From the Dallas Zoo to public transportation, City leaders have allocated taxpayer dollars in various ways; however, the budgeting process is murky at best.
The Dallas Express Podcast, hosted by Sarah Zubiate Bennett, explored some of the problems surrounding the City of Dallas’ lack of financial transparency. The City’s budget for the current fiscal year is $4.6 billion, up $1 billion from the 2018-2019 fiscal year.
Bennett, joined by Mark Nunneley, chief accounting officer at Ashford Inc., and Anthony Wilder, executive director of the Texas Government Accountability Association (TGAA), explained some of the nuances of municipal financial statements and how that data might differ from that of public or private organizations.
Nunneley, who has been helping Bennett in her task of outlining actionable recommended improvements to the City’s budgeting and financial statement process for nearly a year, referred to the publicly available paperwork for Dallas as a “cumbersome” 195 pages of “bits and pieces.”
Although the City provides two pages of what Nunneley calls a consolidated balance sheet and a consolidated profit and loss statement for the entire city, he went through the 195 pages and drafted a five-page financial statement.
“I mean, I know I’m being a little bit dramatic here, but even within your five pages of very accurate accounting, there are still lots of questions,” Bennett remarked.
“How can anyone make a decision regarding the management and the future of a city, especially a city like Dallas, without having actuals and these particular statements right that are able to just be overlaid?” she asked.
“So, you can say, ‘OK, we’re planning for this,’ and they don’t even know if this can yield this,” she added.
In response, Nunneley stressed that the City’s problem lies in its leaders using the budget as a short-term planning device without regard to the future.
“The budget really should not just look at the immediate for the next 12 months. It should look at the impact to the city long term and it does not,” he said.
“Things like infrastructure and deferred maintenance, it’s frustrating that a budget — any company’s budget — should include items like ‘deferred maintenance’ to keep things operating,” he added, noting that to him, these terms were being used as a way to “deficit spend.”
As previously covered in The Dallas Express, Dallas voters recently approved a $1.25 billion bond package that includes some of the state’s most expensive municipal propositions.
“A lot of these bond projects should have been general maintenance, but they are capitalizing them under a bond,” Louis Darrouzet, CEO of Metroplex Civic & Business Association, said in a previous interview with The Dallas Express. “It indicates that a lot of the City leadership are being careless with tax dollars from a financial perspective, and there’s not a lot of people paying attention to what the City’s doing. That’s the same recipe for disaster that many other major cities have fallen into.”
Nunneley echoed this sentiment while speaking with Bennett.
“From what I see, at least three out of four [propositions are for] deferred maintenance. Those are items that should have been budgeted. Those are items that you shouldn’t have ongoing long-term debt to pay for; they should be budgeted. … [T]he whole process is just a failure,” he said, pointing to the serial tax increases that have occurred.
“We’re absolutely screwed,” Bennett chimed in, “I mean the fact that a multi-billion dollar organization is not looking at a condensed balance sheet.”
He then turned to Dallas’ unique position as a shrinking city within a rapidly growing metropolitan area.
“The taxes keep increasing … so we’ve got to take control of the situation now, or it’s going to become very problematic for citizens to continue to pay and to attract new business into the city of Dallas,” he said.
Bennett pointed to Wilder’s organization TGAA, which aims to increase financial transparency within government, as a potential solution to this looming problem.
TGAA works through an interlocal agreement promising better disclosure of financial data, exposure of potential conflicts of interest, strict adherence to the Texas Open Meetings Act, and more in the interest of creating a different ethical standard.
Discussing his inspiration for TGAA, Wilder recounted how he attended 50 different meetings over the course of three years on the Carrollton City Council and found himself to be the only one “not getting paid somehow.”
“I desperately wanted to have people come up and share who were informed,” he said.
To that end, he encouraged Dallas residents to look up their district and reach out not only council members but also their staff.