City of Farmersville raises many, lowers some service costs; lowers subsidies from general fund, enterprise funds
FARMERSVILLE – Heading into 2022, Farmersville residents and prospective developers will see a hike in costs for some services, and the proverbial “free” sticker on others.
Steve Huntley, director of finance and administration for the city of Farmersville, said as the city looks forward to future growth and development, recalculating service costs is also an opportunity to look inward.
“It’s an interesting process, because you go through this very introspective evaluation of, ‘What are the services we provide? Is this actually our cost? Does it make sense to offer these services at these costs?’,” Huntley said. “We decided to change how we did some things because we just saw that, ‘this doesn’t actually make sense. It’s not very efficient, so let’s fix that.’ It’s not just about money, but about effectiveness as well.”
The city contracted Revenue & Cost Specialists, LLC (RCS), a company that’s been providing fee and costing services to local government agencies for over 40 years, to assist with the year-long process. The last time fees had been set in Farmersville was 2012.
Many of the service cost increases are development related, with the idea of reducing subsidies for services from the city’s general fund—and in some cases enterprise funds—using the general fund and enterprise funds monies for what they are intended for and gauging staff and contracted hours for services properly. Huntley said under the new cost structures, which will go into effect Jan. 1, 2022, service subsidies have dropped from about 55% to around 24% to 25%.
“We don’t charge fees for the fire department to show up. If you call 911, it doesn’t matter who you are, if you paid your taxes or not, the fire department responds,” Huntley said. “These are more like, ‘I want to do something with my property because I want to improve it,’ and there’s a net benefit to that one individual. So they are basically responsible for that fee.”
This is where the run in with subsidizing services from enterprise funds comes into play. Enterprise funds—which fund services like sewer and water—are primarily supported by ratepayers, unlike the general fund, which is by and large supported by taxpayer dollars, business and utility license fees, transient lodging taxes, state shared revenues from cigarette and liquor taxes, interest income and other revenues.
“If there’s a high subsidy amount [from an enterprise fund] for an individual fee, for example, the cost to set up a new account or to have special services down after hours, it doesn’t make sense for all the ratepayers to have to pay for that one individual’s specific choices,” Huntley said. “That’s the type of thing that we’re trying to get updated and corrected, because we’re trying to do the right thing and not have everyone’s neighbors pay for your deal.”
Conditional use permits will see a 19% increase up to $1,782, a common permit needed to do many change and development-related activities within a city. Other development-related services which pertain more to developer-absorbed costs have seen sizable increases, like the 251% increase to annexation at $9,123 and about 510% and 302% increases respectively for final parcel maps and final tract maps at $3,030 and $4,750 a pop.
“In our case, there’s a lot of those types of situations where it’s not handled in-house—we’re not big enough to have those specialty employees in-house,” Huntley said, “and so we need to go out and hire contracted help. For instance, our city engineer is contracted, our city planner is contracted and our city attorney is contracted. Whenever they’re involved, they end up billing the city, and so we have to pass through that cost or choose to subsidize it to some level.”
Conversely, the city is waiving the requirement for a $500 deposit for an environmental impact report and the $250 charge to hold a special city council meeting or planning commission meeting. Utility late fees will be reduced from $5 to $1, but state law through SB 998, which requires the city to go through an extensive process to inform residents before the city shuts off their unpaid utilities. Cities are currently not allowed to shut off anyone’s unpaid utilities through at least January 2022 due to COVID-19, but once that mandate is over, residents will incur a new cost of $63 for city hours delivering door hangers.
“Would I like to not charge that one? Yeah, because it would be a whole lot easier if we didn’t have public works staff drive trucks all over town delivering door hangers to put on people’s doors,” Huntley said. “But I understand the state law too, to give everyone as many chances as possible to pay their bill and be aware of their bill before they get shut off.”
Other noticeable increases are the 244% increase to a temporary outdoor sales permit up to $85, and the increase to events permits at $140 for parks and $190 for downtown and street closure.
In theory, the city expects to collect about $237,000 in new revenue from fee increases to replace tax monies used to make up the difference between fees collected and costs incurred in providing the services, but Huntley said it’s tough to make assumptions that require a certain level of development.
“It’s all development driven. If there’s zero development, the [revenue] won’t increase at all, because there will be no fee collected,” Huntley said. “That’s the tricky part about it. If we make the assumption that there will be the same level of development or more, then yes, there would be increased revenue, and that would offset the expenses so that basically, the budget would be healthier and would allow us to do things like potentially hire more staff in public works, police or fire. Essential services work is where most of that [revenue] needs to be targeted.”
