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HomeMy WebLinkAboutAgenda 09-07-06 City Council A G E N D A #2619 CITY COUNCIL MEETING CITY OF UNIVERSITY PARK, TEXAS CITY HALL COUNCIL CHAMBERS THURSDAY, SEPTEMBER 7, 2006 AT 5:00 P.M. I. MAIN AGENDA A.PUBLIC HEARING: Proposed New Tax Rate - Austin II.ITEMS FROM THE FLOOR Anyone wishing to address an item not on the Agenda or having questions about items on the Consent Agenda should do so at this time. Questions and comments regarding Main Agenda items may be made when that item is addressed by the City Council. As authorized by Section 551.071(2) of the Texas Government Code, this meeting may be convened into Closed Executive Session for the purpose of seeking confidential legal advice from the City Attorney on any agenda items listed herein. AGENDA MEMO (09/07/2006 and 09/14/2006 AGENDAS) DATE: August 31, 2006 TO: Honorable Mayor and City Council FROM: Kent R. Austin, Director of Finance SUBJECT: Budget and tax rate public hearings at September 7 and 14 meetings BACKGROUND/DISCUSSION Texas statutes require that cities provide notice and hold public hearings before adopting an annual budget and property tax rate. Proposed FY2007 budget State law requires that a budget hearing be held no sooner than 15 days after the proposed budget is filed with the municipal clerk. Using August 1 as the filing date, a hearing August 22 meets this requirement. At that hearing, Council directed staff to make modifications to the budget. New hearings are now scheduled for the September 7 and 14. The proposed budget and tax rate are scheduled for adoption at the September 26 meeting. The proposed FY07 budget of $38.879 million is 8.85% larger than the adopted FY06 budget of $34.749 million. The proposed budget includes a tax rate decrease, no rate increases for water or sewer service, and $5.013 million in capital project funding. The Finance Advisory Committee met August 10 to review the proposed budget. The Property, Casuality, and Liability Insurance Advisory Committee met August 29, and Employee Benefits Advisory Committee met August 30. All three recommended adoption of the proposed budget. More detailed information about the budget is included in the attached August 31 memo from the City Manager and supporting line item detail. Proposed property tax rate The property tax is the General Fund’s primary source of revenue. The proposed FY07 rate, which includes the HPISD requests, is $0.29272, a 5.45% reduction from last year’s adopted rate of $0.30958. The certified taxable property base rose 11.36%. The proposed budget would collect $707,656 more in current property taxes than last year, a 5.3% increase. Thus it is correct 1 \\srvchfp\shared\FINANCE\BUDGET07\Property Tax\AGENDA MEMO Budget and Tax Rate Hearing 09-07-06.doc 09/06/06 10:57 AM to say that the City is both cutting the tax rate and raising taxes. Due to the intricacies of the official effective tax rate (ETR) calculation, the proposed $0.29272 rate that will raise 5.3% more tax revenue represents an effective tax increase of only 3.1%. The ETR is significant because it drives the notice and hearing requirements a city must meet per the Texas Truth-in-Taxation law. Cities proposing an effective tax increase greater than the prior year must hold two separate public hearings about the tax rate. The Dallas County Tax Assessor- Collector performs the effective tax rate calculation. Notice of the ETR and public hearings is occurring in the August 31 and September 7 editions of the Park Cities News. The ETR’s purpose is to identify the tax rate that produces the same revenue dollars this year as last year. Instead of using the new 2006 certified tax roll ($4.804 billion) as the base, the ETR calculation considers only those properties that were on the tax roll one year ago, after adjustment for changes in exemptions, values under protest, and court-ordered reductions. The resulting tax base number ($4.677 billion) is known as the “2006 Adjusted Taxable Value” and omits the $136 million added by new construction in University Park this year. This new construction makes up 28% of the $490 million increase in the certified taxable value. At the same time, the taxes levied one year ago are also adjusted for refunds and are known as the “Adjusted 2005 taxes with refunds.” Dividing this figure ($13.28 million) by the adjusted tax base ($4.677 billion) produces an effective tax rate of $0.28390/$100. Comparing the new proposed tax rate of $0.29272 against the ETR yields an effective tax increase of 3.1%. Impact of HPISD requests on property tax adoption Modifying the budget to include the two HPISD requests has changed the proposed tax rate, so that the City has begun the public hearing and notice process again, this time with the rate of $0.29272. The average single-family home in University Park would pay $129 more in taxes than last year, compared with $92 more than last year if the HPISD requests are excluded. The effective tax increase would rise from 1.34% to 3.1%. RECOMMENDATION The City Council should conduct two public hearings, on September 7 and 14, to fulfill the requirements of the Truth in Taxation law. Adoption of the budget and tax rate may still occur at the September 26 meeting. ATTACHMENT: ? City Manager’s revised budget memo of 8/31/2006 2 \\srvchfp\shared\FINANCE\BUDGET07\Property Tax\AGENDA MEMO Budget and Tax Rate Hearing 09-07-06.doc 09/06/06 10:57 AM AGENDA MEMO (09/07/06 and 09/14/06 AGENDAS) REVISED FROM 8/01/06 AND 8/22/06 DATE: August 31, 2006 TO: Honorable Mayor and Members of the City Council FROM: Bob Livingston SUBJECT: Presentation of the City Manager’s Proposed FY 2007 Budget INTRODUCTION This memo presents the City Manager’s proposed budget for Fiscal Year 2007 (FY07, or October 1, 2006 – September 30, 2007). The budget has been modified since its original transmittal on August 1. Highlights of the proposed $37.8 million budget include: th ? A reduction in the City’s property tax rate for the 12 consecutive year. The proposed tax rate of 29.272 cents is 5.45% lower than last year’s rate of 30.958 cents per $100 taxable value. ? Balanced General and Sanitation Funds. ? Continued investment in automation and effective use of technology. ? Three new full-time positions, a Sergeant (Police), a School Resource Officer (Police), and a Planning Assistant (Building). ? Over $5 million in pay-as-you-go capital project funding, up 3% from last year. The Utility Fund as presented forecasts an operating deficit that could be eliminated by increased water sales. Sufficient funds exist to cover this shortfall, and higher than projected water sales will eliminate it through additional revenue. We will need to evaluate the situation as the year progresses. The major factor in the Utility Fund’s viability is the potential reduced consumption from conservation efforts if a long term drought occurs. The table below provides a comparison of total expenditures for the City’s three budgeted funds – General, Utility, and Sanitation. Three other funds – Capital Projects, Equipment Services, and Self-Insurance – are not included in the formal budget, because their revenues come from line-items in the three budgeted funds. A summary page showing the proposed budget by fund and department is attached, as is a worksheet detailing the property tax impact of the proposed FY07 budget. 1 \\srvchfp\UPPublic\Finance\BUDGET07\CM Budget Letter FY2007 v2.doc 09/06/06 10:59 AM Total Budgeted Expenditures FY2005 FY2006 FY2007 Dollar Percent Fund Adopted Budget Adopted Budget Proposed Budget Change Change General $21,067,545 $22,150,141 $24,187,449 $2,037,308 9.20% Utility 10,442,317 10,001,679 11,032,459 $1,030,780 10.31% Sanitation 2,663,410 2,649,308 2,659,860 $10,552 0.40% Total $34,173,272 $34,801,128 $37,879,768 $3,078,640 8.85% By comparison, over the past year, the Consumer Price Index - All Urban Consumers (CPI) for Dallas-Fort Worth increased 4.19% and the Municipal Price Index, which more closely tracks services and goods a municipality purchases, increased 4.13%. What accounts for the budget’s overall growth rate being twice these amounts? CITYWIDE ISSUES The major increases can be traced directly to six expenditure categories, which together account for over 93% of the increase in the FY07 budget. Some of these costs, such as electricity/gas and water/wastewater treatment are beyond the City’s direct control. The impact of these six categories is shown below: Expenditure category Increase over FY06 budget General Fund All Funds ? Personnel costs $1,370,500 $1,614,200 ? Water and wastewater treatment $ -0- $ 759,000 ? Fuel and equipment $ 95,600 $ 156,700 ? Capital projects contributions $ 77,000 $ 137,200 ? Automation $ 119,100 $ 117,800 ? Electricity and gas $ 80,000 $ 94,000 TOTALS $1,742,200 $2,878,900 Personnel costs Salaries and benefits make up 55% ($20.8 million) of the total budget, and they comprise 67% of the General Fund’s increase. The proposed FY07 budget includes three new full-time positions, a Planning Assistant in the Building Department, an additional Sergeant position in the Police Department, and a Police School Resource Officer. New positions Police Sergeant position – total annual cost $93,130 Chief Adams requested four additional positions, including three patrol personnel (a sergeant 2 \\srvchfp\UPPublic\Finance\BUDGET07\CM Budget Letter FY2007 v2.doc 09/06/06 10:59 AM and two patrol officers) and an upgrade of a clerical position from part to full-time. I have removed all but the additional sergeant’s position. This position will be assigned to patrol to replace a Lieutenant, who will be reassigned to administration overseeing a number of responsibilities previously handled by Lt. Burks. Currently we have 1,841 Direct Alarm customers, and as the number of these accounts continues to increase, Lt. Burks in turn must devote more time to them. This service is important to many of our residents as well as the City, and we do not want customer service to decrease. Police School Resource Officer position – total annual cost $79,820 The proposed FY07 budget now includes another Police position, a School Resource Officer (SRO), who would be assigned to Highland Park High School. The position was requested by HPISD and a group of parents; their request is included at the end of this memo. The Finance Advisory Committee considered this request at their August 10 meeting and recommended including it in the budget. At their August 22 meeting, the City Council directed staff to add the position to the FY07 budget. Planning Assistant position – total annual cost $58,580 The additional position in the Building and Zoning Division is intended to strengthen our ability to deal with increasingly complex planning issues. Increased building activity, both residential and commercial, has caused residents to express concerns to Council regarding lot coverage, building site control, parking and traffic, and various other items. Additionally, results of the recent community survey identified the Building Division as a target area for improvement. The new position will provide additional support to the City Council, Planning and Zoning Commission, Board of Adjustment, other City staff, and our citizens as we work to devise ways of addressing the community’s concerns in this area. If approved as proposed, the number of full-time employees will rise from 239 to 242. This number is still below the 247 employed in the early 1990’s. Salary changes Non-public safety positions The proposed budget includes market-based raises ranging from 3% to 7%, depending upon position. The Hay Group compensation study, which identifies salary levels for all employees except police and fire, recommends salary adjustments over the entire range by position. The study is a systematic review of pay in both private and government jobs of comparable complexity, skill, and education. I recommend that the increases be approved to keep our salaries competitive with other employers. Public safety positions The FY2007 budget also includes a 5% increase in fire and police salaries. This recommendation is based on comparisons with a group of North Texas cities that includes Addison, Garland, Dallas, Arlington, Plano, and Richardson. This increase serves to keep us competitive with other agencies. We continue to enjoy a very low employee turnover rate, which is in part an indicator that our salaries and benefits are competitive with other area cities and private employers. However, as the economy improves, we are having increased difficulty in filling positions with the caliber 3 \\srvchfp\UPPublic\Finance\BUDGET07\CM Budget Letter FY2007 v2.doc 09/06/06 10:59 AM of candidate we require. For this reason, we always need to keep salaries for all employees competitive. Benefit changes Employee health insurance Health insurance costs continue to challenge us. Paid claims for the period from July 2005 to June 2006 have actually decreased from the previous year, a first. For the first time in years, it also appears we stand a good chance of ending the year with a surplus of contributions over claims. However -- the volatility of costs for medical expenses and potential for higher claims lead us to budget an additional 14.25% ($250,800) citywide for health insurance. Further, at their August 30 meeting, the Employee Benefits Advisory Committee (EBAC) recommended increasing the budget for employee health insurance by an additional $150,000. Ninety- thousand dollars have been added to the proposed General Fund budget for this purpose. Additional funding may come from a revision to monthly employee premiums. When insurance renewal bids are reviewed later in the year, the EBAC will evaluate options regarding coverage and cost and make a recommendation to the Council at its November meeting. Retirement costs The employer contribution for the City’s retirement plan is static, actually decreasing from 14.88% to 14.87%. Because of the two new positions and recommended salary increases, however, retirement costs are projected to rise $142,200, or 7.03% more than in FY2006. No changes to the retirement plan’s benefits are included or proposed at this time. The employer contribution rate is set by TMRS (Texas Municipal Retirement System) and is driven by factors such as employee turnover and tenure. TMRS is structured like a defined contribution plan, wherein employee contributions, interest credits, and an employer match combine to produce an amount that is annuitized at retirement. As a result, TMRS is not experiencing the financial difficulties faced by many defined benefit pension funds, both public and private. Firefighter pension fund issue While it is not funded in this Budget, we expect to resolve in FY07 the under-funding of City’s Firefighter Relief and Retirement Fund (FRRF). University Park Fire Department personnel are the only City employees who are not members of TMRS. They belong to a separate system that is governed by a local board made up of three firefighters, two local residents, and two City staff members. The FRRF is structured as a defined benefit plan and is currently underfunded on an actuarial basis. City staff is working with our firefighters, the Finance Advisory Committee, and TMRS to evaluate the possibility of merging UPFD personnel into TMRS. The advantages include better benefits to the employees, improved plan administration, portability of member contributions, and most importantly, membership in a financially sound system. As of this writing, TMRS is preparing retirement benefit projections for merged employees, and City staff is preparing an information campaign to communicate the details of a merger. The ultimate decision will require a vote of all UPFD personnel and City Council action. Staff will prepare alternatives for City Council consideration once details are available. HPISD Proposal Finally, the City has received a request from the Highland Park Independent School District and a group of parents to fund a school resource officer at the High School. HPISD also 4 \\srvchfp\UPPublic\Finance\BUDGET07\CM Budget Letter FY2007 v2.doc 09/06/06 10:59 AM requested that the City assume maintenance of the track at Germany Park. Both of these requests are now included in the proposed FY07 budget and are discussed in more detail later in this memorandum. External treatment costs (water and wastewater) The City faces steep increases in FY2007 for water treatment (from the Dallas County/Park Cities Municipal Utilities District or MUD) and wastewater treatment (from the City of Dallas Water Utilities). Both providers are increasing their wholesale rates to the City. Water costs The MUD is raising its rate per 1,000 gallons by 8.5%, from $1.1125 to $1.2071. This is higher than their projection one year ago, largely because of a reduction in the estimated gallons of water to be sold (from 2.136 to 2.098 billion gallons, a drop of 1.8%). With lower volume, the treatment costs cannot be spread as widely as with higher sales. The result is a 6.6% budget increase, from $2.376 million to $2.533 million. Based on water purchases of 2.098 billion gallons, City water revenues are projected to fall slightly, from $5.245 million to $5.214 million. Wastewater costs Dallas Water Utilities is also increasing its treatment charges by 5%, from $1.7771 to $1.869 per 1,000 gallons. The resulting dollar increase is further magnified by a startling 33% leap in University Park’s winter quarter water consumption. Some relief is provided by the 4.9% decrease in the infiltration/inflow (I/I) factor Dallas uses. The winter quarter consumption and I/I factor form the base upon which Dallas sets its sewer rate. These changes combine to produce a $602,000 increase in budgeted wastewater treatment charges. The higher winter average water use has already boosted City retail wastewater revenues, which will increase sharply, from $3.76 million in FY06 to a projected $4.42 million in FY07. Fuel/equipment costs The continued rise in gasoline and other fuels is well known. Although the City has three underground tanks for gasoline and diesel, as well as a propane tank, even bulk purchases cannot offset the sharp increases. The proposed budget includes a 20.5% ($59,200) increase in fuel purchases, from $288,200 to $347,400 citywide. The City budgets for equipment replacement by purchasing vehicles in the Equipment Services Fund and then charging an annual contribution back to the operating departments. This levels the impact on the annual budget. For FY07, equipment replacement contributions will total $544,000, up only 2% from $542,00 in FY06. Finally, maintenance costs are budgeted to increase 8% ($67,900) to $916,300. This represents the cost of operating the City’s garage and warehouse. Capital project contributions The FY07 budget continues the City’s successful practice of funding its capital projects on a pay-as-you-go rather than debt basis. FY07 will likely see the largest expenditure for capital projects in the City’s history. While funds for these projects have been accumulated over a number of years, construction is expected to begin in FY ‘07. The impact on our Capital Projects Fund balance and other Fund Balances will be significant. Reduction of these balances will also lower the invested balances in these funds, potentially reducing future interest earnings. The projects slated to begin during FY07 include: Goar Park and City Hall Improvements $14,000,000 5 \\srvchfp\UPPublic\Finance\BUDGET07\CM Budget Letter FY2007 v2.doc 09/06/06 10:59 AM (An additional $3.5 million is already under contract for Turtle Creek improvements) Northwest Parkway Wall (Airline to Turtle Creek Blvd.) 3,000,000 Germany Park booster pump station 3,500,000 Mile-per-year project 2,000,000 Overlay, alley, and curb & gutter Improvements 1,500,000 TOTAL $24,000,000 These outlays will be made from the City’s Capital Projects Fund and will not directly impact the FY07 budget. However, in continuing our pay-as-you-go approach, the FY07 budget includes over $5 million in planned capital project contributions from both the General Fund and Utility Fund. The $2.952 million from the General Fund and $2.069 from the Utility Fund represent a 3% increase over the prior year. The City includes these contributions in a department titled “Transfers.” Details are listed below. Contribution Description FY06 FY07 General govtl. projects (General Fund) $1,031,323 $1,053,063 Curb and gutter replacement (General Fund) 921,331 948,971 Asphalt overlay program (General Fund) 582,351 599,821 Mile-per-year (water/sewer/alley) replacement 331,957 341,916 (General Fund) Mile-per-year (water/sewer/alley) replacement 1,848,149 1,903,593 (Utility Fund) Fire hydrant installation (Utility Fund) 160,967 165,796 Total $4,876,078 $5,013,260 The first item, general governmental projects, will be used in FY07 to help fund the Northwest Parkway Wall Project. In addition to these budgeted operating contributions, the City sometimes transfers additional funds to the Capital Projects Fund each year. These transfers are made from unreserved fund balances in the General and Utility Funds by Council ordinance. Automation As noted in last year’s budget message, the downstream costs of automation are becoming more evident. Technology improvements have yielded many benefits for the City, including: a heavily used Web site; a successful Direct Alarm monitoring program; comprehensive electronic mapping; faster network and internet access; improved customer service via online billpay, service requests, and reservation abilities; enhanced police and fire response; and overall better quality of information for planning and decision-making. For every technology implementation, however, there is an ongoing operational element that must be funded. For FY07, technology related costs (programming and maintenance, software, and hardware) total $618,500, up 24% from last year’s $500,700. Of this total, police and fire technology requirements comprise nearly half, or $239,300, and public safety 6 \\srvchfp\UPPublic\Finance\BUDGET07\CM Budget Letter FY2007 v2.doc 09/06/06 10:59 AM projects represent over $93,000 of the $117,800 increase. Most of the technology expenditures citywide will occur in the General Fund -- $515,800 of $618,500 total. While these costs are considerable, they have become a cost of doing business as much as utilities or equipment. I commend our Information Services Department for the impressive work they do in supporting the City’s computer systems and users. The City enjoys a sound technology direction and is committed to properly maintaining the systems in place. Electricity and natural gas The FY07 budget includes an increase of nearly $100,000 citywide for energy costs, bringing the proposed total to $431,171. This 28% increase is the result of a comprehensive updating and projection of City energy costs. Actual costs for FY06 are expected to be over $400,000. Although the City is a member of the Cities Aggregation Power Project (CAPP), which purchases power on a large scale to get the best price, no relief is expected for electricity prices any time soon. Many electric plants rely on natural gas as fuel, so that rising natural gas prices have a double impact on consumers, including the City. On a positive note, the higher energy costs also translate into increased franchise fees for the City. 7 \\srvchfp\UPPublic\Finance\BUDGET07\CM Budget Letter FY2007 v2.doc 09/06/06 10:59 AM DISCUSSION OF BUDGETED FUNDS, TAXES, AND SPECIAL REQUESTS GENERAL FUND Revenue considerations This year’s proposed budget includes major adjustments to the City’s key non-property tax revenue projections. The projected sales tax amount, $3.1 million, is a 24% increase over FY06’s $2.5 million. The projection is based on actual monthly sales tax revenues following the reallocation project undertaken in 2005. Interest revenues are also projected to rise, from $450,000 to $600,000 in FY07. Short-term interest rates have now risen above 5.2% compared to about 3% one year ago. Building permit revenues are expected to continue at their current levels, which already greatly exceed the budgeted amount. Overall, non-property tax General Fund revenues are projected to grow by 15%. Tax rate decrease The City’s total certified taxable value rose by 11.36% compared to last year. The FY07 budget proposes to reduce the tax rate from $0.30958 to $0.29272 per $100 taxable value, a rate reduction of 5.45%. While the City is now debt-free and has no debt service portion of its property tax rate, it is helpful to think of Operations and Maintenance (O&M) as having an operations piece and a capital piece. The table below compares this year with the past three: Property tax rate comparison, FY04 – FY07 Adopted Adopted Adopted Proposed Tax purpose FY04 FY05 FY06 FY07 Operations $0.25488 $0.25427 $0.24312 $0.23126 Capital 0.07113 0.07112 0.06645 0.06146 Total O&M 0.32601 0.32539 0.30958 0.29272 Debt Service 0.00000 0.00000 0.00000 0.00000 Total Tax Rate $0.32601 $0.32539 $0.30958 $0.29272 For FY07, the market value of the average single-family home in University Park is $918,583, a The proposed tax rate results in a 5.3% 12.5% increase from last year’s $816,423. increase in the tax levy itself. The owner of an average home with a homestead exemption whose value did not increase in assessed value this year would pay $143 less in City taxes compared to FY06. As shown below, the owner of a home whose value increased by the citywide average would pay $129 more in City property taxes – less than $11 a month. Property tax levy comparison, FY04 – FY07 Adopted Adopted Adopted Proposed FY04 FY05 FY06 FY07 Assessed Value (Market) $717,626 $737,035 $816,423 $918,583 Less 20% Hmstd Exmp (143,525) (147,407) (163,285) (183,717) Taxable Value $574,101 $589,628 $653,138 $734,866 Tax Rate per $100 $0.32601 $0.32539 $0.30958 $0.29272 City Tax Levy $1,871.65 $1,918.59 $2,021.96 $2,151.12 8 \\srvchfp\UPPublic\Finance\BUDGET07\CM Budget Letter FY2007 v2.doc 09/06/06 10:59 AM Over the period FY04 to FY07, while the average single-family home in University Park increased 28% in market value, the City tax levy increased 15%. Of the three taxing jurisdictions within the city’s boundaries – the City, Dallas County, and HPISD -- the City portion comprises only 14% of a resident’s total tax bill. UTILITY FUND The proposed Utility Fund budget includes no rate increases for water, wastewater, or storm water charges. As noted earlier, however, both of the City’s external treatment providers are boosting their rates, resulting in a projected increase of over $750,000. The proposed Utility Fund budget is out of balance, with expenditures exceeding projected revenues by $362,000 (3% of the Fund’s $11 million expenditure budget). Because utility revenues and expenditures are so heavily volume dependent, and because these volumes may change dramatically from year to year, at this time I do not propose to increase water or sewer rates. Should water sales exceed the projected 2.098 billion gallons, it is likely the increased revenues will more than offset the current expected imbalance. Additionally, unlike property taxes, utility rates can be changed during the fiscal year. If actual conditions indicate a need for a rate hike, staff will return to the Council with detailed alternatives. SANITATION FUND Unlike the General and Utility Funds, Sanitation Fund revenues only increase if rates are raised or the number of serviced locations increases. In prior years, the Fund routinely expended less than its budget, which allowed it to finish the year with a positive balance. Last year, the proposed budget contained a 20% increase in sanitation rates. The Fund is expected to finish FY06 with a positive balance, and the budget for FY07 projects a break- even status. Consistent with past years, however, the Sanitation Budget contains a $100,000 placeholder (labeled “Disposal Fees Contingency” in the line-item budget), which is intended to allow accumulation of reserves toward future landfill needs. Further, Sanitation expenditures typically end the year several percent below budget, providing an additional margin for the Fund’s health. No new personnel are proposed, and landfill tipping fee estimates have been decreased based on actual expenditure history. REQUESTS FROM HIGHLAND PARK INDEPENDENT SCHOOL DISTRICT Included with the Proposed FY07 budget message are two attachments. ? Attachment “A” is a request from HPISD Superintendent Dr. Cathy Bryce that the City fund repair of the track surface at Germany Park. This request is being made as part of the renewal of an agreement between HPISD and the City. In past agreements HPISD has been responsible for maintenance of the track. According to Dr. Bryce, the cost is estimated to be $50,000 - $70,000 and needs to be done every 5 to 7 years. The Park Director is preparing a report to discuss costs and alternatives. ? Attachment “B” is a request from a group of parents and HPISD to fund a full-time 9 \\srvchfp\UPPublic\Finance\BUDGET07\CM Budget Letter FY2007 v2.doc 09/06/06 10:59 AM school resource officer at the High School. At this time, the approximately $80,000 annual cost for this position would be solely the responsibility of the City. A group of nd parents attended the August 22 public hearing on the budget to voice their support for the request. Both items are now included in the proposed budget. Their addition has boosted the tax increase needed, so that the original proposed tax rate of $0.28772 has been changed to $0.29272. The resulting impact on the average single-family home is $37. CONCLUSION The proposed budget has now been reviewed and recommended by the Employee Benefits, Finance, and Insurance Advisory Committees. Staff has scheduled the necessary public hearings and begun publishing the official notices, according to the State Truth in Taxation law. Staff proposes the following schedule for the FY2007 budget’s adoption: Date Day Description August 1 Tuesday Submit proposed budget to City Council; vote to hold public hearing re: proposed tax rate and budget August 10 Thursday Original public hearing notice appears in Park Cities News August 17 Thursday Second public hearing notice appears in News August 22 Tuesday Receive staff briefing on proposed budget Hold first public hearing re: proposed tax rate and budget; vote to hold new hearings with revised tax rate August 31 Thursday Revised public hearing notice appears in News September 7 Thursday Hold public hearing re: proposed tax rate September 7 Thursday Second public hearing notice appears in News September 14 Thursday Hold second public hearing September 21 Thursday Notice of vote to adopt tax rate appears in News September 26 Tuesday Approve ordinances adopting budget, tax rate, salary plan October 1 Sunday New budget takes effect Staff looks forward to meeting with the City Council and advisory committees to discuss the budget in more detail. We will be happy to provide any additional information that will be helpful during your consideration. 10 \\srvchfp\UPPublic\Finance\BUDGET07\CM Budget Letter FY2007 v2.doc 09/06/06 10:59 AM CITY OF UNIVERSITY PARK, TEXAS FY 2007 BUDGET SUMMARY BY FUND AND DEPARTMENT 08/31/2006 FY2005FY2006FY2007 ADOPTEDPROPOSEDDOLLARPERCENT ADOPTED BUDGETBUDGETBUDGETCHANGECHANGE GENERAL FUND 01-11 REVENUES 21,083,215 22,172,114 24,187,624 2,015,510 9.09% 9.09% TOTAL GENERAL FUND REVENUES$21,083,215 $22,172,114 $24,187,624$2,015,510 EXPENDITURES 01-02 EXECUTIVE 750,884 786,315 906,784 120,469 15.32% 6.26% 01-03 FINANCE 955,847 998,131 1,060,625 62,494 2.49% 01-04 HUMAN RESOURCES 329,554 334,340 342,661 8,321 7.87% 01-05 INFORMATION SERVICES 520,191 705,241 760,751 55,510 01-10 COURT 262,831 275,536 272,132 (3,404)-1.24% 13.45% 01-19 BUILDING 623,731 659,492 748,204 88,712 7.06% 01-20 ENGINEERING 884,966 842,530 901,974 59,444 6.50% 01-25 TRAFFIC 778,387 797,368 849,197 51,829 01-35 FACILITY MAINTENANCE 613,693 638,929 695,567 56,638 8.86% 10.41% 01-40 FIRE 3,837,102 4,041,469 4,462,340 420,871 13.30% 01-50 POLICE 4,854,780 5,057,785 5,730,453 672,668 12.95% 01-70 PARKS 2,102,110 2,254,602 2,546,522 291,920 01-75 SWIMMING POOL 147,969 164,968 173,946 8,978 5.44% 3.82% 01-80 STREETS 1,612,334 1,726,473 1,792,422 65,949 2.68% 01-85 TRANSFERS 2,793,166 2,866,962 2,943,871 76,909 9.20% TOTAL GENERAL FUND EXPENDS.$21,067,545 $22,150,141 24,187,449 2,037,308 DIFFERENCE$15,670 $21,973 $175 (21,798)   UTILITY FUND 10,670,195 6.57% 02-11 REVENUES 10,222,831 10,012,388 657,807 6.57% TOTAL UTILITY FUND REVENUES$10,222,831 $10,012,388 10,670,195 657,807 EXPENDITURES 5,987,12816.12% 02-21 UTILITY OFFICE 5,760,061 5,155,859 831,269 4.91% 02-22 UTILITIES 2,731,658 2,836,704 2,975,942 139,238 02-85 TRANSFERS 1,950,598 2,009,116 2,069,389 60,273 3.00% 10.31% TOTAL UTILITY FUND EXPENDS.$10,442,317 $10,001,679 11,032,459 1,030,780 DIFFERENCE($219,486)$10,709 ($362,264) (372,973) SANITATION FUND 04-11 REVENUES 2,231,450 2,658,540 2,660,500 1,960 0.07% TOTAL SANITATION FUND REVENUES$2,231,450$2,658,540$2,660,5000.07% 1,960 EXPENDITURES 04-60 SANITATION 2,663,410 2,649,308 2,659,860 10,552 0.40% TOTAL SANITATION FUND EXPENDS.$2,663,410$2,649,308 2,659,8600.40% 10,552 DIFFERENCE($431,960)$9,232$640 (8,592) 7.68% TOTAL REVENUES$33,537,496 $34,843,042 $37,518,319 2,675,277 TOTAL EXPENDITURES$34,173,272 $34,801,128 $37,879,768 3,078,640 8.85% DIFFERENCE($635,776)$41,914 ($361,449)($403,363) 11 \\srvchfp\UPPublic\Finance\BUDGET07\CM Budget Letter FY2007 v2.doc 09/06/06 10:59 AM CITY OF UNIVERSITY PARK, TEXAS FY2007 PROPOSED BUDGET PROPERTY TAX IMPACT 08/31/2006 FY2005FY2006FY2007 ADOPTEDADOPTEDPROPOSEDDOLLARPERCENT BUDGETBUDGETBUDGETCHANGECHANGE TOTAL TAXABLE VALUE (CERTIFIED) 3,927,730,289 4,314,149,841 4,804,267,737$ 490,117,896 11.36% TOTAL GENERAL FUND REVENUES$ 21,083,215$ 22,172,114$ 24,187,624$ 2,015,510 9.09% NON PROPERTY TAX REVENUE Sales tax$ 2,210,220$ 2,500,000$ 3,100,000$ 600,000 24.00% Franchise fees 2,060,000 2,060,000 2,185,000$ 125,000 6.07% Building permits 1,100,000 1,130,000 1,300,000$ 170,000 15.04% Traffic/parking fines 360,000 360,000 360,000$ - 0.00% Service charges 414,160 414,160 474,160$ 60,000 14.49% Direct alarm monitoring fees 450,000 514,000 540,000$ 26,000 5.06% Interest income 350,000 450,000 600,000$ 150,000 33.33% Utility Fund contribution 550,000 550,000 550,000$ - 0.00% Miscellaneous 596,906 626,906 781,760$ 154,854 24.70% TOTAL NON PROPERTY TAX REV.$ 8,091,286$ 8,605,066$ 9,890,920$ 1,285,854 14.94% PROPERTY TAX REVENUE Operations & Maintenance (O&M) need$ 12,780,429$ 13,355,548$ 14,063,204$ 707,656 5.30% Penalty/interest & attorney's fees 120,000 120,000 135,000$ 15,000 12.50% Delinquent (prior years) taxes 91,500 91,500 98,500$ 7,000 7.65% TOTAL PROP TAX OP REQUEST$ 12,991,929$ 13,567,048$ 14,296,704$ 729,656 5.38% DEBT SERVICE REQUIREMENT$ -$ -$ -$ - 0.00% PROPERTY TAX RATE Operations & Maintenance (O&M)$ 0.32539$ 0.30958$ 0.29272$ (0.01685) -5.44% Debt Service - - -$ - 0.00% Total Property Tax Rate per $100$ 0.32539$ 0.30958$ 0.29272$ (0.01685) -5.44% IMPACT ON HOMEOWNER Average single-family market value$ 737,035$ 816,423$ 918,583$ 102,160 12.51% Less: 20% homestead exemption (147,407) (163,285) (183,717)$ (20,432) 12.51% Average single-family taxable value 589,628 653,138 734,866$ 81,728 12.51% Tax levy$ 1,919$ 2,022$ 2,151$ 129 6.39% 12 \\srvchfp\UPPublic\Finance\BUDGET07\CM Budget Letter FY2007 v2.doc 09/06/06 10:59 AM