Budget Shortfall: Chad West Asks City to Rethink Spending on Leased Properties
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Every year, the City of Dallas spends about $4 million to rent commercial space for its employees. In light of the City’s steep $38 million budget shortfall, some have suggested that’s a potential area to slash expenditures.
During a Tuesday meeting of the City Council’s Government Performance and Financial Management Committee, chairman Chad West suggested now might be a good time to look at how much Dallas is spending on leased property.
“Interim City Manager Kimberly Bizor Tolbert sent out a list of all the lease-holding items we have in the city, which totals millions per year,” West said. “It was the first time I’d seen that consolidated list. It raised some questions for me and I think for some other folks. With our budget coming up and we’re seeing budget cuts across the city, this was an item I felt was important for us to address before we receive the city’s budget on Friday.”
Back in mid-May, Dallas Chief Financial Officer Jack Ireland announced the city was facing a $38 million shortfall. Interim City Manager Tolbert’s proposed biennial budget is slated for release Monday.
The Dallas City Council adopted a $4.62 billion budget last year after much debate about the property tax rate and how to address a massive deficit in the Police and Fire Pension Fund. Ultimately the council lowered the tax rate for the eighth consecutive year, from 74.58 cents to 73.57 cents per $100 assessed valuation.
A budget workshop is set for Tuesday, Aug. 13. Budget town hall meetings are scheduled in each City Council district beginning Aug. 15.
Properties Leased by the City of Dallas
Interim Assistant City Manager Donzell Gipson reviewed a presentation Tuesday showing the city spends almost $4 million annually on 44 acquisition leases.
“We’re here to provide an update on the costs, the use, and the future action tied to our acquisition leases,” Gipson said.
Nine of the 44 leases don’t come with a base rental cost but have some ancillary costs like utilities, Gipson explained. Fourteen of the leases are tied to the Women, Infants, and Children (WIC) supplemental nutrition program, so the state reimburses the lease costs.
The Dallas Police Academy at 5310 Red Bird Center Drive is the most expensive lease at approximately $1.1 million annually. The department agreed to a lease at the current facility in 1990 and 34 years later the academy is still there. A new Law Enforcement Training Center at UNT Dallas will be built for an estimated $140 million, funded in part by the taxpayer-approved 2024 bond program.
“At some point in the near future, once that groundbreaking [happens] and all those construction documents and everything that’s required to actually build that new academy [are complete], that cost rolls off the books,” Gipson said.
A Dallas Water Utilities building lease will be reduced once a portion of the operation is relocated, he added. Additionally, building inspectors will eventually be housed at 7800 N. Stemmons Freeway “as we continue to reimagine how we’re going to work through getting that building open,” the assistant city manager explained.
Gipson reviewed other upcoming changes that will ultimately reduce costs on the lease spreadsheet. Watch the Aug. 6 Government Performance and Financial Management Committee meeting.
West said there was “sticker shock” at first glance but noted that a lot of the leases are reimbursed by the state or a plan is in place for the future.
Gipson said staff will return to the GPFM Committee to talk further about building leases.
