City budgets for $640,000 deficit in 2019

The city of Wimberley adopted a budget for next year that spends more than $640,000 of reserve funding.

The budget comes on the heels of finalizing the Fiscal Year 2017/18 budget, which finished at the end of September, and spent nearly $285,000 out of the General Fund.

Neither budget includes the cost of canceling the Black Castle contract for the wastewater treatment plant, which is still being negotiated.

The deficit spending in 2018 was attributed largely to hiring a project manager for the wastewater project, increases in legal fees, staff insurance cost increases and additional spending for employee retirement.

The Blue Hole Fund, which is kept separate from the General Fund, actually saw a substantial surplus, even after paying for an unbudgeted $65,000 towards the Wastewater Fund this year.

“Blue Hole had an almost miraculous year of good weather, almost no rainouts but still enough flow to have people swimming and I believe full capacity for just about everything they had,” City Administrator Shawn Cox said. “I don’t know that we would anticipate that every year.”

Blue Hole added a little over $70,000 to its reserves, but that money is now budgeted to be spent next year on the wastewater project.

As part of the $642,024 the city plans to pull from reserve funding in 2019, nearly $100,000 of that comes from Blue Hole reserves. Blue Hole is contracted to pay $200,000 per year for treated effluent from the sewer system to water the park, even though that is no longer part of the city’s sewer system plans. Previous administrations stated a plant for the city to reimburse the Blue Hole Fund for the payment, but next year’s budget only includes about $100,000 in reimbursement.

Cox said that the city is trying to “remove that burden” from Blue Hole altogether starting in 2020.

The increases in spending within the General Fund are almost exclusively related to expenditures for the wastewater system, as payments must be made on the wastewater system construction loan before the system is operational and bringing in revenue. Of the $640,000 deficit, about $585,000 is associated with wastewater payments, though some of that is for other wastewater related items not associated with the construction loan.

Just over $400,000 is transferred out of the General Fund. After accounting for money moving to Blue Hole and then Blue Hole paying into the Wastewater Fund, about $500,000 is transferred to pay for the sewer system from other city funds. Even with revenues expected once the sewer system is operational midyear, the fund is $85,000 in debt in 2019.

Besides wastewater related spending, the other main increases are based around roads and staff salaries. All employees of the city of Wimberley are slated to get a five percent raise with the exception of the city administrator, whose salary did not change. Also, the city had planned on spending $100,000 on road projects in 2018, which is separate from road maintenance. After spending only $60,000, the council elected to use the remaining $40,000 in 2019 in addition to the regular budget bringing the total for road projects to $140,000 in 2019.