City manager presents proposed 2024 budget to Killeen City Council

Killeen Daily Herald
By Kevin Limiti, Killeen Daily Herald
July 11, 2023

City Manager Kent Cagle on Tuesday presented the proposed 2024 budget to Killeen City Council members, highlighting a number of potential changes to the budget from last year.

The total expenditures for the proposed 2024 general fund budget is $120,329,340, a 6.5% increase from last year’s proposed $112,895,420.

The total budget is approximately $149,839,619 when including funds such as water and sewer, solid waste, drainage utility, aviation funds, street maintenance, and the hotel occupancy tax fund. However, the total budget amount — including debt service — was not available Tuesday. Last year’s budget totaled about $265 million.

The proposed 2024 budget calls for decreasing the tax rate by a quarter of a cent from the current 62.33 cents per $100 valuation to 62.08 cents.

After hearing the presentation Tuesday, the council, in a 5-0 vote, approved a public hearing for the proposed budget on Aug. 1. Councilmember Ramon Alvarez was absent from the meeting.

Sales tax revenue for the proposed 2024 budget rises by $2.1 million over the previous budget where it sat at $33.9 million. Property tax revenue increases by $6.8 million over the previous year’s budget.

Cagle credited the expected increase in revenue to the increasing population in Killeen.

The number of city employees per household, he said, is about 8.3 employees per 1,000 population.

“Employees drive expenses,” Cagle said, remarking that Killeen was a fast-growing city.

The tax levy for the 2024 budget is at $65.3 million, but Cagle mentioned that exemptions were a factor in that number.

“We’re one of the few cities that has an exemption to this magnitude,” he said, explaining that disabled veterans exemptions made up 54% of total exemptions. “Very few cities, except some of our neighbors, have exemptions of this magnitude for the disabled veterans.”

According to the budget document, 100% disabled veterans will receive an additional $292 million in tax exemptions for property values totalling $1.75 billion.

The proposed 2024 budget includes a $1.50 monthly increase in rates for residential water and sewer service. That area of the budget features a total increase in spending of $746,471.

Major changes to expenses include more than $484,000 toward an overhaul of IT technology, and increase in $56,000 for the tax appraisal district

The budget also includes $750,000 in additional spending for the Hill Country Transit District, commonly known as The Hop.

Cagle said The Hop hasn’t been part of the city’s budget since 2020 as American Rescue Plan Act funds dedicated to COVID relief had been paying for the service. But since the federal government declared that the COVID emergency was over, the city would need to resume payments. He said when The Hop was on the budget, it cost approximately $200,000, but he said the number wasn’t firm.

The transit district is considering shifting its bus service toward a ride-sharing service similar to that of Uber or Lyft.

The funds coming from ARPA will also be suspended for paying police officers and firefighters, Cagle said. Cost of Living Adjustments for city employees increased by 7% for civil servants and other civilian employees by 6% in the proposed budget.

Councilmember Jose Segarra praised Cagle for “presenting a balanced budget.”

“It’s great work,” Segarra said, but said the city would need to consider how to increase revenue in the coming years.

“I think it’s probably time to ask that tough question,” he said.

Councilmember Jessica Gonzalez indicated that the hotel tax could be a “huge revenue” source for the city.

“We need to find ways to be able to creatively compete with industry providers,” Gonzalez said. “I think what we’ve done with the rodeo is a wonderful, wonderful step in the right direction to increase that hotel occupancy tax. Things like that, that’s going to help us find another way that we can really generate resources for our city.”

Other agenda items approved by the council Tuesday include:

A resolution accepting approximately 1.3 acres of parkland dedication near East Trimmier Road and north of Andalucia Lane for $10.

A bid for an Airport Terminal Program Solar Project at Killeen Fort Hood Regional Airport for more than $7 million

Approval of certificates of obligation totaling $32 million which includes $18 million for a fleet services facility, as well as police parking expansion, police evidence storage building, a parks maintenance facility, the Skylark Fixed Base Operator Building and park construction / renovation