Page 164 - Haltom City FY 22 Budget

CITY OF HALTOM CITY ANNUAL BUDGET, FY2022 Supplemental Information

MULTI-YEAR FINANCIAL OUTLOOK
General Fund

The Multi-year Financial Outlook for the General Fund is to continue to see increases in revenues
while budgeting expenses at an average of two percent increase while still building the overall fund
balance.

The long-term outlook in revenues is likely to be greater than projections, but just as with the
current budget, projections are developed by taking a conservative approach. Just the growth from
economic development should bring in the projected property and sales tax revenues. Because of
the financial affects of the Covid Pandemic to the commercial industry, the Tarrant County Appraisal
District lowered many commercial accounts values. In future years, these values should not only
return to normal, but increase. We feel the growth in values will align more to double digit value
increases that we have seen in years prior to the pandemic. Our sales tax base will also grow with
new restaurants and retail development expected in the IH-820 Corridor. We also have new retail
occurring throughout areas of the city that were not on our sales tax base in prior years such as
Gomez Western Wear, and new gas station/restaurant combo scheduled to open soon. The two
completed industrial parks are now leasing spaces to many new tax-producing industry’s which
should be a tremendous sales tax benefit for the City this year and in the future. For the 2020-2021
budget year the City’s sales tax was up almost 14% over the previous year. Continued healthy
revenues in both sales tax and property tax will determine the amount of expenses in future years.

Future expenditures will be focused on remaining competitive with surrounding cities for employee
compensation and benefits. As a long-term goal of the City Council, they wish to retain and attract
high-quality staff as the city continues to operate with a very modest number of employees. When
a city is forced to forfeit yearly salary adjustments, there is a tendency to fall further behind like
markets. It can be very costly to try to catch up in future years and often leads to the inability to ever
catch up. Since the city has experienced this in the past, it is still slightly behind neighboring cities
for several positions/salaries. Rather than doing the usual cost of living raises for employees, the
city budgeted for a market adjustment increase to get positions closer to market for like positions
in the cities in which we compete. Other operational expenses include the vehicle replacement
program, and the information technology replacement plan. Decision package items or one-time
expense items will be considered in future years when they generate efficiencies and effectiveness
and the revenues for both property tax and sales tax continue in an upward and favorable trend.
Another long-term goal is to address critical facility and infrastructure needs. The city will continue
to find ways to fund these items so that they have little to no effect on the citizens of the community.
Debt capacity has been structured in previous years so that his can be accomplished without an
increase in the I&S portion of the property tax. Fortunately, the new commercial and residential
growth has been an effective way to expand the overall values to broaden the tax base and lessen
the burden on citizens. Because of the increases in values, the City was able to lower its property tax
rate to its lowest in thirteen years. Building the tax base is the most effective way of accomplishing
this. Not only do we strive to build the tax base, but we also want to build our reserve balances. Our
multi-year financial plan reflects these goals.