Farmersville tightens budget amid rising costs

Farmersville Finance Director Steve Huntly presenting to council during a meeting on Oct. 23.(Rigo Moran)

Farmersville City Council adopts conservative budget for fiscal year ‘24-25 amid increased expenses and declining revenues, makes some cuts across departments

FARMERSVILLE – Rising costs from inflation and some recent staff changes have pushed the city to rein in spending this year and focus on maintaining Farmersville’s most important services.

On June 10, Farmersville City Council adopted its budget and spending plan for fiscal year 2024-25. An increase in expenses and decrease in revenues is forcing the city to take a more conservative budget this year while having a slight deficit in the general fund.

“All the departments basically are receiving cuts. We’re trying to anticipate what’s happening in the future with declining revenues and rising expenses,” finance director and co-interim city manager Steve Huntly said.

The city is making cuts to accommodate increased expenses while also accounting for the uncertainty of unfilled positions with the city this year. Huntley explained that staff budgeted their vacant positions the same as they did in previous years; however, it is unclear if those positions will cost more once filled. Alternatively, there is the possibility the positions will remain unfilled long enough that the city will save money.

“A huge chunk of the general fund is made up of salary and benefits, and the cost of having employees is going up. We want our pay to be competitive, we want our benefit package to be really enticing,” Huntley said.

Another main increase for Farmersville, alongside inflation and larger economic trends, is the city’s animal control contract with the City of Visalia.

“The base cost (for animal control) almost tripled. All of our normal expenses are increasing slightly, but also, we have to somehow cram another $138,000 expense in (the budget) that we didn’t have before to offer the exact same service,” Huntley said. “That’s a huge impact to our general funds.”

Something else that was a main concern at previous council meetings was the city’s public works departments. On April 8, concerns stemmed from a potential 14% budget cut to public works. Since then, the city has reallocated and delayed other projects to bring the public works cut down to a 7% cut.

There is some good news this year concerning the budget, however. While the funds from Measure Q, the city’s cannabis sales tax, are still decreasing as they were last year, Huntley said they are decreasing at a lower rate and will level out soon.

“I would love for that revenue to just keep growing and growing so we can do more, but if it’s going to level off and be more predictable, that actually kind of helpful, because then at least we know what to expect,” Huntley said.

Measure Q is used to support many services and projects in the city. This includes an additional police officer position, fire officer position, public works and park maintenance as well as capital projects such as the city’s Sports Park.

“We were able to use the Measure Q funds and leverage it with a grant to produce what is a really nice, beautiful park now,” Huntley said.

He affirmed that this year, the money from cannabis sales will be used to maintain existing services instead of newer projects.

“We’re not going to make any cuts to the positions that it supports or anything related to ongoing operations,” Huntley said. “The progress that we make on projects is probably just going to be slower than in past years, because we just don’t have that cash flow quite like we did before.”

The Sun-Gazette reported in May 2023 the biggest hit to Farmersville’s general fund last year came from a decrease in cannabis sales, or Measure Q. According to city staff reports, revenue from Measure Q declined for eight quarters in a row. The average loss is now calculated at 6% per quarter.

At the time, former City Manager Jennifer Gomez explained that sales have declined writ large because of more dispensaries locating in nearby communities. Another driver of this decrease last year was just different purchasing options that don’t include going to a brick and mortar location, such as deliveries. As a much larger economic trend, Gomez noted that more people might be attempting to cut unnecessary costs.

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