Page 23 - City of Colleyville FY22 Adopted Budget

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 allocated 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 the
Colleyville Center Manager and its Sales and Event Specialist. Because all or part of
these positions are dedicated to advertising the City and bringing guests in from out
of town, they meet the state’s tourism requirement for hotel taxes, allowing the City
to shift the costs away from the General Fund. This reliance on restricted revenue
sources for operational costs is part of the City’s ongoing initiative to keep its property
tax rate as low as possible.

This fund is budgeted to bring in $250,500 in anticipated revenue while spending
$250,054.

Colleyville Tax Increment Financing (TIF) District
The Tax Increment Reinvestment Zone (TIRZ) District, also known as the TIF, was
created in 1998. The primary goal of the district is to encourage quality commercial
development in the City by using ad valorem revenues from property value growth
since the creation of the district, within the district for infrastructure improvements
and economic development. The district boundaries predominately occupy property
located along State Highway 26, comprising 633 acres of land area. The base value
for the district was $75,821,735 in 1998. Incremental values subsequent to January
1998 are taxed at the City’s adopted property tax rate. However, the ad valorem
revenues are utilized to spur economic development within the district rather than
being allocated to the City’s overall budget.

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