Page 9 - WestworthVillageFY26AdoptedBudget

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. These projections are based on conservative periodic annual sales tax increase of 1%, as the
commercial district only has a few undeveloped commercial lots and in 2025, there was one new
commercial construction project. Permits were issued to Braum’s and it 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 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 Canary Property lots, but no new developments have been approved.
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 rate of three percent annually. 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 Finance and Long-Range Planning
Committee makes recommendations for future capital expenditure.
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
annually 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 third year that we have included a 10-year projection, and we anticipate it will
continue to develop and improve over time. Citizen input is always appreciated and welcome!

www.cityofwestworth.com