Budget Crunch Hits City of La Grange
La Grange City Council held their second workshop on next year’s budget at a meeting on Monday, Aug. 14.
The budget stands at $18,166,535 for next year, with $12,208,638 of that in the utility fund. The utility fund pays for the City’s businesslike enterprises such as electrical, water and sewer services. The General Fund, which pays for the City’s governmental activities such as police, parks and administration, stands at $5,656,050.
The utility fund is up 11.26 percent over the current year. The General Fund is down slightly by 0.09 percent. The overall budget is up 7.43 percent.
Most of the City’s revenue comes from utility sales. Property taxes represent a little over 10 percent of the revenue in the general fund. The proposed property tax rate will go down slightly from $0.2093 to $0.18668 per $100 of taxable value. However, the City will collect $62,805 more in taxes due to rising property values, a 7.64 percent increase, with just over $12,000 of that coming from new property added to the tax roll this year.
Councilwoman Violet Zbranek discovered a clerical error in the budget. The line item for fuel in the electrical department listed only $1,400 in planned expenses. The department budgeted $13,000 for fuel in the previous year. City Manager Fred Bell said the number was missing a zero and would be corrected.
Councilman Ken Taylor said the City may need to budget more for fuel in all departments next year since fuel prices are on the rise.
Taylor also raised a concern about revenues from the City’s MuniGas enterprise. The City established the MuniGas business many years ago.
MuniGas acquires mineral interests and natural gas contracts and sells gas production through the City of La Grange, as a purchasing agent, to several participating cities. The arrangement has been very profitable for the City over the years, and the City has traditionally placed revenue from the enterprise into capital improvement fund. Those funds have been used for capital expenses, large non-recurring expenses and matching funds for grants. Taylor questioned large transfers in the budget from the capital improvement fund to the General Fund.
“Someday, I don’t know when, but someday we’re going to get bit,” Taylor said. “Tax rates are going to have to increase substantially to cover us on the O&M (operations and maintenance) side. We were never supposed to use capital money to fund O&M, but we are. I think the rest of the Council needs to hear that loud and clear – we are banking on capital money to pay our O&M budget,” Taylor added. “That’s going to come back and get us.”
Council will hold a public hearing on the proposed budget Aug. 28 at 6:15 p.m. at the City Hall Council Chamber.
In other business at Monday’s meeting, the Council delayed action on a variance request from Robert and Julia Hill to subdivide property at 345 and 347 East Lower Line St. The Hills own two rent houses on the property. They wish to divide the lot and sell the two houses separately.
Robert Hill spoke at the meeting and said he hopes to sell the homes to families who intend to live there. Splitting the lot would place the property line about two feet away from one of the homes. City ordinances require a five-foot setback. Council members Zbranek and Taylor raised concerns about granting a variance to the rules. Hill said that he has rented both houses for many years and never had a problem between neighbors over the boundary. Hill said the two homes would provide much-needed affordable housing in La Grange.
“With property values going up, we need affordable houses in town,” Hill said.
Councilmembers Bonnie Busch, Katie Gross and Kim Newton were absent from the meeting (those three members all have children in school and Monday night was Meet The Teacher Night at La Grange I.S.D.). Council decided to delay action on the Hills’ request until all of the Council members could be present.
Council unanimously approved a replat request for the Round Top State Bank property by Diers Development Co. Diers Development developed the property where the bank stands at 2010 W St. Hwy. 71. and had a 25 year lease with the bank. The lease is nearing the end of its term and Round Top State Bank wishes to purchase the property. The Council also deferred action on signing an updated agreement for School Resource Officers with La Grange I.S.D. The school proposed a new agreement in response to recent changes in state legislation.
In other business, the Council voted unanimously to rescind the City’s juvenile curfew ordinance in order to comply with state law. The State Legislature passed a new law last session prohibiting cities from adopting or enforcing juvenile curfews.