Page 11 - Colleyville FY19 Budget

rate that brings in ever increasing amounts of revenue due to increased property
values. Any tax rate above the effective rate (i.e. that brings in more revenue than
the prior year, excluding revenue from new construction) must be fully justified, with
the reasons for adopting such a rate clearly communicated.

Sales tax is the second largest revenue source, however, the City’s primary
commercial corridor along Colleyville Boulevard (SH26) is under construction until at
least mid-2019. Fiscal year 2019 sales tax is projected to have two percent growth
from fiscal year 2018 year-end projections due to the potential for construction to
impact traffic to nearby businesses. This is a higher projected growth rate than what
was projected in fiscal year 2018, as sales tax receipts have performed better than
originally anticipated, despite construction. The City has been proactive and creative
in supporting local businesses during construction, and has created quarterly
promotional programs that have been extremely successful and well received.

Colleyville’s history dates back to its beginnings as a farming community in the
1850s. Even when the City was incorporated a century later, it was still a rural
community. Much of our infrastructure – including streets, utility lines, buildings and
other community assets—are aging and inadequate to serve residents and
commuters in the burgeoning northeast Tarrant County area. In developing the
2019-2023 Capital Improvement Program in coordination with the fiscal year 2019
budget, staff has focused attention on the most urgent priorities and addressing those
situations that pose the highest risk if not addressed. Staff also carefully considers
which investments will serve to extend the useful life of an asset -- essentially
postponing the need for full replacement for a number of years -- when making
funding recommendations.

At the budget work session presentation on August 7, staff reviewed a five-year
forecast for all operating funds. That forecast includes estimates for expenditures
and the revenues necessary to continue balancing the budget. Ad valorem revenue
was projected with growth of 0% in fiscal year 2019, reflecting an effective tax rate,
and sales tax was projected with limited growth for the reasons mentioned above.
The forecast for General Fund expenditures includes general cost increases of 3.2%
for materials and contractual services required each year, as well as personnel costs
to continue funding appropriate market and merit adjustments and increasing
healthcare costs. These forecasts help staff and the City Council focus on the long-
term budgetary implications of current funding decisions. They also help to put long-
term goals into perspective relative to the overall resources available.

Priorities and Fiscal Year 2019 Focus

With this budget, resources are allocated according to the priorities of our citizens
and City Council, while maintaining the conservative fiscal approach that has allowed
Colleyville to attain and maintain an AAA bond rating. Cost increases have been
absorbed via reductions in other expenses or by identifying alternative funding
sources, to allow any new revenue to be allocated for priority areas.

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