Page 52 - Watauga FY21 Budget

BUDGET OVERVIEW

Other taxes - Include receipts from the operation of bingo halls in the City.

Utility Franchise Fees - A percentage of local gross receipts remitted to the City
by each privately owned utility (electric, telephone, gas, waste and recycling
collections, and cable) providing services to Watauga citizens for their use of the
City’s right-of-way. This can be the right-of-way used by the companies for their
utility lines or the use of our streets for their vehicles. Revenues are based on
terms of a franchise agreement between the City and each utility. The majority of
franchise revenue is based on a percentage of gross revenues from the utilities.

Projected revenues for these fees are generally based on population estimates.
Recently, weather conditions and the economy have been significant factors in a
decline of revenues as citizens have been more frugal in utilization of resources,
which has led to lower utility revenues. In addition, the Texas Legislature passed
Senate Bill 1152 which undercut the collection by cities of right-of-way rental fees
from companies that provided both cable and telecom services. Beginning
January 1, 2020, these companies now pay the greater of the two charges
measured on a statewide basis, but not both. We have seen a decline in these
revenues as a result. We are anticipating the revenues to remain fairly flat for
FY2020-2021. These fees currently total 6% of General Fund revenues.

Licenses and permits – This includes construction permit fees, animal licenses,
electrical and plumbing licenses and other licenses and permits. Over the last
few years, this revenue has fluctuated due to construction activity in the City;
however, as the City is approximately 96% built out, this revenue is not expected
to increase as construction
permits are expected to
decline.

Projections are based on the
established historical base of
issued permits and the
expectations of inspectors
and economic development
staff for new permits and
buildings. In FY2017-18, a
55-home subdivision was
completed, and another 70-
home subdivision is planned
for FY2020-21. This revenue
source is estimated to bring in
4% of General Fund
revenues for FY2020-21.

Intergovernmental revenue - Intergovernmental revenue consists of a payment-
in-lieu-of-tax (PILOT) from the enterprise funds based on a percentage of
revenues from the water and sewer utility systems and the storm drain system.
This is similar to the fee charged to other utilities for the use of City right-of-ways
except for City-owned utilities. Projections are based solely on revenues
projections for those revenue generators. Such funds total 4% of General Fund
revenues. 44