Page 25 - Benbrook FY2021

GENERAL FUND

The City Staff is confident that the City's current financial position allows Benbrook to grow, to improve infrastructure, to enhance community
facilities, and to upgrade existing facilities and services. However, due to the COVID-19 pandemic and Texas Senate Bill 2 property tax
legislation, Council and Staff decided to defer General Fund financing of any major new programs and service enhancements. The 2020-21
General Fund Budget is primarily a continuation of current services and programs with a few critically needed enhancements.

DEBT SERVICE FUND

Debt service principal and interest payments reflected in the 2020-21 Debt Service Fund Budget include general obligation payments that are
financed through current property tax collections, along with payments for Stormwater Utility and TIF debt. The Stormwater Utility and TIF debt
payments are paid for by the Stormwater Utility and TIF Funds.

City Staff works closely with the City's financial advisor to ensure that the additional debt service requirements are financed without significantly
altering the City's annual debt service requirements and without increasing the property tax rate. With the financial advisor's guidance, bonds
are typically scheduled for sale in alternate years to allow commercial development and property values to increase assessed valuations to the
level necessary to maintain or even lower property tax rates. At the time that the 2020-21 Budget was adopted by the City Council, a bond
election was planned or projected for 2020-21 to construct a new municipal complex.

The sale of certificates of obligation in 2005 to finance the Tax Increment Financing (TIF) projects impacted the Debt Service Fund Budget in
2005-06, 2006-07, and 2007-08. These principal and interest payments are scheduled for payment by the TIF Fund in the 2020-21 Budget
and in future years. In 2012, the City of Benbrook sold $1,280,000 in certificates of obligation for TIF projects; these costs are included in the
TIF Fund for 2020-21 and future years. Certificates of obligation were sold for TIF projects in 2014; these costs are included in the TIF Fund
for 2020-21 and future years. The bonds will be retired in 2021-22.

The sale of certificates of obligation in September 2007 was timed to allow for the payment of these expenses to be financed through the
Stormwater Utility fees that were implemented October 1, 2007; the costs of these certificates have no impact on the General Fund or Debt
Service Fund since they are to be paid through special use revenue and not with property taxes.

For the 2020-21 fiscal year, the City’s total tax rate was reduced from $0.62777 to $0.6225 due to a reduction in the Voter-Approval tax
rate. The General Fund portion of the property tax rate was reduced from $0.60647 to $0.6015. The Debt Service Fund portion of the
property tax rate was also reduced from $0.0213 to $0.0210.

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