Galveston city leaders are planning to spend about $86 million on various projects around the island during the next year, including a new water line on the West End and about $22.6 million worth of street projects and underlying drainage work, officials said.
The projects are part of an overall $240.2 million budget the city council is considering before the next fiscal year begins Oct. 1. The city’s operating budget would round out to about $153.7 million, compared with $152.7 million this year, Finance Director Mike Loftin said.
The capital improvements budget — about $86.4 million, a 14.5 percent increase from last year — would be funded with cash on hand and bond money Galveston voters approved in 2017, Loftin said.
The proposed capital projects include various street, drainage and water infrastructure projects.
An $18.3 million water line from the 59th Street pump station to Scholes International Airport would establish a backup water supply for West End homeowners, particularly as the main supply line now for the West End is aging, officials said. The budget also would fund underlying water line work for county paving projects and repairing water valves, City Manager Brian Maxwell said.
City budget planners also set aside about $6.6 million for the reconstruction of the Pirate’s Beach wastewater treatment plant and a series of other sewer projects, Loftin said.
The city council on Thursday voted unanimously to propose a tax rate of no more than 56.1 cents per $100 valuation and set a public hearing on it for Aug. 23 during the next council meeting. The proposed rate is unchanged from the current year, meaning taxpayers’ bills would only increase if their property value increased, officials said.
The police pension continues to play a big role in the city’s budget, with $460,000 set aside for increased contributions and acknowledge the figures could change as the city continues negotiations with the police pension board and the state.
The biggest changes this year are the addition of 12 new staff positions, six of which are police positions funded at least in part through a federal grant, Loftin said. The six police positions were approved last year, but after the budget was adopted, he said.
Repairing a major water leak in November saved the city about $522,000, but water supply increases passed down from the Gulf Coast Water Authority added about $635,000 in costs, he said.
The city also has set aside about $460,000 for additional payments to the police and fire pension funds, according to the finance department. Galveston City Council voted earlier this year to increase pension contributions to fire and police department retirement plans.
The police pension faces about a $32 million unfunded liability with a payoff period close to 45 years, according to the latest actuarial report provided by the Galveston Employee’s Retirement Plan for Police.
The city is required to get the plan to a payoff period of 40 years or less, Maxwell has said. The Texas Pension Review Board has urged a payoff period closer to 30 years, Maxwell said. The police pension board wants that figure closer to 25 years, he said.
“We need to really look at the whole structure of the pension plan and going to a different type of plan,” Councilman Craig Brown said.
Looking at alternatives has been part of the process, Maxwell said.
City officials recently met with representatives from the state’s Pension Review Board and received some guidelines to follow to get the amortization rate under 30 years, Maxwell said.
In addition to negotiations, city officials have been exploring legislative changes to possibly get local officers into the state pension plan, which would help, Maxwell said.
It likely would take longer than the next legislative session, which begins in January, to get the law changes needed to switch to the state pension plan, City Attorney Don Glywasky said.
Council has at least one more meeting before the Sept. 13 meeting when council members are expected to vote on the budget.