Page 13 - Euless ORD 2360 Adopted FY 23-24 Budget

Water and Wastewater Debt Reserve Reauirements

Water and wastewater revenue bond covenants require the City to maintain sufficient
reserves equal to the average annual debt service requirements. This debt reserve is in
addition to the working capital reserve required by the City's fiscal policies and is
maintained in a separate fund. Reserve levels in excess of the requirements of the
bond covenants are transferred to Water and Wastewater CIP.

EQUIPMENT REPLACEMENT FUND

The City maintains an equipment replacement program to accumulate funds for the
replacement of existing vehicles, equipment, furnishings and fixtures, and expected
facility needs including HVAC, roof, and elevator replacements. Funding is provided
annually by user departments in order to accumulate funds to cover the expected
replacement costs. Shortages in accumulated funds are supplemented with funding
from the Car Rental Fund.

RISK MANAGEMENT & WORKERS COMPENSATION FUND

This fund is used to account for the revenue and expenses applicable to providing
workers' compensation coverage for all City employees, as well as, general liability and
property coverage. The reserve in this fund has been $ 600,000 for over 20 years. This
proposed budget includes an increase to $ 1, 000, 000 as insurance claims and costs
have steadily increased.

SPECIAL REVENUE FUNDS

Hotel/ Motel Fund

The Hotel/ Motel Fund was established to account for a 7% hotel/ motel occupancy tax
allowed by the State of Texas. The tax is levied on the rental of a hotel/ motel room
within the City of Euless. Funds generated by this occupancy tax must be expended for
items that qualify in accordance with state law including the promotion of tourism,
programs which enhance the arts, historical restoration programs, and convention
facilities.

The hotel/ motel tax receipts are projected to increase slightly in FY2023-24 from the
current year budget. Historical preservation, conference center operations, and
contractual rebates are included in the budget for FY2023- 24. A one- time capital
expense for Conference Center Improvements is included in the budget. Expenditures
have increased to cover additional costs associated with contractual obligations for
revenue sharing at DFW Airport, the operation of the Conference Centre, as well as to
increase funding for the Arbor Daze festival.

201 N. Ector Drive, Euless, Texas 76039- 3595
817/ 685- 1400 Metro 817/ 267- 4403 Fax 817/ 685- 1416
www' culcsstx. gov
Ordinance No. 2360, Page 13 of 326 5