Steady flow of water, traffic and money
2013 budget addresses problems, expensive fixes
The city of Beaumont is trying to keeping its financial house in order, despite the litany of expensive water and road projects on the horizon.
With a 5 percent increase in water utility rates and a 3.5 percent rise in taxable property values, the city is hoping to pay down much of its $200 million outstanding bond debt without raising any more taxes.
The city’s chief financial officer, Laura Clark, said the 2013 budget will not see an increase in city’s property tax, currently 64 cents per $100 in value. Approved at the City Council meeting Tuesday, Sept. 25, the budget sets about 18 cents per $100 of property tax strictly for debt service.
That means taxpayers will pay more than $15 million in fiscal year 2013 toward principle and interest on bonds dating back to at least 2004, according to Clark.
She said most bonds have funded the catalog of road and water utilities projects the city currently has on the books. With an ever-aging infrastructure, city officials will use the 5 percent increase in the water utilities tax to help pay for the millions the city plans to spend next year on such projects, as well as the debt that comes with it.
“For the most part, its a very similar budget,” Clark said, comparing last year’s budget to the one for 2013 approved Tuesday.
“Revenues are expected to be right about the same,” she said. “In the grand scheme of things, we aren’t showing much growth.”
City Manager Kyle Hayes said, “This 5 percent rate increase is needed to effectively operate the system and to provide the necessary debt service (repayment of debt).”
According to the city’s budget, the annual General Fund revenue — funded almost entirely from property taxes — is about $100 million.
Some of the most notable (and expensive) water utility projects are as follows:
- • Additional water supply system – $8 million
- • Leak detection – $15 million (with contract guarantee to save $15 million over seven years)
- • Sanitary sewer rehabilitation, small mains (pipe bursting) – $14 million
- • Wastewater treatment plant holding pond and dredging ponds No. 1 and 2 – $4.3 million
- • Water line and fire hydrant installation/replacement – $3 million
- • Weiss Bluff pumping station – $3 million
According to the council agenda, part of the city’s plan to pay down the debt is to install a water leak detection and an automated metering system, saving the city about $15 million over seven years. Not only will the 5 percent help pay the price of the city’s water infrastructure projects, but during that seven-year period, the city will raise water rates every year for at least the next seven years to help pay the debt produced by the water fund.
“This revenue and savings assumes an annual rate increase of not less than 3 percent,” the council agenda says.
The cost of the city’s road and transportation projects dwarfs its water utilities projects, however. In all, hundreds of millions of dollars will be spent to repair and replace Beaumont’s ailing roadways. The Neches River Bridge is perhaps the biggest of these projects, with the two-year process of replacing the aging bridge having already begun. Most road projects are in cooperation with TxDOT and use federal money that the city matches. Most road projects will also replace water, sewer and other infrastructure underneath the roadway.
The most notable (and expensive) road projects are as follows:
- • Concord Road, phase IV (East Lucas to Highway 105) – $21 million
- • Dowlen (US 69 N to Delaware) – $17.5 million
- • Old Dowlen (Dowlen to Highway 105) – $11.5 million
- • South Park Relief – $11.7 million
- • Washington (I-10 to MLK) - $27.5 million
These projects do not include those still in the design phase. Hundreds of millions more will be needed to complete the road and water projects still under consideration, Hayes said during Tuesday’s council meeting.
Clay Thorp can be reached at (409) 832-1400, ext. 225, or by e-mail at clay [at] theexaminer [dot] com.