The Odessa City Council approved its FY24-25 budget, a property tax revenue increase and rate increases for water, sewer and solid waste Tuesday night, but not before hearing serious concerns raised by ousted ODC President Kris Crow and Vice President Jeff Russell.
According to City Finance Director Kaylie Banda, total revenues are budgeted at $282 million for next year and total operating expenditures are budgeted at $278 million. The budget includes $27.4 million for capital projects and a fund balance of $272,146,000.
She also said the city needed to increase its water and sewer rate by 3% each and the solid waste rate by 3.5% to cover the rising costs of equipment, debt obligations, maintenance and repairs.
As for the property taxes, the rate will be $0.466275 cents per $100 valuation.
Crow and Russell approached the podium multiple times to question the council members as each topic was its own separate agenda item.
Crow repeatedly told the council their numbers simply don’t make any sense.
The men, who were just recently removed from the Odessa Development Corporation by a majority of the council members, pleaded with them to keep the property tax rate at the no new revenue rate to help property owners struggling with inflation since there is a $272 million fund balance.
“I’m frankly very confused about that when we’ve heard for years the city can’t do this, can’t do that, can’t do something because we don’t have any money. $272 million is basically a whole year’s worth of budget,” Russell said. “The Government Finance Officers Association recommends two to three months as a fund balance.”
Crow agreed, saying Odessans need some relief.
“You’ve got $275 million in the bank across all of your departments so with that being said, it doesn’t make sense to keep raising the property tax rates,” Crow said.
Mayor Javier Joven said at the time the city council had its retreat, they didn’t know where they were with their fund balance.
“We didn’t have anything to be able to consider. We weren’t aware of this. This is something that just came up recently. So, you know, to be able to start over, we just don’t have the time. We’re under a time constraint,” Joven said.
City Manager John Beckmeyer said that because of the fund balance, the city will be able to address some of the city’s infrastructure needs, especially in the wastewater area.
Joven said Banda and the rest of the finance staff will explore what the city can do with that money. “We have some big budget items. We have a Bob Derrington (plant) that we have to deal with and (if) there is room to be able to use those funds or not, then we should use it,” Joven said.
The mayor also pointed out the city needs to figure out where they need to be when it comes to having emergency reserve funds.
Councilmember Chris Hanie voted against the increase and said there are things on his side of town that could be fixed with the surplus.
“I think we need to stop all of the increases on the water. I think we need to stop all the increases on the water, sewer and all the trash. We have ample enough money for this year, I’m ready to give the people a break,” Hanie said. “I’m a taxpayer. I’m ready for a break. Every year, my taxes have gone up year after year after year.”
When it came time to discuss the FY24-25 budget, Crow asked the council how they could budget 1.7% less than last year for water and sewer revenues when they’re asking for a combined 6% increase.
“How can revenues drop when you’re raising the rate?” Crow asked.
“What’s the point you’re trying to get to?” Joven asked.
”My point is it’s impossible,” Crow said.
When Joven and Crow began talking over each other, Councilmember Mark Matta reminded them council cannot comment during citizen comments.
There was then a debate over whether Crow could bring up questions on water, sewer and solid waste rates during the budget discussion. He insisted he could as they were related, but then Joven pointed out he was past his three minutes of allotted time.
“We have tons and tons of man hours going to the budget, but the citizens get three minutes to speak on something that…”
Joven then interrupted Crow, saying he was well aware of the rules.
Councilmember Denise Swanner thanked staff for their hard work, noting it’s because of them the city has a fund balance and will be able to address some projects. Councilmember Steve Thompson agreed, but said the city would still need to be prudent.
On that note, Russell got up to speak again and questioned why there was a 99.5% increase in the city secretary’s budget, a 45.6% increase in the city manager’s budget and a 75.9% increase in planning and development. He pointed out most of the increase in the city manager’s budget was due to all of the public relations positions within the office, which amount to a $1 million increase.
“I would really like to encourage the council taking a look at that to determine are we a city government? Or are we a public relations firm? It seems like a very excessive amount as a taxpayer for us to be spending on PR personnel within the city management,” Russell said.
At Matta’s request, Beckmeyer explained his office saved “well in excess of $1 million” by consolidating such things as software licenses and advertising. He also pointed out various people have been brought into the communications department from elsewhere in the city, including an event planner.
“The communications department now is doing all of the communications for the city itself. We’re also handling all of the advertising and promotions out of this communications department,” Beckmeyer said. “So again, it’s a pretty neat red herring to throw out there and chase without asking any questions and going deeper into it and it’s easily accounted for.”
When the solid waste increase came up, Crow again came to the podium to say the city’s numbers don’t make sense. In this instance, he said the city budgeted a 3.5% increase, but they budgeted an increase of 15.1% in revenues.
“The point is, it’s mathematically impossible. So my whole point here is that your budget isn’t matching up with your numbers. You’re saying we’re going to raise rates by this much, but my revenues are going up by this much…the budget just doesn’t make sense so I’d encourage you to go back and look at the numbers and do an amended budget.”
In other matters, the council:
- Approved the purchase of two automated side load trucks and one roll-off truck for the solid waste department at a cost of $1.1 million.
- Agreed to replace a bucket truck in the traffic department for $187,300.
- Approved the purchase of a Ford F-550 for the traffic department for $193,000
- Gave staff permission to replace four aging valves for the elevated water tower on Dawn Avenue north of 52nd Street. The estimated cost is $67,680.
During the council’s work session, Beckmeyer told the council that once he reads it over one more time he intends to sign a memorandum of understanding with Centurion, the company that will be taking out revenue bonds to pay for the city’s new $70 million sports complex.
Beckmeyer explained the MOU states Centurion must meet certain milestones before being paid. He also said they’ve learned the Texas Attorney General’s Office does not need to get involved in the process.
“From our standpoint, we don’t care where they get the bonds. It’s not our business. We have a lease with Centurion and bond council and bond advisor are both comfortable with that. We don’t need to go to the Attorney General. That was the last question that we had on this,” Beckmeyer said. “ So it’s cleaned up, and all I’m asking for is consensus. I’m also somewhat obsessive compulsive. I’m going to go through it one more time before I sign it, but I wanted to update you all on that before we executed this.”’
Once the MOU is signed, the title of the property can be transferred from Larry Bell, who agreed to donate 100 acres to the project, Beckmeyer said.
“Once that’s transferred, then we will work with the foundation to go ahead and establish everything they need, because they’ll feel more comfortable about moving forward at that point,” Beckmeyer said.
He said there’s equipment “sitting out there ready to move dirt” and Oncor has committed to “working every week” to get a power line on the property moved.
