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Hospital district zoning approved by Marble Falls council; concerns aired over city spending, fund reserves

MARBLE FALLS — The vitals continue looking good for a proposed $200 million hospital complex with City Council’s approval this week of a zoning request and site plan.

Meanwhile, at least one businessman is urging Marble Falls officials to cut the police force by half and hold off on buying a new fire truck to save money until the city’s financial picture improves.

During the meeting Aug. 16, the council unanimously approved Scott & White Healthcare’s application for a planned development district for the future Lake of the Hills Regional Medical Center on Texas 71 just west of U.S. 281.

The council also approved the site plan for a medical clinic, which is the first phase of the project. Construction starts in 2013.

“We are glad to be this far,” said Mayor George Russell.

The Temple-based nonprofit plans to build a new medical facility on more than 110 acres.

The clinic will operate on a septic system until new wastewater lines are built, said Caleb Kraenzel, the city development services director.

More site plans will be required for each additional phase of the project, he added.

The entire medical facility — estimated to cost about $200 million — will also include an imaging center and ambulatory services by 2016, as well as an in-patient hospital tower by 2020.

Also during the meeting, the council conducted the first public hearing on the proposed budget and property tax rate for fiscal year 2011-2012, set to begin Oct. 1.

Discussions related to the budget and city finances prompted former councilman, mayoral candidate and local businessman Russell Buster to suggest the council adopt a “common-sense policy on economic response” for future budget expenditures.

For instance, the coming purchase of a new fire truck for $500,000 could have been avoided if the fire department had not overused the current fire truck, Buster said.

“We are allowing spending on things way too quick for who we are,” he added.

Furthermore, the city could save $1 million annually if the Police Department is reduced from 28 to 14 officers, Buster said.

“I want y’all to think about what you could do with $1 million,” Buster added. “And, I want the citizens of Marble Falls to pay attention to the budget. Otherwise, they could get steamrolled for additional expenses they should not be incurring.”

In the meantime, spending had to be cut by about $2 million to balance the budget, there is a hiring freeze for city staff positions and no tax increase is expected, officials said.

Nevertheless, the budget leaves the city with a general fund balance of only $3,352, City Manager Ralph Hendricks said.

In addition, the city’s general reserve fund dwindled recently to $625,000, far below the recommended amount of more than $2.1 million, he added.

“Our reserve fund is still not at the point where we need it to be,” Hendricks said.

Mostly likely, the city will have to find more revenue during the next budget cycle, he added.

“Unless the economy takes off like a rocket,” Hendricks said. “However, we don’t have any indication of sales tax collections growing.”

Another reading of the budget is Sept. 16. Final adoption is required no later than Sept. 20, Finance Director Margie Cardenas told the council.

The council moved on to discuss the proposed tax rate of 64.35 cents per $100 of property valuation for the new fiscal year, which doesn’t change from the current rate.

Originally, the council voted 5-2 to maintain the current rate for 2011-2012 during the Aug. 2 meeting.

At the time, Russell and Hurst dissented over concerns about reserve funds, among others.

During the most recent meeting, Councilman John Packer wondered if a higher tax rate should be considered.

“I’m OK where we are — I’m just curious,” Packer said, adding later in a reference to the fund balance: “I just hate having only $3,000.”

“I agree,” Councilwoman Jane Marie Hurst said. “If we keep cutting (spending) — it is not going to work.”

However, Councilman Ryan Nash voiced opposition to a tax rate increase.

“I don’t think it is the right thing to do,” Nash said.

Instead of raising the rate, the council could collect more revenue from other sources, such as water or sewer fees, Nash added.

Additional hearings would be required Aug. 23, Sept. 6 and 13 if a higher tax rate is proposed, Cardenas told council members.

“I am real uncomfortable about re-opening this discussion,” Russell said.

However, the mayor indicated he would consider scheduling a session Aug. 23 to discuss the rate.

“I will take this under advisement and see where it will go,” Russell said.

Councilwoman Sharon Pittard Aug. 2 championed maintaining the rate at the current level.

“Every (tax) increase is a decrease in what citizens have,” Pittard said at the time.

She was not at the most recent council meeting.

According to city officials, each 1-cent increase above the current and proposed rate of 64.35 cents produces about $57,000 for city coffers. Also, the rate of 64.35 cents produces about $965 for each property valued at $150,000.

Also during the meeting, the council:

• Awarded a contract of more than $470,000 to Nelson Lewis Inc. for the Avenue H wastewater line improvement project.

• Awarded a contract of more than $4.2 million to Archer Western Contractors for improvements to the existing wastewater treatment plant, pending approval by the Texas Water Development Board.

• Did not extend a temporary moratorium on temporary banner signs.