Page 100 - CityofColleyvilleFY23AdoptedBudget

The ve-year forecast (shown below) was prepared and presented to the City Council
to guide decision making during the budget process and ensure that long-term
implications are considered. The forecast served as a caution to adding recurring
expenditures unless absolutely necessary and generated discussion about the need
to reduce operating expenditures in order to achieve the goal of adopting the
effective tax rate.

Signi cant revenue assumptions include a modest increase in revenue from assessed
valuation next scal year with between 3.5% and 4.5% increases in following years
between minor new development and reappraisals on existing property. With
adopting the effective tax rate in FY 2023, no new revenue was budgeted for ad
valorem taxes beyond that gleaned from new development. A total sales tax revenue
increase of 8.49% is forecasted throughout the ve years presented, with annual
increases ranging from 2% to 2.5%. While this revenue has had landmark years since
2020, staff fully expects the growth to retract to a more normal rate in the near future.
In fact, staff has conservatively budgeted a decrease in sales tax coming into FY23,
although this is an unlikely scenario. Staff is also forecasting that our building permit
revenue to decline steadily over the ve years as the City reaches build-out. In total,
revenue is assumed to increase an average of 3% throughout the forecast.

The expenditure forecast for future years re ects costs that slightly outpace revenues
on a year-to-year basis. The largest category, personnel costs, carry the highest
increase as staff anticipates continuing the City’s merit increase program every year
as well as a comprehensive market survey commencing in 2022. Cost increases for
materials or contractual services were considered individually and using the most
recent data staff has. This forecast will be updated annually and will be used to guide
future budget discussions as well.

Much of the City’s priorities in the next ve years are rooted in our cash-funded
General Fund
capital improvement plan. This forecast includes the strategy of holding our tax rate
as low as possible while taking valuation increases as needed, relying on restricted
revenue, and freeing up dollars for use on our multi-year CIP.

Summary

City of Colleyville | Budget Book 2023 Page 100