Copperas Cove city council gets first look at fiscal year 2023 proposed budget

By BRITTANY FHOLER
Cove Leader-Press 

The Copperas Cove City Council received the nearly $52 million proposed budget for Fiscal Year 2022-2023 during their workshop meeting Tuesday evening. 
City Manager Ryan Haverlah walked the city council members through a presentation detailing the total budget, with a total beginning fund balance, or “rainy day fund”, of nearly $18.95 million, with $50.34 million in revenues and $51.97 in expenditures, including $1.91 million worth of capital projects in the General Fund, leaving a total ending fund balance of nearly $17.32 million. 
The city’s budget challenges have historically included having an annual operating deficit, but Haverlah said that this budget is the first budget in his time with the city that it is a balanced budget. 
“I have talked with city council over the last many years about the General Fund operating deficit that has existed, and this year will be the first year where we have current revenues and current operational expenditures balanced,” Haverlah said. 
The budget includes a three percent cost of living adjustment for employees plus the 2.5 percent Step Plan Program compensation for Public Safety employees. There are also market adjustments for administrative positions. 
The major funds in the budget include General Fund, Water and Sewer Fund, Solid Waste Fund and Golf Course Fund, which total $43.17 million of the $51.97 million budget. Fifty percent of the budget goes to the General Fund. 
The General Fund has a beginning fund balance of $9.79 million, with almost $19.63 million in revenues and almost $21.54 in expenditures, leaving an ending fund balance of approximately $7.88 million. The $1.91 million in capital expenditures in the General Fund are one-time costs, according to Haverlah. 
The main revenue sources for the General Fund are property taxes and sales taxes. The proposed amount of taxes for this budget is $14.17 million. Other revenue sources include permits and licenses, charges for services, fines, administrative reimbursements and miscellaneous revenue. 
The largest percentage of the General Fund expenses goes to Public Safety, with $13.82 million proposed in this budget, which is a 12 percent increase compared to the Fiscal Year 2021-2022 Budget. Other expenses in the General Fund include City Administration, Public Works, Development Services, Parks and Recreation and Non-Departmental. 
Of the $21.54 million General Fund budget, 72 percent will go to salaries and benefits, while eight percent will go to Capital Outlay purchases, seven percent will go to contractual services, four percent to supplies and materials, three percent to economic development incentives, three percent to maintenance and repair and another three percent to designated expenses.
“When we’ve talked over the past several years about trying to balance the budget, and we’ve talked about service changes, the reason we had talked about service changes is because it impacts the number of positions or personnel that we can actually fund if we want to balance a budget,” Haverlah said. “We’ve had significant growth in the revenue and then adjusting or shifting some of those expenditures to other revenue sources will actually allow us to maintain services without significant interruptions to those services.”

General fund projects: IT purchases, renovations of Municipal Court and LIbrary Chidlren's Room, new senior center design

The proposed budget will use some of the fund balance for $1,910,731 in one-time expenses, which include IT purchase of laptop computers, desktop computers and servers; the renovation design and carpet replacement for the Municipal Court; $158,246 for the design of a new senior center; $94,000 for the renovation of the Children’s Room at the Copperas Cove Public Library; overtime for Live Fire Training for the Fire Department; the purchase of an ambulance for $300,000; $800,000 for the expansion of Fire Station #3; patrol rifles for the Police Department and other equipment for different departments. 
Other expenditure changes include reallocating 1/8-cent from the sales tax revenue received by the Economic Development Corporation to Street Maintenance, which would reduce the Street department costs by $550,000. This allocation has to be approved by voters though, and the item is expected to be placed on the November 2022 election ballot. The Street Department personnel expenses have also been moved to the Street Maintenance Fund, reducing the Public Works expenses under the General Fund by 79 percent. 
The Water and Sewer Fund has a beginning fund balance of $6.02 million, with $15.54 million in revenues and $14.99 million in expenditures, showing an increase in revenues compared to expenditures. Its big expenditures include Public Works Administration, Utility Administration, Water Distribution, Sewer Collection. Wastewater Treatment and associated expenses with the city’s different treatment plants. 
Of the Water and Sewer Fund revenues, 51 percent comes from water revenue, while 42 percent comes from sewer revenue and seven percent comes from other. 
Water purchases make up 17 percent of the Water and Sewer Fund expenses, and the debt service payments make up 32 percent. 
Haverlah shared that the cost of water continues to increase.
“We expect that from this year to next year, the cost of that water is going to increase by 9 percent, and those are the rates that Bell County WCID #1 has already adopted and moved forward with for next fiscal year,” Haverlah said. “As we have talked in the past, the capital projects that we expect in the Water and Sewer fund, a number of those specifically being done by Bell County WCID will also increase our cost for water, and so as we continue to work through the rate analysis, we will be bringing those up specifically, and very soon we’ll be talking about the generator cost at Bell County WCID and the water treatment expansion project, both of which have significant capital costs.”
The Solid Waste Fund has a beginning fund balance of $2.37 million, with $6.28 million in revenues and $6.27 in expenditures, leaving an ending fund balance of $2.37 million, meaning it has a nearly exactly balanced budget, according to Haverlah. Garbage collection fees make up 86 percent of the revenues in the Solid Waste Fund. Disposal costs make up 22 percent of the expenditures for the Solid Waste Fund, with hauling and other costs at the Transfer Station making up another combined 20 percent of expenses. 
Even the Golf Course Fund, which has been in the negative for over a decade, has seen an increase in revenues over expenditures. The Golf Course Fund has a beginning fund balance of   -$1.21 million, with $419,840 in revenues and $359,520 in expenditures, reducing that ending fund balance to -$1.15 million. 
The Other Funds, which includes several smaller funds, has a beginning fund balance of $1.97 million, with $8.46 million in revenues and $8.79 million in expenditures, leaving an ending fund balance of almost $1.65 million. 
Included in the Other Funds is the Drainage Utility Fund, the Street Maintenance Fund, the Hotel Occupancy Tax (HOT) Fund, Parks Improvement Fund, and the Interest and Sinking (Debt Service) Fund, to name a few. 
Although the water and sewer rates are not set to increase or change, the solid waste rate is proposed to increase by 12.77 percent, or by $2.53, from $19.83 to $22.36. Commercial customers would see their bill increase by $5.27, going from $41.31 to $46.58.
The council will meet again next week on Tuesday, June 14, where they will take a deeper dive into the budget and go through the budget fund by fund and department by department. June 16 and June 21 are also scheduled as potential workshops if the city council needs them. 
There will also be a special workshop on June 30 where the city council will hear requests from non-city organizations requesting funding from the General Fund or from the Hotel Occupancy Tax Fund. During this meeting, the council will also discuss fee schedule changes. 
The city council will hold another special workshop on July 26 to discuss the new tax rate, and on July 28, they will hold the first public hearing for the proposed budget, a public hearing on the tax rate and officially propose the tax rate. 
Then on August 9, the city council will meet again to approve and adopt next fiscal year’s budget, tax rate and other related items.