million more in the next budget year than in the current one to do nothing more than maintain the services the city provides in what now is a $90-plus-million, property tax-supported, general fund budget.

The $4.5-million budget gap was mentioned only in passing last night as City Manager Jim Prosser and the City Council took their initial public step at figuring out what the council wants in the balanced budget it will pass in March for the fiscal year beginning July 1, 2010.

Instead of talking about budget shortfalls, department heads took turns making a case to the council - Mayor-elect Ron Corbett and new council members Don Karr and Chuck Swore participated at the invitation of outgoing Mayor Kay Halloran, though they don't take office until Jan. 2 - about what additional needs they would like to see funded in the next budget.

Those new requests include about 25 new positions, the continuation of funding for what are temporarily funded positions like Flood Recovery Director Greg Eyerly's position, and the creation of new programs.

The new requests include the opening of two additional police substations, one near Lindale Mall and one near Westdale Mall, the hiring of an assistant city manager and the establishment of a 3-1-1 customer-service call center.

Overall, the new requests would add another $5 million to the budget if all were approved.

After the two-and-half-hour meeting, Prosser said it was far from certain if many or any of the new requests for new spending would make it into the new budget. Even so, Prosser told the council earlier that the city puts itself at “great risk” if it does not add new positions in the Finance Department to help cope with the demands of the city's flood recovery. In asking for seven new positions, Finance Director Casey Drew noted that the city's overall annual budget, which includes fee-based enterprises like the water and water pollution control, has grown from a $379-million budget to a $752-million one with all the spending on flood recovery.

Mayor-elect Corbett had the most pointed questions of Prosser and city staff.

Corbett wondered, for instance, about the funding for the flood-recovery director, the total cost of whose position was put at $206,029 with salary, benefits and related costs. Corbett noted that some private employers pushed for the position and promised to help fund it, but Prosser said there was no commitment other than a one-year, $60,000 one from the private sector.

Corbett also wondered how Prosser and Drew could have estimated in the spring that the city's new 1-percent franchise fee would bring in $1.2 million a year only now to realize it will bring in twice that amount on electric bills alone. The tax has not been imposed on natural gas bills, Prosser noted.

Among new costs that the city is facing is a $612,000 a year increase to the state police and fire pension system and an increase in employee health-insurance coverage of up to $542,000 a year.

One of  last night's revelations was the fact that residential property owners statewide will pay tax on more of the value of their property than they currently do. A state rollback now requires homeowners to pay tax on 45.6 percent of the value of their home and that percentage will go to 46.9 percent in the next budget year. That will mean a 2.9-percent increase in residential property taxes -- $30 a year more on a home valued at $150,000 -- if the council does nothing to the current tax-levy, which is $15.22 per $1,000 for the city's portion of the overall property-tax bill.