Page 56 - GrapevineFY24 Adopted Budget

Key Expenditure Drivers and Assumptions

Personnel costs are based upon the assumption of full employment, with no addition of
permanent personnel during the next three years. The FY23 budget included market and merit
increases for general and public safety employees which led to $1.8 million (5%) in increased
personnel expenses from FY22 to FY23. In future year, expenses are expected to increase 4%
each year.

Supplies, Maintenance, and Services are projected to increase at a rate of 3-5% per year due to
record inflation. Costs increased 12% between FY21 and FY22.

Capital / Street Maintenance costs are derived from the five-year plan submitted by the
facilities, parks maintenance, streets and traffic divisions. The plan consists of a detailed
program of activities for each piece of capital infrastructure within the city.

Insurance costs include property and casualty coverage as well as employee medical, dental,
vision and life insurance coverage which decreased 25% between F21 and FY22. Insurance
costs are highly volatile and an increase between 3-5% is expected.

Debt Service costs will vary, as it is dependent upon several factors. As debt has been
restructured to take advantage of lower interest rates, the amount of property tax required to
support debt obligations (the I&S portion of the tax rate) will fall correspondingly as existing
debt is paid off. As the I&S portion of the debt rate decreases, the ability to generate additional
revenue for the General fund (the M&O portion of the tax rate) is limited due to rollback
provisions. Projections assume the city will maintain the tax rate at the current level of
$0.271775 or the No New Revenue Rate.

Transfers out include payments to the Capital Equipment Replacement fund for the acquisition
of new and/or replacement capital equipment, vehicles, heavy machinery, and technology items.
Transfers out also include funds earmarked for the Quality of Life CIP (QOL) fund and Crime
Control & Prevention District (CCPD) fund. The FY23 budget increases transfers by 9% and
over the next three years, similar increases are expected.

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