Page 22 - Benbrook FY2021

Debt Service Fund) revenues and transfers in total $22,988,167. General Fund revenues total $21,268,900 and Debt Service Fund revenues
total $1,719,267. The transfer of $733,366 is scheduled from the Stormwater Utility Fund to the Debt Service Fund and a transfer of $501,203
from the TIF Fund to the Debt Service Fund. The transfer of $500,000 is scheduled for transfer from General Fund to the Capital Projects Fund
for the purchase of a Fire Truck. The transfer of $22,439 is scheduled from the Road Damage Fund to the General Fund to finance street
repairs for roadways damaged by natural gas utility truck traffic. No reserves were required to balance the Budget.

The 2020-21 budget does not include any decision packages. With the COVID-19 virus pandemic and new Texas Senate Bill 2 3.5% property
tax cap it was decided that this budget year the City should better position itself for these potential unknowns and loss of revenue.

USE OF RESERVES

For the 2020-21 Budget, the Benbrook City Council established $8,000,000 as the ideal minimum reserve total for the combined operating
funds (General Fund and Debt Service Fund). In 2020-21, the Council expects to meet this challenge and still be able to increase employee
benefits, enhance services to the public, and maintain or lower the current property tax rate - without significantly impacting the City's superb
financial condition. The Operating Funds Budget for 2020-21 does not include the use of General Fund reserves, other than a planned transfer;
the Operating Funds fund balance is projected to increase from $8,840,625 to $8,954,197.

The 2020-21 Budget reflects the use of $500,000 from General Fund. The City philosophy is to save for future projects by making transfers
from the General Fund to the Capital Projects funds each year. The General Fund budget is balanced with these transfers in mind. The transfer
of $500,000 to the Capital Asset Replacement Fund to purchase capital outlay items in the current year and in the future. General Fund
revenues, excluding transfers, are projected to exceed expenditures by approximately $482,108. By using $500,000 in unrestricted fund
balance and transferring $22,439 from the Road Damage Fund, the fund balance of the General Fund is projected to increase from $8,496,220
to $8,500,767 by the end of 2020-21.

The 2020-21 Budget does not include the use of Debt Service Fund reserves to finance principal and interest payments for General Obligation
bonds. For this fiscal year, an estimated $109,026 will be added to Debt Service Fund reserves. The fund balance of the Debt Service Fund
is projected to increase from $344,404 to $453,430. Reserves are restricted; the only allowable use is to pay principal on general obligation
bonds and certificates of obligation bonds, interest on bonds and certificates, and agent fees.

DECREASING OF THE PROPERTY TAX RATE

The City’s property tax rate is always a focus of the budget. After reviewing the change in assessed valuations and considering potential
commercial development in the upcoming years, Council established the property tax rate at $0.6225 per $100 valuation. The 2020-21 rate
is $0.00527 lower than the 2019-20 adopted rate of $0.62777. The General Fund portion of the property tax rate was reduced by $0.00497
from $0.60647 to $0.6015. The Debt Service Fund portion of the property tax rate was lowered by $0.0003 from $0.0213 to $0.0210.

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