NO NEW TAXES - State of the Budget FY 2009 - 2010

State of the Budget FY09-10

Coppell is a wonderful place to live. The city is well managed and financially secure. It carries a AAA bond rating, has a healthy $37M reserve fund (savings account) and provides us with excellent services and amenities. The schools are exemplary (literally) and our children grow up in healthy, family oriented environments. Fire and police services are superior and city employees are courteous and efficient.

But let's keep in mind that the residents and property owners, both residential and commercial, provide the revenues in property and sales taxes that fuel the city coffers.

Due to a troubled economy, the property valuations for the city decreased slightly for the first time in recent history. Even still, the city staff has prepared a budget for FY09-10 that includes a 2% salary increase for its employees with no cuts in personnel or services. No facilities will have to close, no forced furloughs for employees, no decrease in services. In addition, the city is budgeting for a $3.5M "profit" (more revenue coming in than expenditures) which would be used to increase the reserve fund (savings account).

Unfortunately, the growth rate of the city has slowed and revenues are decreasing. In addition, the city purchased $26M of property on Northlake last year (that the voters approved), and has a hefty debt service payment to pay off the bonds.

This is creating a dilemma for the city officials. How can the city of Coppell maintain its healthy financial condition and continue to offer a high quality of life to its citizens? The easy answer is obviously to raise the city tax rate. By increasing the city tax by 5¢ to a total rate of 69¢ the city could service the debt on the Northlake property, continue to fund all current level of service including a healthy $3M into the undesignated reserve fund (savings account). That reserve fund, incidentally, has shown a growth of approximately $3M per year for the last five years.

The nickel tax rate increase would raise the average household's property tax by about $150 per year. That's two trips to the supermarket for groceries for a family of four. Coppell already has one of the highest property tax rates in the area, higher than Southlake, Grapevine, Farmers Branch, Keller, Irving, and even Plano. The Coppell City Council has been provided funding scenarios that demonstrate that they don't HAVE to raise the tax rate this year - but all those options fell on deaf ears.

The economic downturn of 2008/2009 may not have hit North Texas as hard as some areas of the country, but who doesn't know someone that has lost a job, been forced to take a pay cut, or has been forced to take leave or vacation without pay? Coppell's Unemployment Rate has jumped 45% in the last year to 7.4% (July '08 to July '09). This is similar to Dallas' rate of 7.6% and thank goodness is less than the National average of 9.5%.

The citizens of Coppell do not need this additional burden imposed upon us this year. The city can provide all the services in the budget without an increase in the city tax. This can be accomplished simply by slowing the growth of the reserve fund. The reserve fund would not be affected nor would it impact the FY09-10 budget in any other way. Reserve funds are created to be used in difficult times; yet, the FY09-10 budget will not affect that reserve. The current reserve fund is more than adequate for the city.

The Coppell City Council needs to re-evaluate the FY09-10 budget to align with the economic times facing us.

NO NEW TAXES