And so it began: The Dallas City Council got its first look at the process for writing the two-year budget for fiscal years 2024-25 and 2025-26 on Wednesday and was informed of a looming $38 million shortfall.
Interim City Manager Kimberly Biser Tolbert released the budget outline on May 15.
“Revenue constraints and increasing expense pressures have forced us to take a different approach to this year’s budget, and we are ready to do so,” she said. “We are having to reexamine our service delivery model, organizational structure and service priorities to ensure we operate more efficiently and accountably.”
Staff is scheduled to present its recommended budget on Aug. 13.
Last year, the City Council approved a $4.62 billion budget after much debate over property tax rates and how to address huge deficits in the police and fire pension fund. Ultimately, the council lowered the tax rate for the eighth consecutive year, lowering it from 74.58 cents per $100 of assessed value to 73.57 cents per $100.
Watch Wednesday’s 79-slide presentation here and City Council’s budget debate here .
Dallas City Council overhauls budget process
The $1.25 billion bond was approved May 4, and numerous projects in 10 categories will be funded through bonds rather than drawn from the general fund budget.
Chief Financial Officer Jack Ireland said the city faces a multimillion-dollar funding shortfall not just for the next fiscal year but through 2028.
“There may be some things we haven’t incorporated yet,” Ireland said, noting that the property appraisal protest is scheduled for May 15 and the city is uncertain about how much tax revenue it will receive. “We’ll continue to work through the next 11 weeks on various revenue streams and all of our expenses, but there will be other adjustments we will need to make. Employee health insurance benefits are trending a little higher than expected, so we may need to make adjustments related to that.”
Ireland said he was meeting with department heads to identify new service delivery models.
“We will be re-utilizing some positions that have been vacant for more than 12 months,” Ireland said. “We want to focus on quality, not quantity, of positions, and we will be looking very carefully before asking for approval of any additional positions.”
A town hall meeting on the budget will be held in August, with public hearings scheduled for May 22 and Aug. 28.
“When we get to Aug. 13, there will not be a shortfall,” Ireland told lawmakers. “We will recommend a balanced budget. We will do that work for you this summer, and then it will be up to you to accept that recommendation and move forward.”
Council feedback on Dallas budget
Some of the proposed cost-cutting measures, such as eliminating “ghost full-time employees,” were proposed by City Councilwoman Carla Mendelson, 12th District, more than a year ago.
“For five years I’ve been sitting here saying these things,” Mendelson said Wednesday, “and now I feel a little more confident that we’re going to do it, but it’s certainly frustrating that we put it in the budget just because the money was available.”
In response to a question from Councilwoman Paula Blackmon, D-District 9, Ireland said there are several items that must be prioritized.
“We’re going to put money into pensions,” he said. “That will be a sanctuary. We’re not going to put the city at risk with debt service, things that we’re legally required to do, anything like that. In terms of departments, are departments exempt from review and analysis? No, we will review all departments.”
District 1 City Councilman Chad West told CandysDirt.com after the meeting that he was pleased to see a proposed budget that “includes significant contributions to both employee and uniformed personnel pensions, as well as a proposed long-term plan to fully replenish them.”
West added that the Development Services Agency’s promotion plan is important to ensure economic stability.
“Of course, the CFO also mentioned a projected budget shortfall that incorporates substantial pension contributions and opined early on that future construction and development projects may help make up the shortfall,” West said. “This reinforces how important it is for our permitting office to be the best in the country, or at least highly efficient. The permitting office is the gateway to the tax revenue we need to close this budget shortfall while maintaining construction jobs, new housing and services.”
