Page 9 - WestworthVillageFY25ApprovedBudget

9

10-Year Projection Assumptions

The council, mayor, and staff have fiduciary responsibility to act prudently to manage the citizens’
money and property that has been entrusted to them. Therefore, we annually adopt and follow our Public
Funds Investment Act Policy as required by law. Additionally, we do not use non-recurring revenue to
pay recurring expenses. Examples of non-recurring revenue include grants, gas well royalty payments,
donations, and reserve funds retained from prior years.

Revenue Projections
1. Based on conservative periodic annual sales tax increase of 1%, as the commercial district only
has a few undeveloped commercial lots and in 2024 there were no new commercial construction
projects. Permits were issues to Communities in School, a non-profit that will not add to the sales
or ad valorem taxes. Braum’s has begun the application process, and is expected to open by
early FY2026, but no significant increase has been projected due to recently declining sales tax
revenue.
2. Ad valorem taxes are also conservatively budgeted due to changes that have been made by the
state legislature and the changes in valuation practices by the Tarrant Area Appraisal District.
Several large residential areas remain to be developed; all are privately owned. Over the last
two years developers have approached the city regarding the Trinity Terrace lots (formerly Kite
Farm) and the Smallwood lot.
3. Franchise fees continue to decline, as contracts expire and are not renewed, and legislative
changes have reduced the amount utilities are required to pay in these fees.
4. Permit fees are dependent upon construction prices and market demands. At some point, the
city will be fully built out, at which time there will be minimal fees in this area. Another point to
be mindful of is state regulation of the allowable fees that can be charged to developers; these
amounts continue to be decreased.
5. Municipal court revenue is dependent on multiple factors. The state has taken a more lax
enforcement stance, allowing courts to seek compliance in areas that previously created fine
revenue.
6. Other revenue sources include transfers from other funds to cover administrative cost (HR,
building maintenance, storage, etc).

Expense Projections
1. Payroll is increased at a declining rate, from five percent for the first two years, four percent the
next two years, and three percent thereafter. This accounts for employee turnover and unknown
COLA requirements. Employees’ benefit cost are increased at a rate of two and a half percent
annually; TMRS is projected based on payroll rate projections, as are Medicare, Social Security,
etc.
2. Other expenses in each fund include known purchases to replace vehicles, routine maintenance,
contract buyouts, and information technology upgrades. The newly appointed Finance and
Long-Range Planning Commission will also be making recommendations for future capital
expenditures.
3. Water and sewer rates are increased by ten percent every other year, which should cover the
increased cost to purchase those services. In addition, trash services are increased four percent
periodically to account for contract terms.
4. While not indicated on the ten-year projection, we currently anticipate using approximately $8-9
million in cash reserves, plus a bond reissuance as our current bonds mature, to complete the
citywide drainage plan. This drainage plan timetable could advance if we are successful in
obtaining state and/or federal grants for the project.

This is only the second year that we have included a 10-year projection, and we anticipate it will
continue to develop and improve over time.

www.cityofwestworth.com