Page 36 - FY 2026-2027 Adopted Budget Book

permits. The revenue projections presented in the forecast use a line-item summary of City revenue. These
projections are based on an analysis of at least 5 years of historical trends for each revenue line item, as well
as the effects of current economic conditions and projected economic activity.

Property taxes, the City’s largest revenue source, are based on the tax rate adopted annually by the City
Council as applied to the certified property rolls prepared by the Tarrant County Appraisal District. The rate is
composed of two parts; the first to support general City operations through the General Fund and the second
part to pay principal and interest on tax-supported bonds through the Debt Service Fund.

Property values are projected to increase an average of 3.5% in FY 2028, FY 2030, and FY 2032, and 3% in
FY 2029 and FY 2031. This fluctuation takes into account the Tarrant Appraisal District's residential reappraisal
schedule.

Sales tax projections have moderate increases built in over the next five years, with 3% estimated in FY2028,
and 2% for each year thereafter. This takes into account recent new businesses that have opened and
expanded the sales tax base . It also reflects the City's status of being almost fully built out and sales tax
potential being dependent on redevelopment and economic conditions.

The overall expenditures in the model are reflective of the increase in the municipal cost index on an annual
basis. The average municipal cost index is adjusted and applied to all expenditure line items to present
forecast results. The average forecast for all expense line items, excluding payroll-related expenditures, is to
increase 1.5% per year.

The model identifies a certain percentage of the expenditure categories that are dedicated to personnel and
factors annual compensation increases towards personnel costs in order to project what the total cost would
be over the next five years. The model includes a 3% cost of living adjustment for all eligible employees.

Overall, fund balance exceeds the City’s targeted levels of 20% every year of the forecast.

FY 2026-2027 Adopted Budget Book · September 15, 2026 32