Page 38 - Forest Hill FY20 Annual Budget

CITY OF FOREST HILL

FRANCHISE FEES
The City of Forest Hill receives franchise fee payments for the use of its streets and right-of-ways.
Companies involved in sanitation, telecommunications, and utilities must pay the City for the use of its
streets and right-of-ways. Franchise fees are a significant source of income for the City, amounting to an
estimated $600,000 per year for the last several years. Due to legislation that was enacted to take effect
January 1, 2020, cable companies now will pay significantly less to Texas municipalities for franchise fees.
Although the full effects of the legislation is not yet known, the City is estimating franchise fees will drop
to $270,000.

HOTEL / MOTEL TAX

Motel taxes are 13% (6% State of Texas and 7% City of Forest Hill) of the cost of the stay. The taxes are
remitted to the City monthly by each hotel/motel property in the City. Periodic audits may be
conducted by the Director of Finance.

OTHER GOVERNMENTAL FUND REVENUE SOURCES

The City has other types of revenue. Two categories are 1) Licenses, permits and fees estimated to collect
$355,000 and 2) Fines and forfeitures estimated to collect $849,700. Licenses and permits include items
such as construction permits, impact fees, fence permits, pet licenses, and garage sale permits. Fines and
forfeitures include items related to the Municipal Court and Police Department such as traffic
enforcement ticket collections, code enforcement collections, and warrant collections.

WATER AND SEWER SERVICE REVENUES

The City’s Water and Sewer Fund is a proprietary fund that is set up to run much like that of a private
business / for profit entity, by recovering operating, debt and capital costs from user charges and
maintaining a reserve for emergencies. The major revenue sources are water, sewer, drainage, and
sanitation (trash) service charges. Bills are sent to residents monthly and fees collected. Consumption
trends are monitored for providing services and projecting revenues. The City purchases water and
sewer services from the City of Fort Worth. A franchise contract is in effect for sanitation. The City
provides drainage services.

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