Crime casts shadow over tonight’s budget decision
Tonight, at a special meeting of the West University Place City Council, the elected body will adopt a budget for 2017 and approve a tax rate to fund that budget.
The meeting will begin at 6:00 p.m. in the Municipal Building at 3800 University Blvd.
A consensus of the city council appears ready to approve the hiring of two more police officers and the funding for two intersection surveillance camera systems to aid the West University Police Department in the detection of crimes. Councilmember Brennan Reilly is against purchasing the surveillance camera systems.
West U has 24 police officers, under the proposed 2017 budget, that would increase to 26 officers.
However, two council members, Reilly and Bob Kelly, want to fund these costs by taking money from emergency funds. These funds, called reserve funds, are like a savings account – for special occurrences such as natural disasters, and unplanned expenses.
Mayor Susan Sample disagrees with Reilly and Kelly, “No reserve fund should be raided to reach an arbitrary tax rate number. Our pay-as-you-go system and emergency reserve funds help stabilize the burden of replacing items the are expensive, but not costly enough to merit issuance of debt, and all the associated expenses. Our reserves show that West U has planning foresight, which is part of the reason we have such a stellar bond rating.”
The Government Finance Officers Association agrees with Sample. The GFOA recommends that municipalities keep a reserve balance in its general-purpose operating fund of no less than two months of regular general fund operating revenues.
Currently, West U’s budgeted reserve for it’s general-purpose operating fund is 20% of estimated revenues – which amounts to 73 days.
The rationale behind the extra 12 days of emergency funding is that West U is a small Gulf Coast city and is vulnerable to natural disasters.
This reserve fund has served West University Place as a literal “rainy day fund.” Hurricane Ike was a powerful tropical cyclone that swept through West U on September 1, 2008.
Reserve funds were used as emergency cash to fund the city’s problems associated with Hurricane Ike, to the tune of almost $1.2 million. About $1.1 million was reimbursed to West U by the Federal Emergency Management Agency, albeit about a year later.
As it relates to West U’s Water, Sewer, and Solid Waste Enterprise Fund, the GFOA recommends that the reserve balance for working capital never be less than 45 days of operating expenses.
West U’s budgeted reserve for the Water, Sewer, and Solid Waste Enterprise Fund is 36.5 days, already less than the GFOA “best practices” recommendation of 45 days.
Both Kelly and Reilly advocate spending these reserve funds to finance the two more police officers and the two intersection surveillance camera systems.
Sample and Councilmember Mardi Turner want to keep the reserve fund balances and pay for the new spending with tax revenues.
So Councilmember Burt Ballanfant will likely be the swing vote in tonight’s decision on how to fund the new police department spending.
Proposed 2017 budget
The proposed budget for 2017 spends $43,307,947. This amount includes general operations, water and wastewater operations, solid waste operations, and debt service for the year beginning January 1, 2017, and ending December 31, 2017.
On September 12, the city council adopted a preliminary tax rate of 31.68 cents per $100 value; last year’s rate was 33.179 cents per $100 value. Because of the 7.79% increase in property values, this tax rate reduction still would result in a tax revenue increase.
The proposed rate would result is an average 1.8% increase in West U taxes for each homeowner or $8.44 per month.