City leaders hold annual budget talks

July 16, 2014

At its annual budget workshop today and tomorrow, city leaders will discuss major projects that are on the horizon.

Among them is the long anticipated airport expansion, as well as a new water treatment plant, the voter approved sale of the city’s electric company and the building of a free-standing police station.

Currently, the Granbury Police Department is housed in cramped quarters inside City Hall.

“The city’s growing, and we have a lot of upcoming issues that we need to address in this budget,” City Manager Wayne McKethan said Monday.

“Many big issues are coming forward, such as the airport, the police station, the water plant… These are all major expenditures that we need to address the funding on.

“We (city staff) have come up with an approach that addresses those issues, we feel, and the council simply needs to have input into that process.”

Budget materials prepared for the workshop show the projected effective tax rate for the 2014-2015 fiscal year to be 0.39999 cents per $100 valuation. That number is up slightly from the current tax rate of 0.394593.

The effective tax rate is what the tax rate needs to be for the new fiscal year in order to put the same amount of money into the city’s coffers as the current year.

McKethan, whose contract expires in January, said he has offered to prolong his retirement another six months to move the city’s major projects further along and to help make the transition smooth for whoever is tapped to be the next city manager.

The City Council has not yet made a decision on whether to extend McKethan’s contract or on how a search will be conducted for a new city manager.

The budget workshop is at the Granbury Resort Conference Center. It is open to the public.

The Schedule

Today, presentations begin at 8:30 a.m. with an overview of the city’s financial status and the current economic environment.

It will be followed by “Budget Assumptions & Strategies,” then a discussion of personnel issues and a strategic plan overview before the lunch break.

According to McKethan, a 3 percent raise for employees is part of the proposed budget, but raises for elected officials are not part of the plan.

The afternoon’s discussions will involve: departmental presentations; the planned water treatment plant; the sale of the electric company; whether to reinstate the Convention and Visitors Bureau; and a report on a tourism marketing study that was commissioned by the city.

Topics to be discussed in Thursday’s session include: bond fund utilization; the new police station; economic development; town square development; a departmental expense review; the utility fund; and council requested projects.

Also on the schedule for that day is whether the council should adopt a resolution approving an application for funding through the Texas Department of Agriculture Texas Capital Fund Program on behalf of Mesquite Pit Steak and Barbecue.

The restaurant will be built at the site of the old Brazos Motel, on the shore of Lake Granbury on East Pearl Street/Business 377.

The Department of Agriculture provides zero-interest loans through the Capital Fund Program. McKethan said that start-up costs for the restaurant turned out to be more than the restaurant owners had anticipated.

“The issue here is that the city would have to put its credit support behind it. The city will be the backstop,” the city manager said.

Asked if it is unusual for the city to support a restaurant in such a manner, McKethan stated: “It’s a new thing, and that’s why we’re bringing it before the council.”

He said the restaurant will employ 40 to 50 people.

The Airport

The airport expansion – which is being funded largely through grants, but also with $4 million in city funds – has been a slow process, but progress is being made.

County Court-at-Law Judge Vincent Messina, who handles condemnation cases, has created commissions made up of real estate experts to help settle disputes regarding the sale price of five parcels of land needed for the expansion.

McKethan said that, even if lawsuits are filed to contest the land values as determined by the commissions, the suits will not hinder the project from moving forward.

the police station

A consultant hired by the city will give a presentation about the police station.

The consultant has “done an analysis of where (the police station) should be and what it should look like – something that will meet the city’s needs for the next 10 or 15 years,” McKethan said.

He added that there will be $200,000 to $300,000 in engineering costs “that we’ll put into a bond. That will be a big discussion in the budget process.”

The EDC

For a number of years now, the city and county have each contributed $100,000 annually to fund the Lake Granbury Area Economic Development Corporation.

That may change.

McKethan said the county is looking at a different way of funding the EDC.

County Judge Darrell Cockerham, who sits on the EDC board along with fellow Commissioners Court member Jeff Tout, confirmed that a proposed plan is in the works.

The judge gave an explanation when commissioners broke for lunch Monday after having spent the morning in their own budget meetings.

Cockerham said that Tout is compiling information to present to the Commissioners Court about the alternative funding plan.

The plan would involve a slight increase in sales tax, but only in the areas of the county that are not already at the maximum. Granbury, he said, is at the maximum and would thus be unaffected. He said the increase would be 1/8 or 1/4 of a cent.

“The EDC would then have money that they can count on,” Cockerham said. “Every year, we don’t know how much money we’re going to (be able) to give. We can’t guarantee it because we don’t know what the (property) valuations are going to look like. The EDC would be run like a business rather than having to depend on the Commissioners Court.”

Just the Beginning

The budget meetings this week for city and county elected officials are just the beginning of the budgetary process.

Both the city and county budgets will be adopted in September. The new fiscal year begins Oct. 1.

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