Council Recap: Budget Workshop

The Richardson City Council held two days of meetings to hear City Manager Don Magner present his recommendations for the 2024-2025 City budget. Highlights taken from the City's own slides:

• Property tax rate reduction of $.01877 to $0.542180
• Senior Tax Exemption increase of $15,000 to $145,000
• 3.95% increase in Streets, Alleys, Facilities and Parks Maintenance Programs
• 3.95% increase in the Economic Development Fund to $2,076,659; an increase in Economic Development Department funding of $78,434 to $1,280,818 (does not include the marketing position reassigned to the Communications Department)
• $1.9M for Home Improvement Incentive Program tax rebates
• $3.84 million in funding for pay-as-you-go capital replacements and $1.56 million for the IT replacement fund
• 3.0% merit-based market pay plan adjustment for all employees
• An increase the minimum starting salary for full-time and permanent part-time positions to $19.45
• Continued investment in public safety via 5.0% public safety steps, capital equipment replacement, mental health programs, expanded community programming, etc.
• Funding for Richardson Replants, ADA Transition Plan, Housing Needs Assessment, Citizen (CARES/CPA/CFA) and Neighborhood Association Programs, Network/Counseling Place support, Culturally Diverse Programming and Events
• 3.0% water and sewer rate increase
• $2.00 (+tax) per month rate increase to the residential solid waste rate
• $1.00 per month increase to the residential drainage fee to $5.25 per month
• Commercial drainage fee increase from $0.119 per 100 square feet of impervious area to $0.147 per 100 square feet
• Annual Arts Grants funding increased to $375,000
• Several fee adjustments to better position Sherrill Park to cover operational costs, equipment needs and fund a capital maintenance reserve
• Implementation of Phase 2 & 3 of Sherrill Park Master Plan via $6.0 million Certificates of Obligation

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What did the City Council have to say?

Mayor Bob Dubey: "I think that your efforts are very honorable, and they're very much in step with the tactics of the goals of this council. And so personally, I'm very pleased how you strategically have done it. I love the fact that you have the pay-as-you-go in many instances. We're not incurring additional debt on several of those items when possible."

By pay-as-you-go, I assume Mayor Dubey is referring to paying for capital assets out of current revenues, not debt. Mayor Dubey doesn't say why he is "very pleased" with that funding strategy. The real cost of borrowing depends on interest rates and inflation, now and in the future. Saving money up in a PAYGO fund for future capital expenses can result in watching the value of tax revenue get inflated away before it's spent. On the other hand, time can inflate away the burden of debt, possibly making it cheaper in the long run to fund capital assets with bond revenue. There's no one right answer for all cases and all times. I hope Mayor Dubey did his own homework on such questions and that's what leaves him "very pleased," because there was no accounting for these tradeoffs in Magner's presentation.

Councilmember Joe Corcoran: "When I was first on Council, it seemed like our focus with the IQ was really trying to work on improvements to some of those 1970s, 80s, warehouse spaces... Do I have the right impression that we're shifting our strategy now to primarily focus on renovating office spaces and retail spaces?"

Magner's answer? "I would say that we have not changed our priority in IQ." Corcoran thanked him for that response, but didn't say explicitly whether he agrees with giving priority to adapting aging flex-space buildings.

Corcoran also asked for an explanation for a change in how certain expenses for economic development are accounted for. This was explained as a decision to pay a certain expense out of a different pocket. He was told "it's not in any way, shape, or form a decrease or a defunding of economic development." I inferred Corcoran also liked that answer. In general, I thought Councilmembers spent more time asking questions without explicitly expressing an opinion about why they asked or what answer they'd prefer to hear.

Councilmember Curtis Dorian: "I really am happy to see the additional funding in the hotel, motel tax, and I support moving that $1 million to the general fund, which I think is exceptional."

He goes on to emphasize his support for funding Network, CARES, Citizen Fire Academy, Police Academy, the Home Improvement Incentive Program, and the ADA compliance funding. So we know where Dorian's priorities are and we know of his overall approval of this budget's support of his priorities. I support his priorities.

Councilmember Jennifer Justice: "Kudos to you and your team for figuring out how to make this work and really focusing on the things that the council has prioritized. I know it's priority for you, too, retention and infrastructure, public safety and I think it's smart to focus on economic development, too."

So count Justice as explaining her priorities and satisfaction with the spending levels in this budget. I support her priorities, but with a desire for a keener examination of how we're spending more money for public safety and what the results of that are.

Mayor Pro Tem Arefin: "I'm going to ask you one little technical question to understand. That is that Mimosa Park light upgrade that you have...can you explain that?"

Magner's explanation: "This will give residents who have the authority to go out and practice on the fields the ability to turn [lights] on and off."

Arefin pivoted to a bean-counting matter, asking the impact of converting office buildings to multi-family residential on the balance between property taxes coming from commercial properties vs residential. Magner said multi-family residential property taxes already are accounted for on the commercial side of the balance. OTOH, if an office building is demolished and replaced by, say, townhomes, that would affect the balance.

Arefin expressed satisfaction with the increases in public safety, infrastructure maintenance, and the increase in the senior citizen property tax exemption. I support his priorities, too, but again with the qualification of wanting a better analysis of our spending on public safety.

Councilmember Ken Hutchenrider: "I think we had a chart in addition showing what the overall amount of commercial versus residential [property tax revenues]. We also had a chart that showed [a comparison with] area cities. Is there any chance that we could try and get that again?" Good request. Magner said he'd add the information.

Hutchenrider asked, "I know we're right now in the middle of the Aquatics assessment... Are we saying that we're going forward with the pool resurfacing at $335,000 even though we're doing the Aquatics assessment? Magner answered yes. Any action coming out of the Aquatics assessment could be years away from implementation, and the pool resurfacing is needed in the meantime.

Hutchenrider offered a self defense for pushing for an increase in employee raises from 5% to 6% in last year's budget. Because I've written about that several times here, that part of this meeting's deliberations is broken out into its own blog post: "Ken Hutchenrider Defends Himself".

Councilmember Dan Barrios: "On 'Public Safety-Police', Community relations and program" a $10,000 increase...So I wanted to just kind of say, great job."

Barrios sounded sincere, but I would have had trouble complimenting minimal compliance. The same slide showed a thermal drone ($17,000) and 'bait vehicle equipment' ($14,000), and over a million dollars in other police spending. Adding $10,000 for community relations seems to be the bare minimum we can do to strengthen police-community relations, which is the bedrock of public safety, benefiting both officers and citizens.

Barrios also asked for an explanation of a detail on another item: "On 'General Government', the second point reads 'Strategies to broaden diversity of applicants on boards and commissions.' Was this tied to something specific?"

Magner explained, "It's providing Amy with some additional resources to continue her outreach...to have funding available, it's not much, to have funding available to try new things to improve the diversity of the candidate pool that we're able to bring you guys." Good for Barrios for reminding Magner of this priority of the City Council, or professed priority anyway. Barrios' question is evidence that he understands that unless you budget for something, it might not be that important to you. But Magner's qualification, "it's not much", suggests that this, too, could be more a case of minimal compliance than an indication of a real priority.

Justice: "It's a priority of ours to to make sure that all of our staff are at a living wage. And so I very much encourage you to do that. If we have a better year than we're anticipating that's exactly where I would hope that you would go with those excess funds."

Magner is aligned with this, saying "it's a huge priority of mine." Good for them. Maintaining a living wage should be a priority.

Justice; "Just a question on the storm impact. We were talking about millions of dollars that we weren't anticipating... We're hoping to get some of that back from the government and FEMA and all those sorts of things, but how are we handling that? Is there going to be potentially any spillover to the budget this year or two?"

Magner said, "That was all paid out of a reserve fund that we have. It's a reserve for situations just like this or similar and so, hopefully we will be able to recuperate approximately 75% of the total expenditures and we'd like to put it back in that reserve fund." He didn't specify a dollar figure for the cleanup costs, either in total or after any reimbursement. But it sounds like the storm impact on our budget will pass, just like the storm itself has.

And then, after a couple of questions about "Tree the Town", er, "Replant Richardson", which didn't concern the budget, the Mayor recessed the Budget Workshop, or at least Day 1 of it, which focused on the General Fund. Day 2 covered the other funds, which I couldn't think of anything worth adding to Day 1's report. So that's it from here on the budget.

Quotes used are ones for which I have comments to add. Quotes have been lightly edited for clarity and brevity.

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"City's budget tight.
Sales taxes down, houses save.
Plans resilient."
—h/t ChatGPT