Page 22 - Colleyville FY21 Budget

low tax rate, strong financial performance, and substantial cash balances were the
primary reasons for the bond rating. These credit ratings for outstanding debt mean
the City’s bonds are considered to be of superior investment quality, resulting in
lower interest payments for the City.

STORMWATER DRAINAGE UTILITY FUND

In 1993, the City Council adopted a monthly fee assessed on residential and
commercial utility billing accounts for stormwater management. The Stormwater
Drainage Utility Fund supports the operation and maintenance of the City’s drainage
system and complies with federally mandated requirements for stormwater systems.

This fund is designated to maintain streets, sewers, and drainage ditches to manage
runoff from commercial and residential development, including related personnel and
operating costs.

The fund is projected to receive revenues of $978,508 in fiscal year 2021, primarily
from the collection of the monthly fee. The final annual debt payment for the
outstanding bonds are $127,169, and they will be paid off in fiscal year 2021. The
remaining funds support personnel and other operational costs. The TIF funded a
stormwater master plan that concluded in fiscal year 2020. The Drainage Utility Fund
could fund some of the prioritized recommendations from that master plan in coming
years.

SPECIAL REVENUE & CAPITAL PROJECT FUNDS

The City Council continues to be innovative in evaluating financing options for various
City programs. Use of special revenue funds and capital project funds include:

Hotel Tax Fund
In 1998, Colleyville City Council passed an ordinance establishing a hotel occupancy
tax equal to 7 percent of the lodging cost of a hotel room within city limits. Texas
state law mandates that the revenue derived from this tax must only be used for
expenses that promote the tourism industry, including (but not limited to)
convention/civic center facilities, general promotional and tourist advertising for the
City, and the encouragement, promotion, improvement and application of the arts.
Although authorized in 1998, the City did not have a hotel within its boundaries until
2017. Since that time, all revenue derived from the tax has been used on non-
recurring expenses relating to special events. However, beginning in fiscal year 2021
the City will allocate operating costs to this fund as authorized by state law. This
includes a significant portion of the City’s advertising expenses as well as personnel
costs for Colleyville’s Community Relations Specialist and partial personnel costs for

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