Page 49 - City of Bedford FY20 Approved Budget

DIVERSIFICATION AND STABILITY. In order to protect from fluctuations in a revenue
source due to fluctuations in the economy and variations of other factors, a diversified revenue
source will be pursued and maintained as a stable source of income.

CONSERVATIVE ESTIMATION OF REVENUE. In order to mitigate the effects of
fluctuations in a revenue source due to fluctuations in the economy and variations of other
factors, all revenues will be conservatively estimated with the exception of property tax and
inter-fund transfers.

COST/BENEFIT OF ABATEMENT. The City will use due caution in the analysis of any tax
or fee incentives that are used to encourage development. Ideally, a cost/benefit (fiscal impact)
analysis will be performed as a part of such caution.

INCENTIVE COST FUNDING. The Operations & Maintenance (O&M) property tax
revenues generated from new construction taxable values added to the July Certified Roll each
year, will be transferred to the Economic Development Fund for economic incentives.

In addition, the General Fund will budget ninety-nine (99) percent of sales tax revenues each
year to help cover the cost of its general operations and transfer one (1) percent of the sales tax
revenues to the Economic Development Fund for economic incentives.

Moreover, on an annual basis, the City will review the variance between actual General Fund
revenues and expenditures. Should the variance equate to $100,000 or more in excess of
expenditures, fifty (50) percent of the total variance shall be transferred to the Economic
Development Fund, provided the General Fund’s unassigned fund balance has met the minimum
reserve requirement of 20% of budgeted expenditures.

NON-RECURRING REVENUES. One-time or non-recurring revenues will not be used to
finance current ongoing operations. Non-recurring revenues should be used only for one-time
expenditures such as long-lived capital needs. They will not be used for budget balancing
purposes. Non-recurring revenues may be allocated to a specific fund(s) with the approval of the
City Council.

PROPERTY TAX REVENUES. All real and business personal property located within the
City shall be valued at 100% of the fair market value for any given year based on the current
appraisal supplied to the City by the Central Appraisal District. Reappraisal and reassessment
shall be done regularly as required by State law.

In January of 1995, the citizens of Bedford approved an additional one-half of one percent sales
tax for property tax reduction, as provided for in the State Property Tax Code. This resulted in a
reduction of the operations and maintenance property tax rate of approximately eleven cents in
the subsequent fiscal year. This reduction is called the sales tax adjustment rate, and is re-
calculated on an annual basis.

When comparing the adopted property tax rate for the City of Bedford to surrounding cities, the
City of Bedford tax rate should be combined with the sales tax adjustment rate to arrive at a tax
rate that is comparable in method of calculation. This total rate should fall within a reasonable

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