Amarillo council workshop drops plan for immediate street utility; staff offers trade-offs to balance next year’s budget

Amarillo — City staff on Monday presented revised budget projections and three options for funding street maintenance, and council members signaled they prefer to hold off on creating a new street utility this year while prioritizing pay adjustments for employees and a state-authorized TMRS (Texas Municipal Retirement System) cost-of-living adjustment for retirees.

City finance staff presented a revised estimate of the general fund, explaining revenue and transfer changes since last year and identifying roughly $1.1 million in revenue “fine-tuning” (permits, franchise receipts and other items) that could be applied to the budget. Laura (staff presenter) summarized the revised estimate as “our best guess at this point in time,” and said staff had prepared three scenarios: no separate street fund; a partial (quarter or half) fee in year one; or a full, self-supporting street utility.

Why it matters: the council entered the workshop with a roughly $15 million question about how to maintain streets without adding to property tax triggers or imposing a new, citywide recurring burden. The street-maintenance proposal staff modeled would have moved about $15 million of street maintenance out of the general fund into a separate fund supported by a fee. Council members expressed concern about timing, implementation complexity and the equity of placing new recurring charges on utility bills.

Public commenters urged caution on additional fees and emphasized neighborhood reinvestment. “I hope you'll protect our water bill with no more fees and increases that have been going on since 2016,” said one resident (Ms. Fuller) during public comment. Another commenter, James Schenk, told council, “A fee is nothing but a tax,” warning that moving street funding to a utility-style fee reduces voter control over how streets are paid for. Chris Pittman urged council to change long-term infrastructure choices, saying the city should “replace [a] car first approach with more sensible infrastructure such as walking and biking.”

On the record, council members and staff walked through how last year’s decisions affected this year’s starting point. Staff said the council’s prior budget incorporated one-time transfers from internal funds (fleet, risk management, employee health plan) and pulled water and drainage interest income back into the general fund in the prior year; staff recommended not repeating those transfers in the coming year because those enterprise funds have capital needs ahead. Laura summarized that recommendation: because of large water and sewer needs ahead, “we recommend that that revenue stay in the water and sewer fund to help the water and sewer fund as it goes forward.”

Council discussion focused on balancing recurring pay and benefits requests against one-time capital choices. Councilman Simpson argued staff and council should prioritize clear, long-running commitments and voter approval avenues, saying a street utility “needs to be given a lot of runway” and should not be sprung on voters or council on short notice. Several council members said they preferred the staff scenario that brings the street maintenance program back inside the general fund for now (the “no street maintenance fund” column), with targeted adjustments to civilian and sworn pay amounts.

Staff’s recommended compromise (the scenario council gravitated toward) would: keep the proposed general fund operating priorities (public safety, employee raises and retiree COLA), reduce the civilian raise from the filed 4% to 2% in the scenario without a street fee, reduce police from 5% to 3% and reduce fire from 4% to 2% (staff noted the council can change the allocations). That “no street fee” option, staff said, could produce a balanced budget without creating a new fee this year. Laura told council the numbers were close: ongoing revenues and expenditures would be within a few million dollars under the “bring streets back in” scenario and staff can continue refining one-time CIP spending.

Council direction and next steps: council generally favored (a) not implementing a street utility this fiscal year, (b) directing staff to continue looking for internal efficiencies and one-time capital savings that could buy down the remaining gap, and (c) prioritizing employee pay and the TMRS retiree COLA window that staff said is a limited state-authorized opportunity. Council asked staff to come back with more detail showing whether staff could identify roughly $1 million to $1.5 million for targeted pay-study implementations and whether modest additional increases for sworn personnel could be phased in without the street fee. Council also asked staff to list existing CIP projects with committed versus unspent balances (to identify any re-prioritization opportunities).

Staff cautioned that some of the large capital balances in the CIP are already committed or under contract (water/sewer and drainage projects in particular), and that interest income on enterprise funds is unreliable for ongoing operating uses. Laura reminded council that “if we make too much interest, we have to send it to the IRS,” meaning arbitrage rules and debt-restricted proceeds limit how the city can use those dollars.

The council did not take any formal votes at the workshop. Staff said it would begin preparing the required public-notice materials on the basis of the current filed proposal while returning with refined options. The next formal steps on the budget are the August/September notices and meetings required to set the tax rate and finalize appropriation ordinances.

Ending: Council members asked staff to return with a tighter set of options and asked staff to prioritize pay equity and retiree COLA while continuing to seek one-time capital savings that would reduce the need for a new street fee. Staff said it will refine the numbers and return to council with a narrower set of trade-offs and any identified one-time savings that can be reallocated; council set calendar expectations for upcoming tax-rate and budget hearings.