Plano City Council receives update on current budget, next fiscal year's budget discussed

Inflation, supply chain constraints and increased gas prices have caused disruptions in Plano’s 2021-22 budget and could potentially have lingering ripple effects through FY 2022-23 and later years, city budget director Karen Rhodes-Whitley told Plano City Council in a Monday meeting.

While giving a status report on the FY 2021-22 budget, Rhodes-Whitley said the national inflation rate exceeded the year’s initial inflationary projections. A 4% inflationary rate was accounted for in the budget, but on March 15, the U.S. Bureau of Labor Statistics said the Consumer Price Index rose by 7.9% from February 2021 to February 2022. As such, the most current inflation rate in the United States is 7.9%.

Furthermore, ongoing supply chain issues prompted city staff to expedite the process in which it orders fleet vehicles. Per Rhodes-Whitley, city staff normally orders special-use utility vehicles such as fire trucks and garbage trucks in August or September of each year, but rising prices and production delays are making it more economical for them to send letters of intent to manufacturers by May 1 for FY 2024-25 orders.

While doing so would, according to Rhodes-Whitley, save the city 7% per vehicle, the purchases would not be made by the city until the vehicles are delivered.

Insurance and liability costs have also increased for the city, with its Risk Management Fund increasing from $5.8 million to $7 million due to increased claims costs and other insurance-related expenditures.

Rhodes-Whitley added that the Community Investment Projects (CIP) for Plano’s water and sewer services are projected to reach deficit levels in FY 2022-23.

“We have slowly been running out of money within the water and sewer CIP,” she said.

For the next fiscal year, city staff is requesting $25.6 million worth of water projects and $18 million for sewer projects.

Still, the current fiscal year has also included economic advantages for Plano. Per Rhodes-Whitley, sewer revenue is reaching pre-pandemic levels now that schools and businesses are fully operating again, and the Convention and Tourism Fund and Recreation Revolving Fund are both recovering from the pandemic’s economic devastation.

A recommended FY 2022-23 budget will be submitted by the Plano City Manager’s office to Plano City Council on July 27, and the council will adopt a budget and set a citywide property tax rate on Sept. 12. The 2022-23 fiscal year will begin on Oct. 1.