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North Texas Facing Soaring Construction Costs

The Dallas Morning News is reporting on the rising construction costs facing cities in North Texas — a topic we know about all too well in Cedar Hill.

These rising costs impact all of our capital projects, from public works to roads.

Cities are seeing costs increase by 10 percent a year or more.

Highway construction costs grew about three times faster between 2003 and 2006 than in any other three-year period since 1990.

For non-highway construction, construction supplies and materials have gone up 29 percent since the end of 2003, according to the U.S. Department of Labor. By comparison, the producer price index, which tracks inflation for business costs, rose 18 percent. The consumer price index, which tracks household inflation, rose 14 percent.

Source: Dallas Morning News

Cedar Hill Water Prices

I get asked quite often about Cedar Hill water rates. It’s no secret that our water prices are higher than some of our neighbor cities. There are a number of reasons Cedar Hill water is relatively expensive: 1) Joe Pool Lake, 2) the cost of infrastructure, 3) the relative youth of the city, and 4) the sewer treatment facilities.Joe Pool LakeYears ago, before the lake was built, there was a state-wide water crisis. Water was getting very difficult to obtain and there was a concern that Dallas might not continue to sell water to Cedar Hill and surrounding cities.The city council at that time chose to help pay for a part of Lake Joe Pool in exchange for the right to take 6 million gallons per day from the lake. There was also the thought that the lake would be an economic catalyst for this area, and particularly Cedar Hill.The actual arrangement is somewhat complicated, but Cedar Hill currently escrows funds so we can pay off our portion of the debt when it becomes due.As it turned out, the water-crisis resolved and Dallas continued to sell water to nearby cities.Cost of InfrastructureAlthough most of our water and sewer lines are installed by developers, the City still has to install some lines. It should be no surprise that water and sewer lines are incredibly expensive.Since we must install lines in shallow soil, we must dig through rock in order to install lines. Uneven terrain also adds to the cost. We pay approximately twice as much per linear foot as cities without these issues.Relative Youth of the CitySince most of the city’s growth has occurred during the last twenty years, we are still making debt payments on most of the lines we have installed. Older cities have completed the debt payments on most of their infrastructure.Sewer PlantsFinally, the cost of sewage treatment adds to the cost of water.We send sewer to three different plants to be treated. These plants are Central, Ten Mile and Red Oak. The Ten Mile and Red Oak plants are relatively new and their treatment costs are expensive when compared to older plants due to increased cost to construct and outstanding debt.

Moody’s Upgrades

By BRIAN ALLEN / Today Staff

Taxpayers in Cedar Hill got some good news Sept. 12 as the city’s bond rating improved according to both Moody’s Investor Services as well as Standard & Poor’s.

Moody increased Cedar Hill’s rating from A1 to Aa3. Standard and Poor raised Cedar Hill’s General Obligation Debt Rating to AA- from A+.

“This is great news for our city and its residents,” Mayor Rob Franke said.

“Upgrades from both firms are a strong endorsement of the direction of our City Council and the fiscal management provided by our city staff.

City officials met with analysts from the two firms the week before the announcement.

According to Moody’s analysts the upgrade “reflects the city’s ongoing economic development, a favorable trend of tax base growth and diversification. Sound financial management has resulted in a history of favorable financial performance and a moderate debt burden.”

Those same analysts praised city staff’s success in attracting substantial retail and commercial businesses.

Since 1999, Cedar Hill added three million square feet of retail development. Those increasing commercial values help hold down the tax rate, benefiting homeowners.

Moody’s analysts also cited the strength of building permits in Lake Ridge development despite a national housing slump as a positive factor. They believe tax base expansions will continue in the long term thanks to several major commercial, retail and park developments.

Standard & Poor’s said its higher rating reflects the city’s strong assessed value growth, above-average income and wealth levels and participation in the diverse D/FW economy.

S&P’s analysts looked to the potential of the upscale 800,000-square foot Uptown Village lifestyle center in 2008, and the impact it should have on property tax rates.

“Management will maintain its strong financial position and reserves through continued healthy property and sales tax collections; and overall debt levels will not increase significantly as management continues to implement its well-conceived capital improvement plan,” the S&P report said.

It concludes “Standard & Poor’s deems Cedar Hill’s management practices “strong, well embedded and likely sustainable.”

The rating upgrade applies to roughly $11 million in general obligation debt the city is issuing, Financial Director Hardy Browder said the improved ratings will provide substantial interest savings over the 20-year life of the debt because the city will pay lower interest rates.

Those lower rates, he said, will provide additional savings each time the city issues more debt.

Source: Today Newspapers

Proposed Changes to Impact Fees

The City Council convened a Special meeting on Tuesday, September 18, to discuss changes to the city’s impact fees. Although the ordinance has not yet been approved, the Council reached a general consensus on a plan to increase impact fees by 7%, 5% and 5% over the next 3 years. The details will be presented in a proposed ordinance at the next regular Council meeting.

What are impact fees? In short, impact fees are fees cities charge developers to help pay for the cost of new infrastructure. It is an attempt to shift the burden of paying for public improvements to developers.

Municipalities charge many types of development-related fees. Most fall into three broad categories: (1) planning fees, which cover the administrative costs associated with reviewing required planning documents; (2) building permit, plan check, and inspection fees, which cover the costs of reviewing building permit and other site specific permit applications; and (3) capital facilities fees, or development impact fees, which cover the up-front costs of providing capital infrastructure. Read more

2007 City Budget Report

The City Council has just completed the preliminary budget for 2007 and I think you will be pleased with what we have done.

I am pleased to report that the tax rate will not increase this year, as it will in many other cities. This is due to the outstanding growth Cedar Hill has experienced, and our attempt to be fiscally responsible with your money.

As in past years, we have focused heavily on public safety. Past budgets have allocated 60% of our revenue to public safety. That trend continues in this budget.

Here are some of the highlights broken down by departments.

Police

First things first. The market for qualified polices officers is tight, and Cedar Hill is at the bottom of the pay scale. Out of 13 comparable cities, we rank near the bottom at number 12. That will change in this budget. We will move up to number 8, which puts us in the middle. That’s obviously good for the men and women who protect and serve, but it is also good for Cedar Hill. We benefit by attracting and keeping qualified and experienced police officers.

We are also adding 3 more police officers and some citizen support staff. Even with these new officers, we still are a behind the state average on officers per 1000 residents. That we have the lowest crime rate in the Best Southwest area is a testament to how well they are doing their jobs.

We are also purchasing some new equipment and replacing some old equipment.

Fire

Like police, our firefighter’s compensation will be adjusted to be in the middle of comparable cities, rather than at the bottom. They too do an outstanding job, and we don’t want to lose them.

We are purchasing a new ambulance to replace an old model as part of our equipment replacement program.

And now for some really good news. We are adding 5 more firefighters.

This is a milestone for Cedar Hill. With this budget, all of our fire stations will be fully staffed. When I first started on Council, our fire stations were “either/or” — meaning they could either send an ambulance or a fire engine, but not both. I am proud to say that now we are fully staffed and can dispatch an ambulance and engine/ladder from each fire station. That is good news for Cedar Hill!

Emergency Management

We are creating a regional emergency management program with the cities of Duncanville, DeSoto, and Lancaster. This program will create an Emergency Management Administrator who will help coordinate local emergency planning, emergency preparedness programs and provide information and training to the general public, city officials, city staff, schools, medical facilities, civic groups, and other outside agencies.

Administration

Under the heading of Administration, we have budgeted some dollars to improve our City website. If you have looked at the web site lately, you know that it is not very functional. Over the next year, that will change. We expect you to have access to many more city services, such as online bill pay and accurate and timely public service information.

We also will have a person dedicated to conveying information to citizens. This person, called a Public Information Officer, will work to communicate with citizens in a more timely and consistent manner. This person will be responsible for, among other things, the web site, the Highlights quarterly publication, and all other public announcements.

Public Works

The function that Public Works performs is not always glamorous, but it is essential to everything that happens in this city. This year we have approved an aggressive Capital Improvement Program (CIP). Additionally, we have set aside more dollars for future street repairs and more funding for drainage studies.

Code Enforcement/Building Inspection

Code Enforcement and Building Inspection are really two-sides of the same coin. Last year we added a new code enforcement officer and some computer software to help them track code violations. This year, we turn our focus to the building inspection side of the equation and will be purchasing some new software to help them manage all the inspections they do.

Conclusion

As you might imagine, there is more to the budget than these programs, but that should give you a broad overview of this year’s budget.

High-Tech Council Member Keeps in Touch

By LOYD BRUMFIELD
News Editor/Today Newspapers

Wade Emmert has always had a desire to stay abreast of high technology and its rapidly changing nature.

When he was first elected to the Cedar Hill City Council in May 2004, he wanted an easy way for his constituents to stay in touch with him, so he developed the first blog operated by a public official in the Best Southwest - and maybe even in Texas at the time.

“I’ve always been interested in technology and community service, and having a blog about the city council just seemed like the logical thing to do,” he said.

Emmert’s blog, www.wadeemmert.com, has grown into a site that gets hundreds of hits a week. His latest innovation for the site, a podcast element, has drawn 200 people who have listened to part one of a two-part interview with Mayor Rob Franke.

The blog offers biographical information, archives, links to the city’s site and other pertinent information, contact information and a section for public comment.

People can also sign up for e-mail notification when Emmert updates the site.

“I never expected such a response,” Emmert said. “I get comments now on just about everything I post. Almost all are positive, but sometimes we get into the discussion of issues.”

On a regular basis, Emmert updates the blog with links to issues that impact the city, whether it’s new from the latest council meeting or information about developments in the school finance issue.

School finance reform drew a passionate response, with some saying the latest efforts are a step in the right direction, and others saying give less money to public schools and more to private schools.

Podcasts are a relatively recent development, thanks to the profusion of iPods and other like audio and video products.

“I wanted to do more than just put city council meetings online,” Emmert said, adding that part two of the mayor’s interview is coming soon, and he would also like to talk to former mayors, members of the city staff and other community leaders about being subjects of future podcasts.

Right now, he doesn’t plan to turn meetings into podcasts, fearing their dry nature might not be practical.

“I want to inform or entertain people,” Emmert said. “Listening to a dry city council meeting just doesn’t seem like the way to do it.”

Eventually, Emmert wants to archive the podcasts, burn them on discs and bury them in a time capsule slated for construction at the new government center.

“That way, when people open the capsule 50 years from now, they’ll get an accurate historical record straight from the people,” he said. “You can’t do that with tapes, but as long as there are computers still around to play the medium, we’ll be OK.”

Emmert’s site also supports RSS technology, or “Really Simple Syndication,” meaning people can access news feeds from the site without actually visiting it.

“People can access a feed and they can view it in a number of different programs and they don’t have to keep visiting the website,” Emmert said.

The councilman spent about 20 hours - not all at once - constructing the framework of the site and getting it running, but the work of updating it doesn’t take much time, he said.

As of now, he’s the only member of the council to take the plunge into the blogosphere.

“There are people who have websites during campaigns, but it’s important for me to be able to stay in touch continuously with people,” Emmert said.

Public School Finance Reform Update

On Wednesday, April 12, 2006, I attended a meeting with State Senators Florence Shapiro and Royce West to discuss Governor Perry’s plan for public school finance reform. This was the beginnings of a dialog with local elected officials and business leaders about the proposals.

By way of overview, the plan proposes broadening the applicability of the franchise tax so that more businesses pay a larger portion of the total taxes, and at the same time, lowering property taxes on residential and commercial properties. The Legislature will use the additional tax revenue to fund at least 50% of public education.

Here are some of the highlights:

• The reformed franchise tax will be broader and assessed at a lower rate. It provides a lower franchise tax rate of 1% (and .5% for certain low-margin employers, like retailers, wholesalers, and restaurants) than the current rate of 4.5%.
• Unlike previous proposals for franchise tax reform, it provides employers incentives for hiring more workers, providing health insurance, investing in worker pensions, and investing in dependent healthcare.
• Sole-proprietorships and general partnerships owned solely by natural persons are exempt from the tax.
• The small business exemption is doubled from $150K to $300K in total revenue.

In exchange for the expanded business tax, property taxes will be reduced. This will be accomplished by lowering school districts Maintenance and Operations tax (M&O) to $1.00 from the current $1.50. Essentially, that means cutting the amount of taxes a school district can levy for school operations.

The new plan will also impose a $1 per pack tax on cigarettes.

The end result would be an infusion of new tax dollars. Both West and Shapiro agreed that the amount of tax revenue projected under this plan is conservative. They expect the tax reform will increase tax revenue by as much as $8 billion.

There will be a lot of debate about how to use the “surplus.” Currently, the extra revenue raised will go into the general revenue fund, but there are those that want it statutorily earmarked for education.

At this point, the plan is still a commission report so it could look very different by the time it is sent to the Senate. Even so, the general consensus is that, of all the plans, this one seems to bring about the least resistance.

The legislature is scheduled to go into special session Monday at 2:00pm for 30 days. Shapiro thinks we will finally see action during this session. If not, the result could be that the Comptroller (who is running for Governor) could, in a political move, shut down the schools.

In terms of the legislative procedure, the thinking now is that the Speaker of the House will divide the proposal into 6 different pieces of legislation. Once the individual pieces are passed by the House, they will go to the Senate, and be put back into one package.

One troubling development is the prospect of lowering the appraisal cap from 10% cap to 5%. For fast growing cities like Cedar Hill and Frisco, this could severely limit a city’s ability to hire new police officers and firefighters, and expand infrastructure necessary to support the new growth. Similar caps have been defeated in prior sessions. I talked with West and Shapiro individually following the event to make sure they understood the implications.

It is sad that Texas SAT scores rank 47 in the nation. 1 out of 3 students will drop out. Of those that make it to college, 30% have to take remedial courses. This plan won’t solve that problem. We must quickly to turn our attention to real education reform.

You can read about the specifics of the plan at
http://www.governor.state.tx.us/priorities/tax_reform/TTRC_report.

Cedar Hill, school district vow to share, save

Sunday, September 18, 2005
By HERB BOOTH / The Dallas Morning News

The city of Cedar Hill and the school district are beyond walking down the aisle. They’re about to seal their unusual marriage with a kiss.

The council and school board next week are scheduled to approve a $25 million, 119,000-square-foot joint facility that would house Cedar Hill’s new City Hall, police station, municipal courts and school district administration under one roof.

The facility – which will be on Uptown Boulevard across the street from the new movie theater – should be ready by late 2007.
Cedar Hill

“We’ve asked a couple of times speak now or forever hold your peace, and no one has spoken up, so I guess that’s a good sign,” Cedar Hill Mayor Rob Franke said. “It took a lot of good-hearted people doing a good handshake deal to make this happen.”

Although joint-use agreements, consortiums and shared facilities are not unusual, this type of setup is atypical, said state officials, who were hard-pressed to find similar examples elsewhere in Texas. There are several examples across the nation where schools share facilities with a city’s parks and recreation department for after-school activities. There also are schools within businesses, shared libraries and shared swimming pools. But there are few examples of shared municipal and school district facilities.

Whole lot of sharing

Cedar Hill, DeSoto, Duncanville and Lancaster do share some services. Three of the cities share a dispatch center, while others in the group share DeSoto’s jail and a regional animal shelter.

Art Stone, the Cedar Hill project manager who works for Hunt Construction Group, said he hadn’t seen anything like this venture in his travels across the nation.

“The project represents dollars they don’t have to spend twice,” Mr. Stone said. “It is quite unique.”

The mayor said former council member Al Armistead initially suggested the shared facility several years ago.

“I think it benefits all the taxpayers,” Mr. Armistead said. “In these days and times, you should share as many things as you can. With gas headed to $3 a gallon, you have to think that way.”

Mr. Armistead said he attended a school board meeting several years ago and thought that the district – like the city – needed a new administrative building.

The school district administration building opened in 1956. The city complex was built in 1961.

Cedar Hill City Manager Alan Sims said he doesn’t know why combined projects like this aren’t done more often.

“There’s so much upside, so many positives,” Mr. Sims said. “Instead of having separate council and school board chambers, you have one. We’ll share computer rooms.”

In all, the joint facility will have about 22,000 square feet in shared space. The entities also will share a receptionist, lobby area, break rooms, copy centers, conference rooms, City Council/school board chambers and other areas. The city and school district already share computer resources and a phone system.

Mr. Sims said the city and Cedar Hill Independent School District would save about $4 million in the first year by building the joint facility. The district will pay $6.4 million into the project from 1999 and 2001 bond referendums. The city will pay for the remainder from a 2003 bond election.

Cedar Hill schools Superintendent Jim Gibson said future shared functions could include payroll and personnel.

Timing was right

School board President Randy Gaubert said the timing was right for the project in that both entities needed facilities at the same time.

“There’s a unique bond between our school district and city,” Mr. Gaubert said. “We realize we’re all in this together. A lot of times school districts and city governments don’t get along too well. There are turf battles. They don’t like each other butting into the other’s way.”

That scenario has apparently played out in other communities.

Last year, the Carroll school board asked the city of Southlake to share its chambers for meetings last year. Southlake’s council denied the request because it felt the city facilities weren’t set up for that type of arrangement. The Southlake council majority also said not all the city’s taxpayers were part of the Carroll school district. Carroll school board members thought it would be financially advantageous to the taxpayers not to have to pay for facilities twice.

Cedar Hill’s Mr. Gaubert is glad his community soon won’t have to deal with that situation.

“Why duplicate meeting rooms?” he said. “If we have a specially called meeting that coincides with a council meeting, we’ll go to a conference room,” he said. “It’s not about how much paneling is in the room where you’re meeting.”

E-mail hbooth@dallasnews.com

Tax Rate 101

I don’t know how many times people have questioned me about the tax rate. With all the growth in Cedar Hill, shouldn’t the City Council lower the tax rate? Aren’t we just money-grubbing politicians who want to tax and spend the citizens? Well, actually, no. In fact, I think you would be surprised by how conscientious the Council is with your money.

Your Tax Bill

You may be interested to know that the tax bill you receive represents taxes from several taxing entities — not just the City. These entities include the City of Cedar Hill, the Cedar Hill I.S.D., Dallas County, and special districts like Parkland Hospital. The City portion represents only a small portion of your total tax bill, usually around 15 percent. The rest is paid to the other entities.

The City Council only sets the City’s tax rate. We do not set the tax rate for the Cedar Hill I.S.D., Dallas County, or the hospital district. We have no authority whatsoever over those entities. In other words, we don’t set and can’t change your school taxes or your county taxes.

Realities of Retail

Cedar Hill has been blessed — there’s no doubt about that. All the retail grow helps the bottom line, to be sure. But revenue from retail represents only about 23% of our total revenue. That’s less than one-fourth of the money we need to run the City.

Retail revenue is also relatively unstable. It fluctuates with the economy. When times get tough, consumers buy less “stuff” and the sales tax revenue falls. Because of this, it is not prudent to depend on it as a consistent and stable stream of income.

My point is that all the retail growth going on in Cedar Hill is great and helps us financially, but it is not, and cannot, be a substitute for property tax revenue. We can’t drop our property tax rate hoping that an inherently unstable source of income will make up the difference.

Steady as She Goes…

If you watch or read the news at all, you no doubt have noticed that many cities are raising tax rates. The City of Dallas has just announced that they are raising their tax rate. Lancaster is raising their’s too. Here’s a list of some area cities that are planning a tax rate increase: Dallas, Lancaster, Bedford, Mesquite, Garland, Rockwall, and Frisco (yes, Frisco, and they have had as much or more retail development than has Cedar Hill). And the list goes on. Mansfield is going to lower their rate, but even so, it will still be higher than Cedar Hill’s.

Cedar Hill’s tax rate, by contrast, as remained the same for the last 4 years, and will remain steady this year too. In fact, the tax rate was lowered a bit in 1998 and again in 2001. That’s impressive considering it’s the lowest tax rate in the Best Southwest!

More impressive is that we are able to hire much needed police officers, firefighters, and a code enforcement officer, all without raising the tax rate. Were it not for all the growth, we would either be cutting services and personnel or raising the tax rate — or maybe even both!

What It All Means

The bottom line is that the City Council is trying to be good stewards of your tax dollars. That means we have to balance city needs with the prospect of a changing tax rate.

Make no mistake, the city has some financial challenges ahead. We have an aging water and sewer infrastructure, drainage problems, roads that desperately need fixing, and before long, we are going to need another fire station too. The needs are real.

But we will face these challenges together, at the right time, and in a responsible manner. So, are we money-grubbing politicians? No. We are your City Council — and we are working for you.

Budget Highlights

The 2006 Budget has been finalized. We will officially vote on it in an upcoming meeting, but for all intents and purposes, it is final. This year we had a number of important issues to tackle. I discussed some of these issues in one of my prior posts. See Refocus. I think we were successful in addressing some of the most important needs. Here are some of the key points:

More Police. We added 5 more police officers. Adding more officers puts more officers on the streets more of the time and will support our public safety as the city grows over the next year.

More Firefighters. We added 4 more firefighters and will purchase a new fire engine. More firefighters and new equipment gives us the ability to respond with firefighters and paramedics from the same station at the same time.

More Code Enforcement. We added a new code enforcement officer and will purchase computer software that will help all our officers track violations. The number of violations our officers must track can be overwhelming at times. A new officer and software will give them much needed resources to implement the vision for our neighborhoods. More stringent code standards will be implemented in the next few months. See Code Enforcement Report, Residents Mull New Ordinances, and City Wants Input on New Codes.

Drainage and Transportation. We set aside $100,000 (in addition to last year’s $125,000) to help find solutions to the drainage issues facing some of our neighborhoods. We also continued our practice of allocating funds to help offset the costs of future road construction projects.

There are many other important aspects of this year’s budget, but those are the highlights. I hope you will support us as we work toward the vision for our city.

Building the City’s Future

This week starts one of the most difficult and time-consuming weeks — Budget Week. We have had prior workshops with city staff about some of the main points of the new budget like how much revenue we can expect to have over the next year and how much more it is going to cost us to keep doing the things we are already doing. But this is the first time we have seen the entire document.

On Friday we received the preliminary budget. For those of you who have never seen a city budget (and I assume that is most of you), this thing is big. It is about an inch and a half of small, ledger-style type that only an accountant could love. But it is also one of the most important things we do as a City Council. The budget is the engine behind the vision.

This year’s theme is, “Building the City’s Future.” I think that is appropriate. Besides the growth and obvious construction that is going on, it conveys the idea that good cities don’t just happen by accident. It takes the dedication of good men and women to guide a city as it evolves. Where the city is today is a function of yesterday’s leadership. Where we will be tomorrow is a result of how good of stewards we are today. I look forward to the process.

What Issues Do You Want Addressed

As the City Council prepares for the fiscal year 2006, it would be helpful to have your input about issues you think need to be addressed in the upcoming year.

I have talked with many of you about this already. Several people want to see more strict code enforcement. Others want drainage issues addressed. Still others want to continue to emphasize public safety. Maybe you think there should be an ordinance addressing a specific concern. Whatever it may be, please let us know by commenting to this article.

It is never easy to to allocate the City’s finite resources to seemingly infinite needs. Cedar Hill is not a one-issue city. We, like all cities, have many needs, most of which citizens are not even aware. I am certain there will not be enough revenue to address all of the concerns. But as we work through this process, your constructive input will help us use what funds we do have available in the most productive way possible.

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  ~ Dorothy Nevill

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