Page 32 - CityofColleyvilleFY25AdoptedBudget

Short-term Factors
Shor t-Term Factors In|uencing the FY 2025 Budget
The FY 2025 budget was shaped by several key short-term factors, including adjustments to employee compensation and
bene ts, utility and drainage rate changes, capital project funding, and the continued emphasis on economic
development. These factors re ect the City's commitment to scal responsibility while maintaining a high standard of
service for the community.

. Salar y and Bene{ts:
Heal th Insurance Costs: The City absorbed a 7.5% increase in health insurance premiums (negotiated down
from 17.1%) and a 9.7% increase in dental insurance premiums, ensuring no rate increases for employees. This
commitment to competitive compensation and bene ts, especially for Public Safety employees, is critical for
attracting and retaining top talent.
Compensation Study: The budget includes funding for a full compensation study to be completed in FY 2025.
This study is expected to in uence future budgets, particularly in FY 2026 and beyond, as the City strives to
remain competitive in the dense DFW area. Attracting and retaining quality employees, particularly in Public
Safety, will require creative solutions moving forward.
. Fees and Revenues:
Utility and Drainage Rate Adjustments: Water and sewer base rates were increased to cover rising operating
costs, while drainage rates were increased as part of a multi-year plan aimed at building fund balance for
future cash-funded capital projects. For the average residential customer with a 1” meter, the combined water
and sewer base rate increased by $2.77 (7.9%), and the drainage rate increased from $10 to $12 per month.
No Major Fee Changes: Aside from adjustments in library fees, no signi cant fee changes were made for FY
2025.
. Capital Improvements:
Ongoing Investments: The City continues its focus on quality of life, public safety, and infrastructure
improvements. All projects in the ve-year Capital Improvement Plan are cash-funded using excess reserves or
grants, ensuring no reliance on debt nancing.
. Program Enhancements or Reductions:
New Homestead Exemption: The introduction of a 7% homestead exemption will help offset property tax
increases for residential taxpayers. There were no program reductions for FY 2025.
. Tax Levels and Use of Reser ves:
Increased Proper ty Tax Revenue: Due to in ation, public safety, and utility costs, property tax revenues
increased by $1.2 million. The property tax rate was raised to $0.276204 per $100 of valuation, up from
$0.260991 in the prior year. Sales tax revenues were budgeted at as collections have stabilized.
Use of Reser ves for Capital Projects: While no reserves were used for short-term operating costs, some
capital projects were funded through excess reserves, consistent with the City's nancial policy.
. Ser vice Levels and Assumptions:
Stable Ser vice Levels: Service levels remain unchanged for FY 2025. The City continues to prioritize public
safety and quality of life improvements, operating with lean staf ng and minimal overhead.
. Unfunded Mandates:
Monitoring for Impacts: Although no new unfunded mandates were introduced, the City continues to
monitor for potential state or federal requirements that could impact future budgets.
. Economic Development Strategies:
Continued Suppor t of Local Programs: The City continues its key economic development initiatives,
including the gift card program in the TIF fund. Residents are encouraged to shop local, as sales tax collections
directly bene t the City's revenue.
. In|ation Assumptions:
Budget Adjustments for In|ation: In ationary pressures were considered in this budget, particularly in the
supplies and utilities category. Increases in chemical costs, utilities, property insurance, and health insurance
were incorporated. Many contracts, particularly in IT and services, include automatic cost escalators tied to the
Consumer Price Index (CPI), which were factored into the overall budget.
. Demographic Assumptions:
Approaching Build-Out: As the City nears build-out, new development has slowed, with more emphasis on
renovations and remodels. This trend will likely require adjustments in the Community Development area for
FY 2026 and beyond.

City of Colleyville | Budget Book 2025 Page 32