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APPROVED BUDGET FISCAL YEAR 2022-2023

Enterprise Fund will contribute $3,789,197 Fleet Service Fund will contribute $233,615
Community Services Half Cent Sales Tax Fund will contribute $378,170 Anti-Crime Half Cent Sales
Tax Fund will contribute $1,022,133Other Indirect costs will contribute $219,525
General Fund Reserves

The General Fund balance should be adequate to handle unexpected decreases in revenues plus
a reasonable level for extraordinary unbudgeted expenditures. The minimum fund balance
should be 90 days computed separately from designated components of the fund balance. A
surplus typically exists in the General Fund each year and is transferred to a Special Projects
Capital Fund after 90 days fund balance allowance is considered.

Capital Budget Policies

New capital programs will not be budgeted and implemented until the full annual operating and
maintenance costs and financial impacts of the program are known. The replacement of existing
capital that is worn out, broken or costly to maintain will not be deferred in order to protect the
City's capital investment. A multi-year capital improvement plan is updated annually and is
available as a separate document. The funded portion of the multi-year capital improvement plan
is located in the Capital Improvements section of this document.

REVENUE POLICIES

Property Tax

The tax rate should fall within a reasonable range of comparable cities and should be adequate
to produce the revenues needed to pay for approved City services. Each year the city will
calculate the no-new-revenue and voter approval tax rates in accordance with the State of Texas
Truth in Taxation laws. If the City Council proposes a tax rate that exceeds the voter approval rate
that citizens will be able to vote on the proposed rate. The Notice of Public Hearing on Tax
Increase is located in the Appendix. The City adopted a tax rate decrease of approximately $0.011
cents to $0.614043 per $100 valuation for 2022-2023.

Section 5.42 of the City’s Charter limits the maximum tax rate to $1.50 per $100 property
valuation. This is one dollar lower than the $2.50 allowed by state laws. The City’s total tax rate
provides funding for general debt and operations. So, any increase in operations or debt costs
must be absorbed by growth in property values, any offsetting reductions in costs, or by an
increase in the tax rate. Debt issued for proprietary purposes shall primarily be supported by
associated revenues (e.g. water and wastewater fees for Enterprise Fund debt). However, the
city may pledge the City’s taxing authority to proprietary fund debt as a way to lower risk to
investors and associated costs.

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