FY 23 budget proposal addresses challenges while focusing on public safety and other core services

By Bryan C. Woods, City Manager

The City of College Station’s FY 23 budget addresses the challenges faced over the last two years, provides critical resources to maintain high quality services and positions the community for growth in the future.

This year, we’ll operate in an environment with persistently high inflation, continued supply chain disruptions, a volatile economy, and a tight labor market. Those factors guided the development of the $410 million FY 23 proposed budget presented to the College Station City Council at a special meeting on Tuesday.

The council takes a more in-depth look at the numbers in a series of budget workshops next week (July 18-20). Following public hearings on the budget (July 28) and tax rate (Aug. 11), the council could adopt both as early as Aug. 11. (EDITOR’S NOTE (8/4): The tax rate pubic hearing and adoption for the tax rate and budget are now scheduled for the Aug. 25 council meeting).

The new fiscal year begins Oct. 1. 

The latest inflation data shows an 9.1% increase in the Consumer Price Index, the largest rise in more than 40 years. Meanwhile, the Producer Price Index has risen by 11.3%, and producer prices for goods have climbed by 16.3%. Consequently, the city’s operations – now and in the future – are significantly impacted.

Higher property valuations mean almost $5 million in additional city revenue, including about $727,000 generated by new value. About $3.1 million of that revenue goes into the General Fund, and the rest services our debt. Higher consumer prices also resulted in higher sales tax revenue.   

Because of higher values in our strong real estate market, the budget includes a one-cent reduction in the property tax rate to .524613 per $100 of value. At that rate, the annual property tax bill on the average College Station home ($324,300) would rise by about $183.

The dramatically higher fuel costs have resulted in considerable operating cost increases for all city departments. At the same time, market disruptions have nearly tripled the price of natural gas, resulting in massive increases in the electric utility’s purchase power costs. The utility also is recovering from paying $48.3 million – $1,120 per meter – on behalf of its customers after the 2021 winter storm.

Necessity leads to a proposed 10% increase in electric rates, licenses and permits, and fees for solid waste collection, roadway maintenance, and drainage. Meanwhile, water and wastewater rates will remain the same. That means the average utility bill would increase by less than $14 monthly.

The new revenue and strategically saved operational reserves allow us to add additional resources. More than half of the new positions in the General Fund are allocated to the Public Safety Departments.  The proposals include four Police Department employees (two officers), two police vehicles, eight Fire Department employees (seven firefighters), an ambulance, three solid waste workers, two solid waste vehicles, and a Northgate District coordinator to help enforce city codes, especially in Northgate. 

These additions and others outlined in the budget document are needed to keep pace with the service demands of our expanding population.

Like other employers, the city faces continuing challenges in hiring and retaining qualified employees. The proposed budget furnishes necessary resources for recruiting high-quality talent and achieving full staffing. It also provides a 4.5-5% cost of living adjustment to help retain our existing workforce in a highly competitive market. In addition, funding for other components of the city’s pay plan is allocated.

The FY 23 proposed net budget of $410 million includes $322.5 million for operations and maintenance and $87.6 million for capital projects. Most of the budget encompasses enterprise funds such as electric, water, wastewater, and solid waste. The $110 million general fund covers all other city services, with more than half covering the police and fire departments.

The proposed city budget reflects a strategic approach to maintaining core services while effectively managing current challenges, providing a high quality of life to our residents and preparing for future economic growth. We encourage you to examine the budget document and follow next week’s workshops through Zoom or the city blog to learn more.

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