Page 13 - Colleyville FY21 Budget

There are two revenue pressures facing Colleyville that began in FY 2020 and will
continue forward. First, the proposed budget accounts for H.B. 3535 which was
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approved by the Texas Legislature during the 84 Legislative Session. This legislation
will significantly reduce franchise fee revenue by allowing companies that provide
telecommunications and cable or video services to pick whether they want to pay
telecommunications franchise fees or cable/video franchise fees, but not both. The
second issue reflected in this budget is Colleyville’s approach toward residential build-
out, which necessitates transitioning to more of a redevelopment and rehabilitation
focus. This transition is poised to reduce building permit and associated development
fee revenue in the coming years.

Priorities and Fiscal Year 2021 Focus
The adopted budget accomplishes a number of priorities, including the following
highlights:

• Maintains a low tax rate

2020 certified values increased 2.2% in total compared to 2019 certified values.
The fiscal year 2021 proposed budget includes a proposed tax rate of
$0.304365/$100 of valuation, a $0.00244 reduction from the current $0.306807
tax rate. For the past two years, Colleyville has adopted the calculated no-new-
revenue rates, meaning that the City’s property tax rate is adjusted downward as
property values increase. This is designed to keep taxpayers’ bills from increasing
on average, with the City instead relying on the tax revenue from new property
developments to fund budget increases. This is the third consecutive year the
City will adopt a rate at or below the no-new-revenue tax rate.

• Provides a balanced budget

The fiscal year 2021 proposed budget is a balanced budget, consistent with both
the City’s Charter and state law requirements. Operating expenditures are funded
with operating revenues. Operating funds maintain a fund balance above the 90-
day reserve at all times, as required by the City’s financial policies. The City’s
practice is to a maintain fund balance of at least 100 days, which is accomplished
in the proposed budget.

• Better aligns specific expenditures with restricted funds

Staff examined the budget line-by-line in an effort to place expenditures in the
most appropriate fund. This effort led to the identification of three full-time
positions currently being funded in the General Fund that should be contained in
the Hotel Tax and Colleyville Economic Development Corporation (CEDC) funds.
The restrictions on the Hotel Tax Fund are that expenditures must be limited to
(1) efforts to attract guests to our hotel industry and (2) seven other specific
stipulations, one of which is to advertise the City to individuals and businesses.
Staff identified the following positions as being qualified for this funding source:
the Community Relations Specialist whose job is to advertise Colleyville, and the

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