Bastrop, Tx–The city council will meet again Sept. 15 to continue budget talks after a deep policy difference emerged during discussion on the coming year’s budget for the Bastrop Economic Development Corp. on Sept. 8.
The BEDC board has proposed spending as much as $2.2 million to extend roads in its industrial park and open up as many as 13 new lots for prospective industrial and business tenants. Currently only two or possibly three lots remain available for development, said BEDC President/CEO Joe Newman.
Newman added that the city is eligible for grant money which could cover half the cost of the proposed road extensions.
But Council Member Julie Hart argued that the BEDC money, from a special economic development sales tax, might be better spent developing a new deep well in Bob Bryant Park to boost the city’s water supplies which have under pressure during the past two extremely hot, dry years.
Spending BEDC money on the water system would require prior approval by voters, probably no sooner than May 2010, said city attorney J.C. Brown. Election cost would likely be no more than about $5,000 if the referendum were held in conjunction with the May council elections next year, said Brown.
Mayor Terry Orr questioned the wisdom of “mixing” BEDC sales tax funds with customary water and sewer system revenues which are designed to cover the utility’s operating, maintenance and development costs.
Hart said putting BEDC cash into the water system could soften the impact of higher rates charged to customers for system improvements and added water production capacity.
In 2008 the city council approved a five-year capital improvements plan for the water and sewer system, including new water wells. The planned $2.5 million improvements would be paid for by annual rate hikes of 10.5 percent a year over the same period.
That amounts to a 61 percent rate hike for water and sewer customers over five years, said Hart. She urged delaying approval of the BEDC road project while studying alternative uses of the money.
Council Member Joe Beal suggested that the council should consider carefully before abandoning a long held policy which calls for the city’s so-called enterprise funds–water, sewer and electric utility operations–to be self-supporting, that is, without relying on other sources of city revenue including sales and property taxes.
The council is slated to take a final vote Sept. 22 on operating budgets for the 2009-10 fiscal year for all city funds and functions, including BEDC and utility systems.