Page 9 - NEXT YEAR BUDGET DETAIL REPORT

City-wide recreation center, which has been a widely-requested service by Colleyville
residents for many years. Staff and Council determined that a new debt issue to purchase
and renovate this property was in the City’s best interest and would be met with a positive
reception. The bonds were issued in December 2022 for a par amount of $10,030,000 and
are set to be amortized over a period of 20 years with the potential to pay the debt off early
in 2030. The debt is secured through the City’s property tax revenue.

 Operating costs for the City’s parks and recreation improvements: the newly acquired
recreation center is one example of a multi-year initiative to improve the City’s
beautification and parks and recreation options for its citizens. The City’s long-term capital
improvement plan has included major renovations to the Senior Center, the installation of
medians and trees along State Highway 26, and additional amenities to the City’s park
facilities. Higher staffing and operating costs are necessary in order to maintain these
improvements, and the City has already added two new parks positions for FY23. Next
fiscal year’s budget proposal includes over $400,000 in staffing and operating costs for the
new recreation center in addition to a new full-time position dedicated to irrigation
maintenance across the City’s properties. Increased janitorial and overall maintenance
costs for our facilities are also anticipated beginning in FY24, which will provide further
pressures to the City’s revenue streams.

Property Tax Rate Implications

Even with record-breaking sales tax receipts from the past few years, Colleyville remains a
residential-heavy city, meaning its property tax receipts are the primary funding source for
services. Property values all over Texas have experienced tremendous growth, and Colleyville is
no exception. While the City has seen close to $70 million in new property growth in both the
current and previous years, Colleyville has relatively little developable acreage for new
development. This means that at some point service growth will need to be shouldered by existing
property values that are reappraised annually. Each year, careful consideration is given to the
amount of revenue (and associated tax rate) needed to provide services, and the City Council’s
budgeting strategy that any tax revenue increases must be fully justified for specific programs or
services remains a focal point. As the City maintains lean services and a business-like mindset, no
property tax increases were required for the past five years, which is a feat Colleyville is proud of.
While the City’s taxation philosophy is the same, the FY24 budget and revised 5-year forecast
recognizes inflationary pressures as well as the aforementioned expansion of service-levels
required for staffing new and renovated Parks and Recreation facilities. As such, the budget
proposal this year comes with a proposed increase over the no-new-revenue tax rate in order to
provide the City with necessary financial resources through its multi-year forecast.

2023 certified values increased 10.4% in total compared to 2022 certified values, which includes
a total of $69,728,625 in newly developed property. Additionally, average residential taxable
values have increased over 12% from last year, from $650,119 to $730,776. Both of these factors
are integral when considering the upcoming year’s tax rate. As of this writing, the City is proposing
a total property tax rate of $0.260991, which is a $0.004627 decrease from the current rate of
$0.265618. New construction is expected to net the City $180,000 in revenue, while the rate
adjustment will net close to $1.13 million.

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