Page 33 - FY 2023-24 ADOPTED BUDGET

IMPACT OF THE 2023-24 BUDGET ON BENBROOK’S FUTURE

OPERATING FUNDS

The Operating Funds began the 2023-24 year with a fund balance of $19,566,771. The Operating Funds are
projected to end the new fiscal year with a fund balance of $19,572,541 based on revenues in the amount of
$25,437,557; expenditures in the amount of $25,770,272; the transfer of $338,485 from the Stormwater Utility
Fund; an estimated transfer of $300,000 from the Sanitation Fund; $250,000 to the Asset Replacement Fund; and

$50,000 to the IT/Facilities Fund.

Financial experts and bond rating agencies recommend that the fund balance or reserves be maintained at a
minimum level equivalent to ten percent of the City's annual operating budget; three months of operating expenses
is the preferred level. Reserves are projected to be 76.0 percent of total operating expenditures during 2023-24.
This level of reserves is more than sufficient to meet established criteria. The City's informal policy of maintaining
reserves at $8,000,000 and at a minimum of three months of operating expenses is also more than satisfied.
Benbrook is more than prepared to face and to conquer economic and financial challenges in the current year and

in future years.

GENERAL FUND

The City Staff is confident that the City's current financial position allows Benbrook to grow, to improve
infrastructure, to enhance community facilities, and to upgrade existing facilities and services. However, due to the
COVID-19 virus pandemic, the Texas Senate Bill 2 3.5% property tax cap, high inflation, possibility of a recession,
and the construction of a new municipal complex, Council and Staff decided to defer General Fund financing of any
major new programs and service enhancements. The 2023-24 General Fund Budget is primarily a continuation of
current services and programs with a few critically needed enhancements.

DEBT SERVICE FUND

Debt service principal and interest payments reflected in the 2023-24 Debt Service Fund Budget include general
obligation payments that are financed through current property tax collections, along with payments for
Stormwater Utility debt. The Stormwater Utility debt payments are paid for by the Stormwater Utility Fund.

City Staff works closely with the City's financial advisor to ensure that the additional debt service requirements are
financed without significantly altering the City's annual debt service requirements or without increasing the
property tax rate. In fiscal year 2020-21 $22.0 million is General Obligation bonds were issued for the construction
of a new municipal complex that will be an anchor to a new downtown. The current City Hall, Police Station, and
Senior Center are outdated and inadequate. All three buildings will be combined into one large municipal complex.
There should be little effect on the City’s tax rate because the new debt replaces existing debt that is maturing. In
addition, the TIF ended in November 2022, which the City pays approximately $1.0 million plus to each year. The

$1.0 million the City used to pay to the TIF is now used to service the new debt.

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