Page 144 - Cover 3.psd

ADOPTED | BUDGET

Overview of Special Revenue Funds

Promotional Fund - The Promotional Fund provides economic development services for the City.
This fund is supported by a 7% hotel/motel occupancy tax, which was established by a state law by
which municipalities are allowed to assess a tax of up to 7% for hotel/motel occupancy. This revenue
source is used to promote tourism and to attract new industry and business to the City. It is estimated
that the Promotional Fund will receive occupancy tax proceeds in the amount of $300,000 for fiscal
year 2022/2023. Interest income is projected to be $4,278. Total Promotional Fund revenues for the
new fiscal year are projected to be $304,278. Total expenditures are projected to be $304,278.

Donations Fund – The Donations Fund derives a significant portion of its revenue from a $1.50
contribution made by citizens and commercial businesses through monthly City utility bills. Donation
Fund revenue also includes other donations and investment income. Revenue projections for
2022/2023 are $242,646. These contributions are allocated for library needs, humane services, and
public art. Budgeted expenditures for 2022/2023 are $228,411.

Special Investigation Fund – Revenue for this fund is received from Federal and State forfeited
funds and reimbursement from neighboring cities involved in the Mobile Data Terminal (MDT)
program, and the Automated Fingerprint Identification System (AFIS) program. Revenues from
forfeited funds are dependent on which cases go to court and whether or not a judge releases funds
to the City. These revenues fluctuate year to year depending on cases involving court awards. The
Special Investigation Fund includes an appropriation of fund balance of $186,800 for fiscal year
2022/2023. These are unobligated forfeited funds received in previous years used for one-time,
non-recurring expenditures. Total revenues, including the appropriation of fund balance, are
projected to be $290,500. Total expenditures are projected to be $290,500 for fiscal year 2022/2023.

Drainage Utility Fund – This fund accounts for the monthly fees charged to residents and
businesses to pay for the cost of drainage improvements throughout the City. The fee is based on
a residential or commercial unit’s usage of drainage facilities. The fee varies slightly based on zoning
category, with total expenses of $2,722,080.

Gas Development Fund – Revenue for the Gas Development Fund is generated from natural gas
development. In June 2006 City Council adopted a resolution creating a conservative policy on the
use of natural gas development revenues. The policy was established to avoid over-reliance on
these revenues and to establish how the revenues would be used. Caution was taken in considering
uses for gas revenues because it is difficult to predict well production and long term production
normally means the production decreases over time. In general the policy guidelines establish three
areas for using the money: (1) to bridge the gap of sales tax revenue reductions, (2) to use “one
time” revenues for projects or non-recurring capital needs, and (3) to use the revenues for expanding
the City’s economic base and for economic development. Total revenue projected for fiscal year
2022/2023 is $711,844. Total expenditures for fiscal year 2022/2023 are $711,844.

Traffic Safety Fund – This fund accounts for the use of reserves for traffic safety initiatives and
one-time traffic safety equipment purchases. This fund previously generated revenue from the Red-
Light Camera Traffic Safety program that was eliminated by a change in state law in 2019. Total
expenditures for 2022/2023 are estimated at $112,721 funded by an appropriation of fund balance.

140 NRH | TEXAS