Page 18 - Watauga FY21 Budget

BUDGET MESSAGE FOR FY 2020-2021

Fiscal Year 2020-2021 Financial and Economic Outlook

The financial plan as presented in the budget should be considered from the broad
perspective of the specific environment within which the City operates. The City of
Watauga is located in Tarrant County and is part of the Dallas-Fort Worth Metroplex
that has a total population of 6.5 million people. The City of Watauga encompasses 4
square miles of which 96% is developed. The 2010 census reflects a population of
23,497.

Property tax revenues are a major revenue category for the City’s General Fund,
comprising 46% of all revenues. This heavy reliance on property tax revenues is a
significant challenge as the community is 96% built out. Over the past several years,
the City has seen property valuations increase from 9.2% to 13.5%. This year’s net
taxable values as certified by Tarrant Appraisal District came in at $1,597,254,264, an
increase of 1.5% over prior year.

A significant portion (22%) of the city’s general operating revenue is derived from sales
tax. In FY2019-2020, sales tax collections are expected to end the year down
approximately 8% from budget due to the pandemic and related restrictions on
businesses. Projections for FY2020-2021 are estimated to be approximately 6% down
from prior year. The City continues its economic development and redevelopment
strategic planning that is essential for the City to increase its sales tax revenues and
reduce its dependency on property taxes to fund basic City services.

During FY2019-2020, the Watauga Economic Development Corporation adopted a
Five-Year Strategic Plan. The City’s economic development goals include attraction of
quality visually appealing businesses, as well as revitalization and investment in areas
that have seen some deterioration of economic activity. Efforts to maintain and grow
our sales tax base continue to be a high priority. In FY2018-2019, the Parks
Development Corporation, a Type B sales tax fund, was renamed to the Economic
Development Corporation and the primary focus shifted from parks to economic
development. Although the focus shifted, the WEDC is committed to ensure the quality
of life projects that help promote economic development activities continue and is
evident by the funding of the splash pad project, monument signs project, and a digital
poster sign to be located at Capp Smith Park.

BUDGET HIGHLIGHTS – ALL FUNDS

The total budget for FY2020-2021, including transfers between funds and capital
projects is $47,236,770. This represents a decrease of $8,429,251 when compared to
FY2019-2020, largely due to a decrease in capital project funding from prior year.
Funding for planned capital projects and equipment this fiscal year is $15.99 million in
comparison to $25.05 million last fiscal year. Capital equipment purchases in an amount

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