Page 60 - Grapevine FY20 Approved Budget

Mixed Beverage Tax collections have experienced steady year-to-year growth. Although FY19
collections represented a 17% increase over the prior year, the projection is for 3% growth
annually for the next three years.

Licenses, Fees & Permits include franchise fees, building permits and other development and
code-related fees. Franchise fees declined by 10% in FY19, after increasing by 4% the previous
year. Franchise fees are projected to decline by $500,000 in FY21 due to the state legislature’s
ruling on telecom payments in municipal rights-of-way. This revenue stream is projected to
remain flat over the next three years.

Fines, Forfeitures and Charges for Services include municipal court fines, parks and recreation
service fees, library fines, vital statistics fees and internal charges to non-General fund
departments for employee health insurance, fleet maintenance and information technology
services. This revenue stream is projected to increase 4% annually over the next three years.

Interest and Miscellaneous Revenues include interest income from investment,
intergovernmental revenue, insurance reimbursements, subrogation revenue and lease income
from the collocation of communications antennae on city property. As interest rates are not
projected to rise substantially in the near future, overall revenue in this category is projected to
remain relatively flat over the forecast period.

Transfers In consist of payments in lieu of taxes from outside funds to the General fund for
administrative services and contributions to the Debt Service fund for principal and interest
payments on each fund’s portion of outstanding debt obligations. This revenue stream is
projected to increase 3% annually over the next three years.

Key Expenditure Drivers and Assumptions

Personnel costs are based upon the assumption of full employment, with no additional personnel
during the next three years. In addition, there are no planned reductions in force.

For FY20, Council authorized employees to receive an across-the-board market adjustment pay
increase equal to 3% of their current annual base pay rate. The city’s compensation plan relies in
part on the Employee Cost Index (ECI), an indicator produced by the federal Labor
Department’s Bureau of Labor Statistics and a market study conducted by an outside consultant.

During the City Council budget workshop, staff presented survey results from Grapevine’s 18
comparison cities. Final survey results at that time revealed the average increase planned by the
other 18 cities was at 3%. The City Council subsequently approved merit increases of 2% for all
general employees not topped out and 5% step increases for all public safety employees not topped
out. The increases will be subject to the employee successfully passing their annual review.

The forecast for the next three years a 2% across-the-board market adjustment pay increase each
year.

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