Page 38 - CITY OF WATAUGA, TEXAS ANNUAL BUDGET PORTRAIT

Other Taxes - Include receipts from the operation of bingo halls in the City.

Utility Franchise Fees – Consists of a percentage of local gross receipts remitted to the
City for the use of the City’s right-of-way by privately owned utility companies (electric,
telephone, gas, waste/recycling collections, and cable) providing services to Watauga
citizens. This can be for utility lines or the use of our streets for their vehicles. Revenues
are based on the terms of a franchise agreement between the City and each company.
Most franchise revenue is based on a percentage of gross revenues from the utilities.

Projected revenues for these fees are generally based on population estimates. The
Texas Legislature passed Senate Bill 1152 which undercuts the collection by cities of
right-of-way rental fees from companies that provided both cable and telecom services.
Beginning January 1, 2020, these companies now pay the greater of the two charges
measured on a statewide basis, but not both and the City has seen a significant decline
in these revenues as a result. These fees currently total 4% of General Fund revenues.

Licenses and Permits – This includes construction permit fees, animal licenses,
electrical and plumbing licenses and other licenses and permits. Historically, this revenue
has fluctuated due to construction activity in the City; however, as the City is
approximately 97% built out, this revenue is not expected to increase substantially. The
new planned developments at Capp Smith Park will bring increased revenues in FY2025-
2026.

Projections are based on historical issuance of permits and the expectations of inspectors
and economic development staff for new permits and buildings. This revenue source is
estimated to bring in 5% of General Fund revenues for FY2025-26.

Intergovernmental Revenue – Intergovernmental revenue makes up 3% of General
Fund revenues and comes from payment-in-lieu-of-tax (PILOT) transfers from City-
owned utilities, based on a percentage of water, sewer, and storm drain revenues. These
are like right-of-way fees charged to private utilities and are projected based on utility
revenue forecasts.

Charges for Services – Charges for Services account for 7% of General Fund revenues
and include recreation fees, EMS charges, developer reimbursements, and other service
fees. Projections are based on historical usage and current rates. Increased participation
in new recreation programs and continued growth in ambulance collections—boosted by
a second unit added in FY2020-21—have driven recent revenue gains.

Fines and Forfeitures - Accounting for 3% of General Fund revenues, these include
municipal court fines for misdemeanors, code enforcement citations, and related court
fees. Library overdue fines were discontinued in FY2020-21.

Miscellaneous Revenue – This includes interest earned on the investment of General
Fund cash, proceeds from the sale of surplus City property, cell phone tower rent
revenues and other various revenues. Interest earnings are expected to decrease slightly
from FY2024-25 based on the assumption that the Fed will lower interest rates in the
upcoming year. These revenues comprise 4% of total revenues.

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