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(THOMAS WALLNER | THE GRAHAM LEADER) Graham Mayor Alex Heartfield speaks to a community member during the first budget workshop for the city in February. The city held another budget meeting last week Thursday, May 22, where they discussed budget changes before the adoption of their proposed budget in July.
The Graham City Council met last week to continue budget discussions, with proposed increases to the property tax rate, water rates and sewer rates still on the table.
The city council met Thursday, May 22 to receive an overview of the proposed budget in its current form from City Manager Eric Garretty.
“This is the beginning of the budget process. You’re not setting a tax rate. We actually won’t do that until September. We’ll look at the numbers, we’ll refine the numbers, we’ll make adjustments,” Garretty said.
What is included in the proposed budget as it currently exists is a property tax rate increase of 6.1% from $0.665 per $100 valuation to $0.695 per $100 valuation.
Additionally, the in-progress proposed budget includes 7% increases to the water and sewer rates following a rate study contracted by the city. Garretty said rising costs and lower usage from customers is driving rates up.
“The bottom line is it’s costing us more to produce the same amount of water and treat the same amount of sewer. It’s just the cost of chemicals, the cost of everything that we need... continues to go up,” he said. “We’re at a stage where we need to make some cash capital improvements. ...Costs for doing these cash capital improvements are going up. We’re seeing increased cost for equipment replacement across the board.”
Street repairs of $860,000 are budgeted with $760,000 from the general fund and a $100,000 transfer from the garbage fund for street repairs. The city will also be budgeting $60,000 for manhole and cleanout replacements.
Also budgeted is $100,000 for a Possum Kingdom Lake water supply study to determine an alternative water supply to Lake Graham in the event of drought conditions. The city is also budgeting $240,000 for water storage tank repairs.
The in-progress proposed budget also includes a tiered cost of living adjustment for employees.
The city manager said with the base inflation rate trending downward, if the city does not give employees at least a 2.5% raise it will effectively be a pay cut.
“We previously set a base wage for city employees of $13.50. This budget brings that up 50 cents to $14 an hour. I would mention that even at $14 an hour in those positions, we’re still having trouble keeping people,” Garretty said. “As far as the percentage cost of living adjustments, 3.5% for police and fire, 1.5% for the top three. That’s myself, Marci (Bueno) and Melinda (Brown), and 2.5% for all other employees.”
The city has a total of 110 personnel, with 87 full-time employees, eight part-time employees, 14 city pool employees and one contract employee.
There are a total of $145,000 in requests that are not in the current proposed budget. Garretty said the city could have around $50,000-100,000 in available funding for those requests.
Things not included in the budget currency are replacement vehicles for GPD totaling around $92,000. The city leased five vehicles in 2020 and paid those vehicles off, but around five or six years into the life of the vehicle is when Garretty said you see increased maintenance expenses.
GPD is also requesting Flock Safety cameras which use License Plate Recognition software and would be included at every entrance to the city.
“It basically lets us know if a vehicle has been tagged, someone that is wanted,” Bullock said. “If it passes any point within our city, it automatically notifies us, whether they’re a child predator, they’ve been tagged as that, or if they have a warrant for their arrest.”
The city received a request from Graham Regional Medical Center to increase ambulance service from $50,000 to $75,000 per year due to rising operational costs. Likewise, the Humane Society of Young County asked for an $11,000 increase from $36,000 to $47,000 due to rising operational expenses.
The city’s Downtown Development District is also requesting $10,000 for a lighting project downtown. Garretty said he would include the requests for HSYC, the DDD1 lighting project, GPD cameras and one or two GPD patrol vehicles on the proposed budget.
The proposed budget currently stands at $49.3 million which accounts for all city funds including the general fund, water fund, sewer fund and other funds such as the Graham Municipal Airport, Library of Graham and Young County Arena.
In the general fund budget of $9 million, Graham Police Department, Graham Fire Department and the streets department make up 62% of that budget or $5.5 million.
The water fund is estimated at $6.6 million, with a total of $1.4 million allocated to pay off the debt on the water treatment plant.
The sewer fund is estimated at $1.7 million, with a total of $250,000 in transfers out for the sewer plant redesign project and the Pecan Street lift station rehabilitation.
Garretty said an almost 11% increase in market value of properties with the city limits move the total to $889 million. The freeze adjustable taxable rate of properties, which is what the city bases its tax rate off of, increased by a little over 10% to $539.7 million.
The city manager said increases are necessary to keep operations going within the city.
“The city has to buy good services and materials, just like taxpayers. The city’s cost to buy these goods and services, the materials, has been increasing for several years in a row, although we are seeing some moderation in inflation,” Garretty said. “That pricing inflation affects everyone, even cities. Just to keep doing what we’re currently doing,has gotten more expensive year over year for the past several years.”
What’s next
The city manager will continue to adjust the budget based on the city council’s guidance and will present the proposed budget at the Thursday, July 17 city council meeting.
The vote at that meeting will be only to approve the proposed budget. The proposed budget will be available for public review for 30 days.
Following that approval, the city council will have a first reading of the budget and tax rate ordinances and will need to determine the maximum property tax rate.
Public hearings will be set for the budget and tax rate. Following those public hearings the council must adopt the budget before the tax rate, which is scheduled for the Thursday, Aug. 28 city council meeting.
