Plano City Council Discusses Budget Process

By Mark Reid, PCC President

​(The following views are Mark Reid's only and, may or may not reflect the views of Plano's Political Pit Bull's owners or staff.)

In the City Council’s Preliminary Open Meeting on Monday, November 12th, city staff provided a year-end report. General revenue was reported at 2.4% ($8.2 million) higher than budgeted and expenses were reported at 1.5% ($4.3 million) lower than budgeted. As a result the city finished the fiscal year with just under a $13 million surplus. This follows a $4.7 million surplus in 2017, and an $11.1 million surplus in 2016. As staff reported “We came in a little over in revenue and a little under in expenses and that is not abnormal to how we usually perform.” 
These numbers actually represent very good forecasting and management by the city staff and City Manager. They also represent almost exactly what the Plano Citizens’ Budget Committee anticipated and discussed during the budget and tax rate discussion last summer. 
In the regular City Council meeting following the preliminary meeting, there was a discussion about the budget process. Councilman Grady began the discussion stating that “For the benefit of staff…” people should submit their ideas about budget adjustments NOW, rather than during the normal public review process in July and August. I’m sure the staff appreciates Councilman Grady’s sensitivity to the challenges they face in preparing the budget, his suggestion ignores the normal process. 
Even the City Manager recognized that staff does not ask the City Council for direction until March. Then the various departments prepare draft budget recommendations that go to the City Manager at the end of May. So the impassioned calls for input NOW seems like little more than a thinly vailed attempt to preclude public input during the established budget review cycle. 
There was broad discussion about how the budget should be based on service levels rather than some arbitrary number like the Effective Tax Rate. In fact, Councilman Grady said that “The Effective Tax Rate is the worst model … that he has ever seen in his life!” As justification for this statement, Councilman Grady went on to state that adopting the Effective Tax Rate “…means that you need less and less money every year…” Apparently, Councilman Grady does not understand how the Effective Tax Rate works. 
The mayor stated that “The idea that we set a tax rate to set a budget is not how we operate…” and that he would “…vehemently oppose … setting a tax rate and then … deciding on the level of service that we want to deliver.” He attempted to use a business example, but failed to complete his analogy. Business base budget decisions on revenue they can reasonably expect to earn in a competitive market place. They then go to work, finding ways to provide the level of services necessary to generate the revenue they need to be profitable in those competitive markets. If they fail, they go out of business. The city has no such competitive pressure. They simply set the tax rate to generate the tax revenue they want.  
Councilman Kelley expressed his concern about how we “Got bogged down with a citizens’ group” who looked at the budget and argued for the Effective Tax Rate. He then said that a comment was “…put out there … that [the city council] does not know how to run the City of Plano…” and that there were accusations about “… incompetency of the city staff…” No such accusations or statements were made by the Plano Citizens Budget Committee and I challenge Councilman Kelley to produce the source and record of such comments by anyone. Vilification of one’s opponents in a debate is indicative of weak arguments and only diminishes Councilman Kelley’s credibility. 
Councilwoman Prince expressed concern about the City Council “… playing its proper role …” and not “… micromanaging …” city staff. She expressed her view that the City Council should “… set the vision …” for the budget and not get bogged down in line item analysis. We agree. 
The City Council’s oversight responsibility does not involve minutia … it involves vision … a vision of excellence in city services with a focus on core functions of city government while keeping city property taxes in line with growth plus inflation. The Effective Tax Rate allows for growth but Plano property taxes have outpaced inflation by two to three times over the last several years. This is simply unsustainable and the City Council under our current mayor consistently refuses to take steps to mitigate property tax increases. 
Councilman Smith recommended a “zero based budgeting” approach, focusing on the city’s core needs like public safety and infrastructure first then prioritizing other services as needed. Councilman Smith also pointed out that had the City Council adopted the Effective Tax Rate it would have been the highest budget ever adopted by the City of Plano. Of course the mayor and his allies took exception to Councilman Smith’s suggestions. 
Councilman Ricciardelli suggested a process along the lines of budgeting to the Effective Tax Rate as a base, then adding additional services as needed. Councilman Harrison echoed such an approach. These recommendations were also dismissed. 
The mayor and Councilman Kelley commented on how adoption of the ETR would cause reductions in services or the elimination of departments, how “citizens” did not want the library to buy new books, and how there are those that don’t want us to invest in our parks. Plano tax payers would be far better served by a city council that engaged in reasonable discussion, prioritization, and direction of our city manager and staff than this kind of tax and spend hyperbole. 
Getting back to what we pointed out at the beginning of this article, city staff confirmed what the Plano Citizens Budget Committee pointed out last summer. The City of Plano normally over forecasts expenses and under forecasts revenue. This is good fiscal management and it leads to surpluses, year after year.  This is how the city is able to maintain surplus accounts roughly equivalent to the entire annual budget, well in excess of $500 million. 
The surplus from 2018 alone is equivalent to the savings Plano taxpayers would have enjoyed by adopting the Effective Tax Rate for 2019. No services would have to be cut! No departments would be cut! The libraries would still have been able to buy new books!  The parks would still be well maintained!  Nothing would have to be reduced … except the budget’s rate of growth. 
Plano Citizens’ Coalition applauds and thanks Councilman Harrison, Ricciardelli, and Smith for their support of transparent, fiscally responsible city government. It is unfortunate that our mayor, along with Councilman Grady and Kelley (and presumably Councilwoman Miner) fail to recognize that the city of Plano can remain a City of Excellence without tax increases that grossly outpace inflation year, after year, after year. It is high time for the Plano City Council to adopt a vision for the budget process that focuses on core functions of city government while limiting property tax and budget growth to no more than inflation and growth. After increasing property taxes and the city budget roughly 40% in the last five years, it is time to stop business as usual and adopt policies that protect Plano taxpayers.