Agenda

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City Council Regular Meeting

Meeting Date:

08/11/2020

BACKGROUND

Workshop on the Proposed FY 2020-21 Budget and highlights from the General Fund, W&S Fund, EMS Fund, Drainage Fund, SEDC, and Restricted Revenue Funds.

General Fund revenue will increase 5.7% over FY 2019-20 year end estimates not including the transfer in from reserves. The largest contributor to this increase will be from property and sales taxes. The property taxes for FY 2019-20 are estimated to increase 4.3% and sales taxes are estimated to increase 5%.

The sales tax growth trend follows the area development growth and the potential for new businesses.

Miscellaneous Income is expected to decrease 10.1% in FY 2020-21 from the year end estimates due to an anticipated lower yield on investments. The investment income closely follows the Federal Funds Rate which is near zero which will decrease the investment income in the proposed budget year.

The overall FY 2020-21 General Fund Operating Budget increased 5.7% from FY 2019-20 year end estimates. This increase includes $386,000 for new positions and personnel programs for Police, Fire, and Planning & Zoning. The new personnel assignments will be based on an independent firm’s staffing recommendations after review of the practices and service levels of the City.

Another notable item for the FY 2019-20 Budget is the implementation of the Classification & Compensation Study’s first year recommendation. This study by a 3^rd party reviews market wages and makes recommendations for compensation adjustments for City staff. The first year recommended adjustment was effective on July 4^th, 2020. The study also recommended annual Employment Cost Index (ECI) adjustments. The budget includes $211,000 for a 1% ECI for all employees effective October 1^st.

This budget also proposes $400,000 for a Comprehensive Land Use Plan and Unified Development Code update. These documents help the City plan for its continued growth.

The Facilities Maintenance Budget will also increase by $55,000 for annual maintenance to help address the regular building maintenance required for the City facilities.

The City will also pull $500,000 from its fund balance for additional capital projects. $200,000 for streets, $150,000 for parks and trails, $100,000 for drainage, and $50,000 for sidewalk improvements.

The annual budget is required to have a public hearing before adoption. Staff recommends holding that hearing on August 25, and September 1, and adopt the budget on second reading on September 8, 2020. This follows the regulations set by the state in the Local Government Code on budget adoption chapter 102.

GOAL

To review the budget and proposed changes.

COMMUNITY BENEFIT

The Proposed Budget is submitted to the City Council and is available on the website for the public to review.

SUMMARY OF RECOMMENDED ACTION

No action taken tonight. There will be a public hearing on the budget on August 25th and on September 1st prior to adoption.

FISCAL IMPACT

The budget is an operational increase of $972,075 or a 2.7% increase over the FY 2019-20 Adopted Budget.
Non Personnel Budgets decreased 4.5% due to fewer capital purchases and lower tax abatement payments.
Personnel Budgets increase 6.9% with the first Class & Comp Study recommendation implementation, the merit program, anticipated medical insurance changes, a Employment Cost Index adjustment, and the addition of 4 new positions.

RECOMMENDATION

No action tonight, staff will return with a public hearing on August 25 and September 1 and adoption ordinance on September 1 and September 8.

Attachments
FY 2020-21 Proposed Budget