Killeen City Manager presents proposed FY 25 budget to Council

KILLEEN, Texas (July 3, 2024) - Killeen City Manager, Kent Cagle, presented the finalized proposed budget to City Council members and the community during Tuesday night's council meeting, highlighting council priorities, new positions and a four percent cost of living increase in employee salaries.

The proposed fiscal year (FY) 2025 budget includes a tax rate of 65.73 cents per $100 valuation, and the current FY 2024 tax rate is 62.08. The 3.65 cent increase is the first increase since FY 2015. Since FY 2021, the tax rate has significantly decreased from 74.98 cents. The FY 2025 tax rate increase is aimed at being proactive and ensuring adequate funding for essential services.

The total budget is $314.2 million and General Fund expenditures for the proposed FY 2025 budget are $125.3 million which is $4.7 million ($3.9%) higher than the current FY 2024 budget.

Council priorities include ensuring there is competitive pay, increasing staffing to meet service demands and ensuring there is affordable healthcare for employees. The budget proposal includes additional positions and employees for Public Works, the new community center, Development Services and Aviation for an intergovernmental service agreement.

This budget will raise more total property taxes than last year's budget by about $5 million (7.98%), however, this is offset by decreases, including $527,402 less in Sales Tax, a $627,820 reduction from the State of Texas for the Disabled Veteran's Exemption reimbursement, and a $200,000 decline in fine revenue. Charges for services are expected to increase by $604,968, with $394,813 of this increase coming from Fire Recovery and Ambulance Fees. With an overall net increase of 3.9%, this does not keep up with inflation.

Major General Fund expense changes include Information Technology additions and upgrades (Killeen Police Department's Real Time Crime Center, etc.), Code Enforcement costs (abatement and disposal), additional staffing, pay plan changes, a new community center, Parks and Recreation renovations, economic development agreements (new businesses), Department of Labor changes, etc. There were about $9 million (55 positions) requested from departments that were not funded.

Proposed Water and Sewer Fund expenses increased 3.6% over the FY 2024 adopted budget. There was an increase in debt payments to the Water Control Improvement District (WCID) No. 1 for the approved Water System Improvements Projects. In September 2023, the City of Harker Heights bought into the sewer treatment plant and assumed the Bell County WCID debt service payments from the City of Killeen. This reduction of $3 million in debt service payments is now being moved to the Water and Sewer Capital Improvement Fund for pay-as-you-go capital projects.

The FY 2025 Capital Improvement Program includes funding for 23 individual projects and 49 vehicles / equipment, totaling about $37 million.

Cagle addresses the effect of the Disabled Veterans Exemption in the proposed budget, saying, "For the past six years in a row, the Veteran's Exemption has grown more than all the new construction value in the city. The loss in property value by the City of Killeen alone exceeds the fiscal note prepared by the state legislature for the entire State of Texas. This is not sustainable."

During Tuesday's presentation, Cagle said, "I bring that up, not to attack the DV Exemption recipients, but to ask the State of Texas to reimburse the City of Killeen for an exemption that they granted. The State granted this exemption but didn't have to pay for it. We're asking for reimbursement from the State, which they've done on a partial basis for some cities."

The first public hearing on the proposed budget is set for a July 23 special meeting. Council will decide if a second public hearing is necessary and, if so, that will be held on Aug. 20. The new budget is scheduled to be adopted on Sept. 3.

The full 466-page proposed budget document is available on the City's website at www.KilleenTexas.gov/Budget.

Residents may also view each City Council meeting in their entirety on our website, www.KilleenTexas.gov/CouncilMeetings, the government channel, Spectrum Cable Channel 10 and the City's YouTube channel.