Cutting Budget Proves Difficult For LG Council

It’s hard to cut government spending, even by a little. Just ask the La Grange City Council.

They spent over two hours Tuesday night arguing over a one-percent cut to the general fund budget - roughly $70,000 out of a $6.7 million budget. In the end, they decided it couldn’t be done. City Manager Jack Thompson, relying on the advice of the City Attorney, told the Council that there wasn’t enough time to make the cuts before state law requires the City to finalize the budget.

The Council held a special meeting Tuesday, Sept. 8, with just two items on the agenda: 1) a public hearing over the proposed budget for the next fiscal year, and 2) the first of two readings to adopt an ordinance setting the budget.

The overall budget jumped from $17,925,190 in the current fiscal year to about $20.3 million in the proposed budget for next year, a roughly 13.25 percent increase. Most of the overall budget is made up of the City’s utility fund, which came in at $11.9 million. It encompasses the electric, water, sewer and garbage departments. The utility fund pays for itself through the sales for those City services. Utility rates will increase this year to cover the rising cost of electricity and other utilities.

The general fund, on the other hand, depends greatly on sales taxes and property taxes for revenue. It pays for police, public works, general administration, finance, library, parks, Main Street, tourism, recreation, the building official and fire marshal. The general fund increased by about 10 percent, from $6,102,673 in the current fiscal year to $6,700,963 next year.

Tuesday’s meeting began with a budget presentation from Thompson. He noted that La Grange’s proposed tax rate for next year, $0.19075 per $100 of taxable value, is the lowest of eight comparable cities. The Council had proposed that tax rate as a “ceiling” Those cities included Schulenburg, Bellville, Sealy, Columbus, Brenham, Bastrop, Giddings and Smithville. Schulenburg had the next lowest at $0.26001 and Smithville had the highest at $0.75775.

At the same time, he said, La Grange offered the most amenities such as the number of parks, playgrounds, recreational facilities and the quality of the library and museum.

“We have the lowest tax rate, but we offer some of the most services of any of those eight cities,” Thompson said.

The City Charter requires Council to approve two readings for any ordinance. They took up the first reading Tuesday night. The second reading is scheduled for Sept. 14.

During the discussion, Councilman Ken Taylor said cuts of about $69,000 would allow the City to set a lower tax rate of $0.17819, which is the no-new-revenue rate. This rate would generate the same amount of revenues the current year.

“I hear from the constituents that I represent in the city,” Taylor said. “They’re worried about groceries, about gas, about rent, about utilities, about everything like everybody else in the whole United States. And I work for my constituents, not for the city. I believe its time that we start working for citizens and not them working for us.

Taylor went on to speak about the rise in tax rates and utility rates.

“I know that’s cumulative over time,” he said. “But somewhere in the chain between the locals, which we are, all the way to Washington, D.C., somebody’s got to step up and say enough is enough and we’re not going to go to the next highest rate for our citizens. I believe that should be us. We can’t expect Washington, State of Texas, Fayette County, or anybody else if we don’t do it ourselves.”

Taylor proposed cutting an open staff position in the tourism department along with some cuts to consulting services. He also proposed reducing or eliminating Christmas tree lighting.

“If I told people what that costs, they’d be shocked,” Taylor said.

In addition, Taylor mentioned printing costs associated with the professionally bound, full-color budget materials that the Council received for the meeting.

“I’ve been on the Council for quite a while,” he said. “Those are nice, but they cost money.”

“If you add up the things I mentioned … that’s about $71,000 that we could reduce,” Taylor added. “That takes care of the $69,000 this year.”

Councilman Bryan Kerr thanks Taylor for his suggestions. However, he said the City needs to find a way to balance the general fund budget without relying on transfers from the utility fund and capital improvement fund. Kerr said he supported a small tax increase.

“We don’t have a balanced budget that’s sustaining itself off our tax rate,” Kerr said. “And we could save the money like Mr. Taylor is saying, but we’d have to save a whole lot more to truly balance our budgets and not rely on the utility fund or the capital improvement fund. We’re restricting ourselves in future years if we don’t, honestly in my opinion, have the courage to allow a small tax increase.”

Councilwoman Kathy Weishuhn agreed with Kerr.

“We have put aside spending on things that need to be spent on, like taking care of City Hall, mold in our buildings, the condition of our buildings,” she said. “We have put aside a lot of things that we should have taken care of every year in order not to raise our tax rate. At some point, we’re not going to be able to keep doing that.”

Councilwoman Pam Giese said she supported the cuts Taylor proposed.

“I’m sorry, but there has got to be some fluff that can come out of this,” Giese said.

Taylor eventually moved to set the tax rate at the nonew- revenue rate and cut the necessary amount of funds from the budget. Councilman Dylan Schlotterbeck seconded the motion.

Weishuhn questioned the motion, since setting the tax rate was not on the agenda. The Council is scheduled to set the tax rate on Sept. 28. The Council discussed ways to amend the motion to focus on the budget cuts and not the tax rate. Councilwoman Bonnie Busch questioned whether there was enough time to amend the budget before taking final action on Sept. 14.

At one point, Taylor amended his motion to direct the City Manager to find $150,000 in cuts to the general fund budget.

Thompson eventually called City Attorney Alan Bojorquez for guidance.

“To vote on that motion is basically just to give the city manager instruction to come back with a different budget and different public notices because the motion is not specific as to where the $70,000 is to come from,” Bojorquez said over the phone. “And I don’t know that can be done with the timeline that we have left. So I understand the point of the motion. I just think it’s difficult legally to comply with the motion given the shortage of time that we have.”

State law does not require a new public notice if a city council decides to amend a proposed budget before final adoption. That’s the whole point of a public hearing – to give the public and the Council an opportunity to discuss and possibly ammend the budget.

The Texas Municipal League (TML), of which La Grange is a member, offers the following guidance on budgets: “Before adopting the proposed budget, the city council may make any changes it considers warranted by law or in the best interest of the taxpayers.”

Bojorquez suggested that the Council would need to either adopt the budget as proposed or direct Thompson to make specific line-item cuts. No one was willing to do that.

Eventually, Taylor withdrew his motion. It appeared he did not have enough support for either of his proposals to pass. Weishuhn moved to approve the first reading of the budget amendment as Thompson had proposed. Busch seconded the motion and it passed 6-1. Taylor cast the lone dissenting vote. Councilwoman Katie Gross was absent from the meeting.