Page 61 - Grapevine FY20 Approved Budget

Supplies, Maintenance and Services are projected to increase at a rate of 3% per year. Supplies
have risen at an average rate of 2.9% over the past six years, and are projected to increase by 3%
annually. Maintenance costs have actually decreased by an average rate of 1.9% over the past
six years and are projected to remain relatively flat. Service costs have increased an average of
3% over the past five years and are projected to continue that trend over the next three years.

Capital / Street Maintenance costs are derived from the five-year plan submitted by the
facilities, parks maintenance, streets and traffic divisions. The plan consists of a detailed
program of activities for each piece of capital infrastructure within the city.

Insurance costs, which include property and casualty coverage as well as employee medical,
dental, vision and life insurance coverage, have risen at an average rate of 10% the past 5 years.
Costs during the three-year forecast are projected to increase at an average rate of 7% annually.

Debt Service costs will vary, as it is dependent upon several factors. As debt has been
restructured to take advantage of lower interest rates, the amount of property tax required to
support debt obligations (the I&S portion of the tax rate) will fall correspondingly as existing
debt is paid off. As the I&S portion of the debt rate decreases, the ability to generate additional
revenue for the General fund (the M&O portion of the tax rate) is limited due to rollback
provisions. In an attempt to maintain the tax rate at the current level of $0.284271 or the
effective rate, some financial considerations must be made.

A preliminary study has indicated that based on current economic and market conditions, the city
will need to issue additional debt in upcoming years to sustain the current M&O rate. The
projected additional debt service dollars available and projected bond issuance amounts are as
follows:

Fiscal Year Additional Debt Service Available Projected Bond Issuance

2021 $ 1,917,855 $ 23,500,000

2022 963,248 11,500,000

2023 1,599,563 19,000,000

Transfers out include payments to the Capital Equipment Replacement fund for the acquisition
of new and/or replacement capital equipment, vehicles, heavy machinery, and technology items.
Transfers out also include funds earmarked for the Quality of Life CIP (QOL) fund.

Transfers to QOL in the three-year forecast window total $9 million. As the CCPD is solely
supported by sales tax, it is projected that $3.5 million annually will be needed to support the
CCPD over the next three years.

53