Friday , 27 April 2018

Reader Opinion: Analyzing McKinney’s City Budget, Spending and Tax Rates

By John Helmer, Community Contributor

My family and I have lived in West McKinney for about seven years. I have never taken much interest in city government or politics. Last year I began noticing news articles about our city manager, Jason Gray, and the sudden firing of our long-time police Chief Doug Kowalski. A brief review of election results indicates the near extinction of democracy in McKinney; council seats are rarely contested, relatively few people vote, and (I think) council majority vision might be moving away from the interests of the taxpayer. My hope is to engage and inspire others to get involved, be informed and take part in city government.

I have asked the council to address the following points:

1. Salaries. See attached files below, a factual list of top employee salaries obtained in December 2012 by open records request, and McKinney Financial Statement Median Salary sheet from the comprehensive financial reporting listed on the city web site. The salary sheet indicates a median McKinney annual per capita salary of $31,123 and an 8.1% unemployment rate for McKinney, Texas in 2011. The salary list shows that 336 McKinney city employees earn annual base salary in excess of $60,000, with the top 35 employees each earning in excess of $100,000.

Additionally, all employees enjoy full medical and dental benefits, a 401K retirement pension plan with city contributions at a 2:1 ratio. I don’t receive any such benefits in my private-sector work. I am very dismayed to discover that, as a taxpayer, I am subsidizing a compensation utopia that is unavailable in the private sector. Would you please tell me who on the city council has supported this ludicrous policy? Additionally, the attached sheet from the McKinney Comprehensive Annual Financial Reports, on p. 75 shows an unfunded pension liability of $39,816,103. I may not completely understand this but it appears we are in the hole, and today’s interest rates, near zero, are unlikely to earn us out of that.

2. Other Spending. Please refer to the attached McKinney city checkbook as posted on the city website with records for January through December, 2012, as parsed, sorted and subtotaled and also with full detail (please excuse any parsing errors on my part). This file includes total expenditures of $129,439,497 paid out in 10,850 checks over the recent 12 month period. I know some of this is capital in nature, but it also includes many millions of dollars in retainer fees and services, including $978,684 to a law firm called Brown and Hofmeister which I am told has not been competitively bid in over 7 years, (is that related to litigation for the failed Gateway project?). I would like to have an explanation for each of these non-capital expenditures, including billing rates and who is responsible for the engagements.

3. Budgeting and Financial Reporting. I keep seeing award seals on the city budget and financial reports relating to excellence in reporting standards. I assume we are spending lots of dollars and staff hours producing spectacular documents when “accurate, credible and compliant” would be sufficient. Can someone explain to me what this is costing the taxpayer and why we need it?

4. Taxation. The current city budget posted on the McKinney city web site indicates that about 50 percent of the city revenue consists of real estate tax, of which approx. Seventy percent is from residential homesteads. The real estate tax is the only asset-tax that individuals presently face, and, if unpaid, results in a sheriff’s foreclosure, forcible entry and detainer, eviction, loss of shelter and usually extinguishment of equity. With this in mind I believe that your city mission statement should be amended to include the language “to spend no more than necessary” to provide essential services. I do not see any evidence that the city council is on board with that concept.

5. Austerity. The U.S. economy was severely impaired beginning in 2008. This would have been an excellent opportunity to scale back our city government, reduce staff through attrition, and allow the private sector to lead our growth activity. But in fact, the city has supported ever more spending and hiring, having replaced approximately 20 people last year and paying out approximately $800,000 in severance fees as city manager Jason Gray settles in and hand-picks his team. I notice our city tax rate has been level at $0.58 per $100 valuation for the last 5 years. I would have expected that our continued growth would have led to economies of scale that would have allowed a reduction in the tax rate. The city maintained these high rates in spite of record job loss and mortgage foreclosures in Collin County during the last 4 years. Can you disclose who on the council is responsible for these policies?

6. West Side. We live near Lake Forest and Eldorado in West McKinney. This intersection has been under construction for many months. There are dangerous pavement cuts and equipment stands idle for weeks without any sign of progress. I don’t see how it is possible to have 854 razor-sharp city employees and witness such inept project management. On another topic, I have been suggesting reduced speed limits on Lake Forest between Eldorado and Virginia, with better speed enforcement for at least 4 years. I believe that would benefit the Stonebridge area just as lower speeds have been effective on Louisiana east of Hwy 75. If Highland Park can do it, I don’t see why McKinney is unable to.

7. Gateway Project. I understand that the City of McKinney is investing approximately $20 million of taxpayer dollars in this real estate development, having failed to complete it in the first round. Is there actually any credible likelihood that this project can be self-sustaining? I know the council is aware of the failing economics of the Allen Event Center, just a few miles to the south and in a much more robust locational demographic. I believe that in the absence of major stigma, real estate development is, in most cases, a private sector mission. Who will indemnify the taxpayer in the event this project needs perpetual life-support?

Thank you for your time in this matter.

John Helmer

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