A hiring freeze, a voluntary separation program and several other cost-cutting measures may have saved the jobs for the staff who remain at Denton City Hall.
In addition, the City Council agreed to suspend utility cutoffs as COVID-19 cases surge in Texas, creating terrible uncertainty for many Denton families. Council members did an about-face after learning that 1,500 families could lose access to water and power in the coming days if they didn’t hit the pause button on plans to get back to normal collection plans.
Senior staff members took about three hours to brief the City Council on all things budget Tuesday afternoon — talks that included some revised revenue projections from the pandemic-induced downturn.
Projections aren’t so bleak as to require property tax or utility rate hikes to keep basic services running, according to David Gaines, the city’s finance director.
“Revenues are still trending below budget, but they are still quite a bit higher than what we said in April,” Gaines said.
In April, city staff anticipated a major slump in sales tax collections and much lower utility revenues. They also didn’t anticipate any federal relief. Since then, county officials agreed to allocate about $7.6 million in federal CARES Act funding to the city.
The allocation helps meet unexpected expenses related to the pandemic, Gaines said. The city has spent money on everything from extra cleaning and personal protective equipment to underwriting hotel stays for nearly 100 people who were staying in the city’s homeless shelters when the pandemic began.
Some of the cost-cutting measures included restructuring the city’s ongoing capital improvements projects — road work, water and sewer lines, and building construction and renovations. Nearly all that work is debt-financed and takes about one-third of the annual property tax rate to repay.
The city still needs to issue about $8.9 million in new debt to finish the projects promised in the 2012 and 2014 bond elections, but the staff said they expect that work to be finished this year.
Repaving West Hickory Street from Welch Street to Carroll Boulevard is one such long-running project that will be finished before the end of the year, City Engineer Todd Estes told council members.
(But quiet zones along the Union Pacific rail line remain on the drawing table waiting for the railroad to respond, he said.)
To help save more money, the city also changed how it issues the debt and pushed back one more year, finishing in 2023, some of the later projects of the 2019 bond election.
Perhaps the biggest savings is coming from a hiring freeze and voluntary separation program. More than 200 jobs are vacant. City Manager Todd Hileman said that each position is being reviewed before any vacancy gets filled.
Currently, the finance staff anticipates that about 100 of those jobs won’t be refilled and will be eliminated from future budgets.
After learning that the bicycle and pedestrian coordinator job is vacant, City Council member Deb Armintor asked for more information about whether the job cuts would also mean cutting programs the community finds valuable.
Hileman pledged to show council members how city programs were being reorganized, including how any regulatory requirements would still be fulfilled — a concern expressed by council member Jesse Davis.
The bottom line for home and business owners could mean a bit of relief from the city. The city plans no increases in utility rates, which means electric, water, sewer and garbage bills could remain about the same for the next year.
The city is also planning a slight cut in the tax rate next year, which could offset any increase in property values.
This year, the city assessed 59.045 cents per $100 property valuation, which came to $1,470 for the average $248,909 home. Next year, the city is considering a rate around 57 cents per $100 valuation. Because the average home value has risen to $261,354, the tax bill for that average-valued house will still rise about $20.
The long-term impact of the pandemic will likely hit property values next year, Gaines said. The city does not expect the property tax rolls to increase much at all in the coming years, particularly compared to years past.
Council member Paul Meltzer said that in relation to less dire economic projections, the continued unemployment rate has given him pause. He wondered whether the federal government’s relief packages have brought temporary relief and masked the long-term economic impact.
“It’s just a matter of eyes open,” Meltzer said.