RECAP: After a contentious budget season, Flower Mound Town Council adopts 2019-20 budget, tax rate

After a contentious budget season, Flower Mound Town Council unanimously adopted a $74 million budget for fiscal year 2019-20 and set its property tax rate at $0.4365 per $100 in assessed valuation—the town’s lowest rate in 30 years.


The adopted budget and tax rate differed notably from what was originally proposed by town staff. The final budget included about $1.2 million less in expenditures following cuts requested by council.


Cuts were made to the budgets of multiple town departments, including the police and fire and emergency services budgets.


At an Aug. 15 budget workshop, some council members floated the idea of cutting compensation raises for town employees. In the three council meetings following that workshop, residents packed Town Council chambers to object to the proposed cuts.


At the Aug. 19 Town Council meeting, Mayor Pro Tem Sandeep Sharma listed several line-items he wanted reconsidered and possibly removed from the budget, including purchases of emergency response equipment.


“Respectfully, I request that you consider what that means for future budgets if we move that can down the road,” Flower Mound Fire Chief Eric Greaser said in response to Sharma’s request. “We’re trying to be more efficient and effective in our job.”


Dan Licardo, Flower Mound resident and former U.S. Navy SEAL of 16 years, echoed the chief’s sentiments at a Sept. 16 meeting. Licardo said he first came to Flower Mound in 2015 to help first responders when the town was hit with severe flooding.


“You’re not ready for another flood—I’ll tell you that right now,” he said. “The equipment you guys have is good, but they need more.”


Additionally, at the Aug. 19 meeting, Sharma suggested the potential elimination or reduction of pay raises for town employees.


The final  budget allocates $2.1 million for 3% merit-based increases for non-public safety employees and a general 3% raise for all public safety employees.


Sharma said he believed the town should consider a “productivity-based” system when considering pay raises.


Town Manager Jimmy Stathatos said a merit-based system works for the town because it rewards employees who do their jobs well and does not reward those who do not meet expectations.


“I still believe that productivity-based [incentives] get people to give out the most,” Sharma said at the Aug. 19 council meeting. “It kind of allows the management to really motivate the people that are not highly motivated. At the same time, it’s not, like, ‘Hey, I’m going to get 3% anyway. So what is motivating me to work extra?’ And we’re spending money across the board even for those people who perhaps are not deserving.”


Stathatos said investing in personnel is essential to keep the town a competitive employer.


“It’s been very well-chronicled that the town is down by 10 officers right now,” Stathatos said, referring to the Flower Mound Police Department’s personnel shortage.


Both the Flower Mound Professional Firefighters Association and the Flower Mound Police Association released statements on social media about Sharma’s request to cut compensation.


“We had 25-plus members watch the budget meeting tonight, and we are very disappointed that Councilman Sharma would attack our pay, our retirement and benefits to save residents minimal dollars,” the firefighter association statement read.


The police association statement emphasized the importance of retaining good public servants.


“These employees ensure the residents have running water, clean parks, functioning traffic control devices, maintained streets, economic development, and many other services,” the statement read. “As such, these employees deserve to be recognized and compensated appropriately.”


After the public outcry, council discontinued all discussions about potential compensation cuts.


All but a few of the 17 residents who spoke Sept. 16 about the budget ahead of its adoption were in favor of the original proposed budget—the version in which employee compensation remained untouched and expenditures for capital improvement projects remained intact.


Flower Mound resident Sharon Gentry said at the Sept. 16 meeting she was opposed to the higher tax rate proposed by town staff and believed the council  needed to be more fiscally conservative.


“Economists have said that they expect a recession within two years,” Gentry said. “You know that means that Flower Mound homeowners will start to feel the pinch and will appreciate it if you have given them some relief on their property taxes.”


The final property tax rate of $0.4365 per $100 in assessed valuation was adopted Sept. 16 after two failed motions to adopt different rates.


Sharma first proposed a lower tax rate of $0.434 per $100 valuation.


However, Flower Mound Chief Financial Officer Debra Wallace explained the town has traditionally tried to maintain a budget reserve equal to 20% of its revenue. She said adopting a $0.434 tax rate would decrease the town’s revenue by about $271,000. Council would then have to cut expenditures by about $252,000 in order to maintain the 20% reserve, she said.


Though Sharma said he wanted to go through the “exercise” of figuring out where adjustments could be made, his motion died when no one seconded it.


Council Member Claudio Forest said he was in favor of the budget originally proposed by staff. He made a motion to adopt a tax rate of $0.4390 per $100 in valuation, a 2.77% increase from the 2018-19 rate.


Forest said although he believed the town could get by on a slightly lower rate, he did not believe it was a smart decision for the long term. Again, no one seconded the motion.


Council Member Jim Engel made the final motion—to adopt a tax rate of $0.4365 per $100 in assessed valuation. Engel said he would have preferred a lower tax rate but did not think it could be reasonably done without putting the town in more debt. 


With the newly adopted tax rate, a resident with a $250,000 home would have a property tax bill of about $1,091. That is about $6 less than it would be under the 2018-19 property tax rate of $0.439 per $100 in assessed valuation.  


“We’ve got sufficient cuts in the budget that the town can live with it,” Engel said. “And if the town can’t live with it, from a standpoint of, ‘We find things that we cut out of the budget that aren’t going to work,’ then I’d ask that they would come back to us, and we’ll figure out how we’re going to make it work.”

By Anna Herod
Anna Herod covers local government, education, business and the environment as the editor of Community Impact Newspaper's Lewisville/Flower Mound/Highland Village edition. In the past, Anna served as the reporter for Community Impact's San Marcos/Buda/Kyle paper. Her bylines have appeared in the Austin American-Statesman, Hays Free Press and The Burleson Star. She is a graduate of Texas State University's School of Journalism and Mass Communication.


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