September 22, 2022

The FY 2023 Budget:  A Collaborative Effort

The fiscal year 2023 budget, adopted unanimously by the City Council, is reflective of the broader economic environment marked by a high rate of inflation and an incredibly tight labor market.  Cities are not immune to these trends, and as costs are rising across the board, so too is the cost of providing municipal services.  This budget prioritizes maintaining service delivery and addressing our most pressing challenges, while holding the nominal tax rate flat, for now the fourth year in a row.

Employee recruitment and retention are at the forefront because the persistent staffing shortages we’ve been experiencing across numerous departments directly impact our ability to meet residents’ needs and expectations.  The current market for skilled labor and professional talent is a particularly difficult one for state and local governments, which typically can’t compete with private industry pay.  Bellaire is of course not alone in that regard, but add to the equation the significant organizational change and uncertainty we’ve experienced over the past few years, and it’s easy to see why we’re so focused on our staff.

The adopted budget includes a 3.5% merit-based step increase for eligible employees, per the City’s existing pay plan, plus a 2.5% cost of living adjustment for all employees (while those add up to 6%, it’s effectively a 5% increase for FY 2023 based primarily on the timing of when each goes into effect).  That’s a percentage point higher than was originally proposed, both in response to inflation and as a policy statement by Council that our community values city staff and the essential services they provide, and believe they should be paid fairly.  To the extent not already achieved by the foregoing increases, Council also raised the minimum wage in the general pay plan to $15 an hour.  All of these decisions are coupled with our commitment to conduct a formal compensation study in the coming year, to measure where we stand relative to market, including a good hard look at potentially restructuring the pay plan as it hasn’t always worked so well for us.

Relatedly, to help ensure the organization is right sized and with positions distributed appropriately among departments, we may also undertake a staffing model study, possibly in conjunction with the compensation study.  In the meantime, staffing adjustments for the coming year include reducing our reliance on contract labor in solid waste operations by bringing two positions in-house, while budgeting adequately for additional outside professional support that will likely be needed in Development Services given the extent to which that department remains understaffed.

The budget allocates $3 million in federal American Rescue Plan Act funding to the Capital Improvement Plan for regional flood mitigation partnership projects.  Also in the CIP are necessary repairs and renovations to the Public Works campus, and water and wastewater system and equipment improvements.  The anticipated cost to construct a new dog pound is fully funded, and we’ll be scheduling one or more workshops in the next couple of months to continue that discussion and hopefully finalize plans.

From start to finish this year’s budget process was superb.  What surely could have been an awkward time for a new City Manager to arrive, in the middle of developing a budget she hadn’t prepared but would ultimately be responsible for implementing, wasn’t at all.  She transitioned quite seamlessly into the process, took ownership of it, and by the end managed to put her own touches on it.  This was a truly collaborative effort among Council, and between Council and staff, and in the final product it shows.