I recently sat down with Mayor Marion Bishop and City Manager Marty Mangum to talk about the 2025 city budget and what it means for the citizens of Llano. The conversation started with high level questions about what changes we’ll see this year as a result of the new budget which is about to be adopted; any new services to expect or a reduction of past services, and any investments the City must make in existing infrastructure. The discussion then went into some detail on specific assets and their financial performance, namely The JLK Event Center and Arena, the Lantex Theater, and the Llano River Golf Course all assets which are owned by the City. Finally we talked about what’s needed in the city that hasn’t been addressed in this year’s budget.
Given our interview was the day following publication of the article I wrote about the increase in utility rates here in the city, the mayor started with some follow up points that he wanted to make. Bishop told me that Council’s approach to this year’s budget was a 3.5% increase across the board for salaries and overall spending to keep it in line with inflation. Bishop said that when they started the process in March, they didn’t know that the cost-of-living index would fall dramatically lower to level out at 2.9% year to date. I asked if the budget was finalized, and Mangum said that it’s not. Mangum then added that they felt the overall increase to the average citizens residential utility bill would be an increase a 4.5% given the rate increases for water, sewer, and electricity, but that’s dependent on each individual household’s usage.
As we directed the conversation to the 2025 budget, Bishop said that there really aren’t any changes to existing services nor new services except for a decrease in the days that City collection station will operate (City Dump). That will be reduced by 1 day per week. The rest is status quo.
However, from an infrastructure investment perspective there will be several investments initially totaling over $1.3 million. These infrastructure investments include:
- A water study funded in the 2024 budget will be completed but any actions from that will come from 2025 budget
- $200,000 to rebuild feeder lines throughout the city for electricity distribution
- $400,000 for repainting and repairing water tower near the City Dump
- $700,000 for inspections of all sewer lines in the city via camera
- $550,000 for sidewalk repair on Ford St. near the bridge. The city will actually fund this with a $500,000 grant that requires a $50,000 match from the city so this only costs the city $50,000.
- Mangum explained the city partners with the Llano Parks Project organization and are helping with a ‘half pipe’ skateboarding park in one of the city’s parks, most likely in the Moore complex. The City will take over maintenance of it once complete.
- Water Distribution: At present there is no planning scheduled but both Bishop and Mangum would like to begin planning for water and sewer repair and replacement
The conversation then focused on a more detailed discussion over a couple of city assets. I asked both Bishop and Mangum to comment on 3 assets in particular that receive a lot of social media commentary from citizens as these assets generally post financial losses year after year. Specifically, I asked Bishop and Mangum to comment as to how these assets are performing financially and if they felt these assets are moving toward reducing their losses or not.
First, we talked about the JLK Event Center and Arena. Mayor Bishop spoke very favorably on the prospects for the JLK complex. He said several organizations have invested capital in the JLK this year and he feels we’re on the cusp of turning things around in the next year or so. He feels new ‘rodeo cutting’ events and more events in general will increase revenues. Based on the chart below, the JLK has historically lost between $50,000 and $90,000 over the past 7 years. 2024 shows a loss of almost $200,000 but that’s attributed to the capital investment from the city and other entities; city officials do not expect that elevated loss rate to continue. Mangum interjected that increases to the top line revenue has an added benefit of bringing more people to the city to spend money in our motels, restaurants, gas stations, and stores which bring more sales tax to the city.
A side note to this is that a common theme amongst city officials is that many venues in the city post a loss when looking at direct revenues and expenses, but they feel there is a monetary benefit in increased traffic flow in the city, increased spending in our businesses, and increases in sales taxes which helps fund a number of city operations and projects. Of course there is also an improved quality of life for those who partake in activities sponsored by the assets such as attending rodeos, watching movies and shows at the Lantex, using the Golf Course, and those who use the city’s swimming pool. So, although the benefits cannot be quantified monetarily these assets all increase the general wellbeing of the city and its citizens.
Next, we discussed the Lantex Theater. Mangum admitted this asset is not performing well and in fact is going in the wrong direction with revenues decreasing and expenses increasing each year. Bishop added that since COVID, movie theaters across the nation are losing money. It’s worth noting that many first run movies such as this summers box off hit Twisters, pulling in $350 million worldwide, hit the Lantex the same day the movies become available on Amazon Prime or other ‘watch from home’ services, which means citizens have the luxury of either going out for a theater experience or staying a home and viewing. Based on the table below 2024 will generate top line revenues of only $2,000 the lowest ever in the last 10 years including 2020 where the Lantex was shut down for a good portion of the year while expenses continue to grow. This year the theater will post expenses of $35,000 the 2nd highest even just slightly behind last year’s record expenses of $41,000. Clearly this cherished asset needs a plan to either stem expenses or increase revenues.
And finally, we discussed the Golf Course; I asked what was happening at the Golf Course Bishop quickly responded that Scott McDonough has been executing on his plan since taking over in October 2020 and they have seen dramatic improvements from that plan. Scott’s title on the city website is “Parks and Leisure Director, Golf Course Manager & Pro.” Bishop went on to explain that as a result of the plan Scott put in place, the golf course is leading the other assets in a more visible turnaround. Scott and his team inherited a course that had been in a steady decline in revenues and increase in expenses year over year losing almost $300,000 in 2020.* Under Scott’s leadership revenues increased 50% in 2021 and another 34% in 2022 with revenue exceeding $400,000 in ’23. Mangum and Bishop told me that at present 80% of the patrons of the course are from outside the City of Llano, and again boasted that these out of towners not only increase course revenues but also eat at our restaurants, shop in our stores and increase the City’s sales tax income. 2024 revenues are projected to exceed $500,000 for the first time in course history and although the course will post a loss of $178,000 that loss is the same loss posted in 2017 against revenues of only $220,000. In accounting terms, the same loss against revenues that are 2x are leading indicators of a turnaround meaning we are increasing revenues faster than expenses. Clearly something positive is happening at the golf course.
*COVID impacted the course both positively and negatively. The course was shut down for the entire month of April 2020 with prepaid fees being refunded thereby reducing revenue but maintaining all the same expenses. Yet golf was also one of the first activities to be restored in a world where many activities remained closed through the end of 2020 thereby drawing more customers to the course.
The final topic discussed were areas of the city that need the most attention and are still lacking a plan and funding to address. Both Bishop and Mangum agreed it was water: quality, quantity, and infrastructure. Bishop first spoke about the investment the City made in 2024 to gather budgetary costs to permanently increase the City’s water supply by increasing the capacity of both City dams as well as constructing a third dam. Bishop clarified that these are estimates and not yet planned since additional permitting, financing, and planning are all required, and all will consume significant resources to develop, but it’s a ‘first step.’ Bishop also said that he would like to see some of the new technologies such as horizontal boring deployed to tap into underground water supplies as well.
I think the quality comment is important. I can’t tell you how many times I hear from citizens in different parts of the city complain how the water coming out of their taps is brown, yet year after year our water quality reports come back clean and year after year, we fail to begin the process to replace our water distribution. We can blame past generations for not taking action, or we can decide now to do something for the future generations. Bishop and Mangum both agree this starts with a plan and every citizen should expect that this will be a multiyear project costing multiple 10’s of millions of dollars.
