The Sherman City Council on Wednesday held the last of four biweekly meetings designed to examine the city’s long-term budget needs. The final meeting in the series was focused on fiscal topics including compensation for city staff, fleet maintenance and the city’s budget outlook. Council members’ previous topics of discussion were flood mitigation projects, improving fire safety and upgrading the city’s water treatment plant.

The Sherman City Council on Wednesday held the last of four biweekly meetings designed to examine the city’s long-term budget needs. The final meeting in the series was focused on fiscal topics including compensation for city staff, fleet maintenance and the city’s budget outlook. Council members’ previous topics of discussion were flood mitigation projects, improving fire safety and upgrading the city’s water treatment plant.


The meeting series was orchestrated by Sherman Mayor Cary Wacker as a kind of "buck stops here" effort to face head-on the city’s infrastructure needs for the next decade. And speaking of bucks, it turns out city leaders will need plenty of them — about 73 million, in fact — in order to address a wish list of civic upgrades to shepherd Sherman through an expected population spurt in coming years. Wednesday’s meeting was the first opportunity for councilors to peek behind the budgetary curtain and see what kind of fiscal wizardry will be required to meet those challenges.


Both Wacker and Chief Financial Officer Robby Hefton led off the meeting with kind words for city employees, noting that local government is nothing if not a service organization. From there, Hefton walked the Council through several conclusions from a study on Sherman’s rank among its regional peers for employee compensation. Hefton said the results of the study were largely positive.


"For the most part, we found that we’re in line," said Hefton. "For the vast majority of the (positions), we were right in the middle of that range or slightly above, which is right where we want to be. …. So the take-away from all this is, we feel like we’re doing a fairly good job across the board, but there are some tweaks that are needed."


Chief among the areas of concern is a lack of qualified applicants for the city’s seven open police officer positions, said Hefton. Sherman has struggled to maintain staffing levels and is currently expanding the reach of its advertising and rethinking a handful of employment policies — both areas recently detailed for the Council by top cop Otis Henry.


The second portion of Hefton’s presentation focused on fleet maintenance, a budgetary item hit hard during the recession. The CFO explained the city needs to invest approximately $800,000 each year in order to repair and replace aging vehicles, although that number fell precipitously, to barely $200,000, three years ago after the national economic slowdown.


"We have 250-plus units in the fleet, so that’s a tremendous burden on our fleet maintenance shop to keep those things on the road," said Hefton.


The presentation emphasized that a regular flow of funds toward fleet maintenance is essential in saving the city money in the long term, pointing to the $190,000 in interest charges Sherman will have to pay on a recent, $1 million fire truck loan. Hefton said those costs will be incurred because money for the purchase was not budgeted ahead of time.


One slide from the presentation, in particular, would have been of interest to budget hawks, as Hefton showed that city leaders had cut the general fund over the last five years, after adjusting for inflation. Hefton explained the city is spending approximately $3 million less per year in real dollars than it did in 2009.


From there, the presentation shifted from the hypothetical to the practical, and Hefton’s inner budget geek really began to shine. The CFO said the city has three options for raising funds to pay for projects, namely one-time cash infusions, utility rate increases and specialty fees such as storm water levies.


Of the first of those, the City is currently enjoying a temporary influx of cash due to the personal spending of the 800 construction workers at the Panda Power Plant. The high staffing levels at the plant as crews work to wrap the nine-figure project have translated into double-digit jumps in sales tax receipts, said Hefton.


"Sales tax for the last 12 months and for this fiscal year is going to be up about a million dollars (more than) what we budgeted, and that is primarily the Panda effect," explained the CFO. "It’s not only the effect of their direct spending on construction of their plant, but they’ve also had 600, 700, 800, 900 employees here that go eat at Taco Bell and shop at Walmart and do those things. We don’t know exactly what that indirect effect is, but what we do believe is those effects are the major contributor to what our sales tax jump has been for 2014."


The city will reap additional financial benefits due to a pair of changes in the plant’s construction: increased megawattage at the plant means the property tax valuation could reach as high as $500 million, said Hefton, or 40 percent more than originally estimated. Also, an uninterrupted construction schedule has meant the plant should come on-line several months sooner than expected, meaning an extra $300,000 in water revenue for the city.


All told, the city of Sherman’s general fund income for fiscal year 2013-2014 is tracking about $0.75 million over budgeted amounts. And beginning next year, the Panda plant will provide city leaders with somewhere between $975,000 and $1.8 million each year, depending on final valuation and water usage.


Come April 18, when the formal budgeting process will begin in earnest, it will be up to the City Council to determine how they want to spend the cash.