Page 11 - FY2020Colleyville

rate that brings in additional revenue due to increased property values. The City
Council’s budgeting strategy is that 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 for specific programs or services.

Sales tax is the second largest General Fund revenue source. The City’s primary
commercial corridor, Colleyville Boulevard (SH26), is currently under construction
(expanding from four-to-six lanes with medians) until late 2019/early 2020. Fiscal
year 2020 sales tax is projected to remain flat compared to fiscal year 2019 as
construction wraps up. The City has been proactive and creative in supporting local
businesses during construction, and has created quarterly promotional programs that
have been extremely successful. We do not create programs to receive awards;
however, it is important to note that the Texas Municipal League and the Texas
Economic Development Council both recognized the creativity and innovativeness of
the programs with two state-wide awards.

Colleyville continues to prioritize and address the City’s critical infrastructure
including streets, water, wastewater, sidewalks/trails, and parks. This budget
includes a robust 5-year Capital Improvement Plan (CIP), completely funded with
cash, to insure infrastructure is maintained and built new where needed to maintain
an exceptional quality of life for residents and businesses.

There are two issues facing Colleyville that will begin in FY 2020 and continue forward.
First, the proposed budget accounts for H.B. 3535 which was approved by the Texas
th
Legislature during the 84 Legislative Session. This legislation will significantly reduce
franchise fee revenue. The bill essentially allows companies that provide
telecommunications and cable or video services to pick whether they want to pay
telecommunications franchise fees or cable/video franchise fees, but not both. The
proposed budget also reflects Colleyville nearing residential build-out and
transitioning to more of a redevelopment and rehabilitation phase by reducing
building permit and associated development fee revenue.

Priorities and Fiscal Year 2020 Focus
The proposed budget accomplishes a number of priorities, including the following
highlights:

• Proposes the effective tax rate

2019 certified values increased 7% in total compared to 2018 certified values.
The fiscal year 2020 proposed budget includes a proposed tax rate of
$0.306807/$100 of valuation, a $0.013993 reduction from the current $0.3208
tax rate. The tax rate of $0.306807 is the “effective rate,” which means that when
property values increase, the property tax rate is lowered in order to collect the
same amount of property tax revenue as the previous year, excluding new
construction. This is the second consecutive year the City will adopt the
effective rate. It is important to note that the increase in property taxes
is from new growth not budgeted in FY 2019 as well as new growth for
FY 2020.

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