The city of Pflugerville’s fiscal year 2009 was characterized by dichotomies between profit and retrenchment, financial savvy and expensive missteps.

Interest rates fell across the county as struggling banks slowed their lending. The City’s Finiancial Advisor, Bill Harrison, advised City Council members at a Jan. 13 meeting to issue $11.5 million of certificates of obligation while interests rates were down to 5.3 and 5.16 percent. The Council locked in at those rates for capital improvement projects to Pflugerville Parkway, Kelly Lane, Heatherwilde north, Pflenning Lane, and Pflugerville Parkway East.

In addition, Standard & Poor’s Ratings Services improved the city’s standard longterm rating and underlying rating for existing general obligation debt from A+ to AA-. The improved credit rating come due to the city’s continued economic expansion and ability to maintain strong reserves while managing significant growth pressures.

Recession affected Pflugerville in more ways than lowering its interest rates. The city’s growth was juxtaposed to a virtual halt of business expansion. To court business to Pflugerville, City Council members unanimously approved the Pflugerville Community Development Corporation’s use of 4B fund – money from sales tax revue – as incentives for three companies to either expand or relocate their operations in Pflugerville. PCDC allocated more than $529,000 to Advanced Integrated Technologies, EVS Metal and JG Media, Incorporated also known as Community Impact Newspaper over the next several years and will monitor the progress of each company’s use of the incentives based on the number of jobs generated.

The city’s fiscal year 2009 budget was approximately $75.6 million with a more than $24.4 million going to capital projects. The council approved $14.5 million in bonds for capital improvement projects, including renovations to the Pflugerville Community Library. This debt, along with the outstanding city debt, accounted for $0.1769 of the City’s $0.6140 tax rate.

The City Council began planning for the fiscal year 2010 budget in April and by July passed the operating budget of almost $51.5 million, with $21.6 million is allocated for the general fund, with $24.6 million for the utility fund and about $5.2 million going toward debt services for the upcoming year. Despite the country’s recession, council members unanimously approved lowering the property tax rate to $0.6090 per $100 value. Part of the reason Pflugerville was able to cut taxes is the 21 percent increase the city saw in sales tax revenue during the 2009 fiscal year.

Included in the city’s 2010 budget was close to $2.6 million allocated to build two roads, a bridge and a regional detention pond property owned by developer Terrell Timmerman. The pond and a flood plain were budgeted by the city to deal with storm water runoff from the Stone Hill shopping center, but the project came to a standstill in October along with all of the city’s discretionary spending when Klotz Associates engineering firm estimated the project’s cost to be approximately $18 million.

Budget items put on hold by the apparent $15 million miscalculation were annual merit raises for city employees and funds designated for the city’s image project.

Mayor Jeff Coleman said the $18 million estimate appears to be significantly inflated, and though the final numbers for the project should be available by Nov. 10, the city believes the actual cost of the project will fall closer to the estimated $6 million. Coleman also said that despite the unexpected cost, the city’s financial outlook is by no means bleak.

“[City officials are] going to figure out what we need to do, in the short term and in the long term, in order to pay for this project at whatever level it comes back at,” Coleman said at the Oct. 27 City Council meeting. “My goal personally is that over the next number of months we come back and say ‘We’re in great shape, we knew we were in great shape … raises are back on and everything is the way we planned on it being.’ That’s my personal goal. That’s what I’m going to work toward. That’s what I’m going to do everything I possibly can to make happen.”

A report by H.R. Gray suggests that the change in scope and subsequent increase in costs can be attributed to the development agreements and subsequent direction by the then City Engineer to modify and increase Klotz Associate’s scope of work.

While Klotz Associates presented six alternatives, ranging in cost from $2.3 million to $7.6 million, members of the council hope to have a decision on the alternatives by February of 2010.

In the wake of this financial misstep, the city welcomed Felix Benavides as the new city engineer. With a degree in civil engineering from the University of Texas, Benavides worked at the Texas Department of Transportation in the Safety and Maintenance Division, for the city of Austin and for the city of Bee Cave, where he served as the city engineer/director of Community Services since 2007.before joining the city of Pflugerville on Sept. 21.

At the same time Terri Waggoner came to Pflugerville as the city’s new public information officer. Waggoner hold a degree in mass communications from Texas State University and joins the city after seven years as the marketing specialist for the city of Round Rock Parks and Recreation Department.

As Pflugerville welcomed new employees, it also saw the end of former city manager David Buesing’s 29-year tenure with the city.

Following an executive session and a 5-0 vote, members of the Pflugerville City Council approved terminating the employment contract of Public Works Director David Buesing, a longtime city employee who was previously the city’s police chief and city manager.

Lauri Gillam served as interim city manager after Buesing until the position was perminantly filled by Brandon Wade. Wade has worked the cities of Galveston, Alvin, Richland Hills and Dallas holding positions that included Deputy City Manager, Assistant City Manager, Director of Public Works and Municipal Utilities, and Director of Community Development.

“As the new City Manager [Brandon Wade] is about to come in [next month], we realized that it might become an uncomfortable situation for all parties,” said Pflugerville Mayor Jeff Coleman. “As a result, we [council and David Buesing] came to a mutual decision that it was best if David retires early next year.”

Buesing will receive six months pay, as well as a severance pay equal to another six months pay and will be compensated for unused sick and vacation time totaling $172,748.

Buesing was once the city’s only police officer, followed by the very first police chief for the department. In 2004, he was promoted to city manager after being talked into the position by former City Council members.

After five years as the city manager, a split decision at the May 26 council meeting named Buesing as the new public works director and Gillam as the interim city manager. City officials and documents cite city growth as the reason for the organizational change, effective this past May.

Two months after voting to freeze the 2010 fiscal budget, in response to the Wilbarger Regional Detention and Flood Control Project, council unanimously voted to lift the freeze and allow for normal spending.

“The state of our budget is exceptional,” said Coleman. “Our goal is to protect the citizens’ money, and we are now comfortable with the cost of the project and know that it will not affect us paying our bills.”

Some policy changes recommended by H.R. Gray and already put in place include no more open-ended “multiple task” agreements (like the one the city has with Klotz Associates), obtaining council approval for projects where costs exceed five percent of the original contract, having finance staff attend internal, monthly meetings about the city’s Capital Improvement Projects, as well as providing the council with project updates on a quarterly basis. In addition, minutes will be taken at all meetings with contractors and no meetings will take place at bars or restaurants.

More discussion about policies and procedures to help prevent another situation like the Wilbarger Regional Detention and Flood Control Project from occurring is expected to place early next year.