Page 51 - Benbrook FY20 Approved Budget

CITY OF BENBROOK 2019-20 ANNUAL BUDGET

BASIC FINANCIAL GOALS

Due to Benbrook's dependence on property taxes as the primary source of General Fund and Debt Service Fund revenue, the City was not
as adversely affected by the slowdown of the economy as experienced by many Texas municipalities since September 2001. In fact, Benbrook
has proven to be an exception to this trend. In 2010 a Wal-Mart opened in Benbrook and is serving as an anchor to secure new commercial
development. Benbrook initially experienced an increase in sales tax revenue from Wal-Mart and other businesses. However, a slight decrease
in sales tax revenue occurred from 2012 through 2016 as a result of the closing of other retailers within Benbrook. This project resulted in a
reduction in the number of shoppers along this corridor due to the inconveniences created by the construction. With the completion of this
project in 2017-18, Benbrook’s revenue from sales tax has increased significantly.

In years past, Benbrook was vulnerable to a loss of residential property tax revenue. In March 2004, the City Council approved an ordinance
establishing an ad valorem tax limitation on residential homesteads of the disabled and persons sixty-five years of age or older and their
spouses, as authorized and defined by the Texas Constitution, Article VII, Section 1-b and Texas Tax Code Section 11.261. When the over-
sixty-five limitation was enacted, Benbrook’s property tax exemptions for senior citizens increased, but not as exponentially as projected.

Over the past years, the City Council exercised caution in determining the annual property tax rate. The decline of the housing market that
impacted portions of the United States is not yet evident in Benbrook. The home foreclosure rate in Benbrook has been well below national,
state, and local trends. The 2019-20 Budget reflects the lowering of the property tax rate to $0.62777 per $100 valuation. The City’s tax
rate is still at a level to generate sufficient property tax revenue should these economically-negative trends invade Benbrook in the near
future.

The 2019-20 Budget insures that Operating Fund reserves are maintained at a minimum of $8,000,000. The 2019-20 Budget is designed
to finance basic operating services at a high-level of service to Benbrook’s residents and to retain dedicated and valued employees. The
Budget includes limited capital purchases, new programs, and enhancements.

The 2019-20 Budget continues implementation of the City's financial policies and goals. The 2019-20 Budget is a balanced budget in that
no funds have to be borrowed to provide the proposed level of services. The 2019-20 Budget includes the anticipated utilization of the City's
unrestricted reserves. The projected year ending fund balance for the General Fund and Debt Service Fund in the amount of $8,731,684 is
more than adequate to provide for any normal emergency. The projected reserves at year-end are sufficient to maintain the City's current
bond ratings by both Moody's Municipal Services and Standards and Poor’s Investor Service.

In 2012, Standard and Poor’s raised its rating on the City of Benbrook’s general obligation debt to AA- from A+ based upon the stable
economic outlook. The upgrade reflects Standard and Poor’s assessment of the diversification of Benbrook’s local economy, indicated by retail
sector growth and recent property tax rate reductions, which, though still somewhat high, are competitive for the region. Analysts at Standard

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