Fiscal Year 2022 Proposed Operating Budget by City of Forney

FISCAL YEAR 2022 OPERATING BUDGET

Amanda Lewis Mayor James Traylor Mayor Pro Tem Cecil Chambers Place 2 Robbie Powers Place 3

Sarah Salgado Place 4 Derald Cooper Place 5 Jason Roberson CHARLES DANIELS Interim City Manager JON THATCHER City Attorney DOROTHY BROOKS City Secretary

Place 6

CITY COUNCIL & STAFF NEIL CARDWELL Deputy City Manager DEBORAH WOODHAM Director of Finance CHARITY WILSON Assistant Finance Director TODD EUDY Acting Police Chief DEREK BRIGGS Fire Chief KARL ZOOK City Engineer PETER MORGAN Director of Community Development KYLE GROVES Director of Public Works KYLE ROUVALDT Director of Parks & Recreation LYNN SPENCER Director of Economic Development

Fiscal Year 2022 Proposed Budget

The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to the City of Forney, Texas, for the fiscal year beginning October 1, 2020. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as a financial plan, as an operations guide and as a communication device. This award is valid for a period of one year only. We believe our current budget continues to conform to program requirements, and we are submitting to GFOA to determine its eligibility for another award.

Fiscal Year 2022 Proposed Budget

City Council & Staff Budget Transmittal Letter City Organization Chart Full Time Equivalent Summary Summary of All Funds General Budget Information, Plan & Process

2 5 18 16 36 37

General Fund Analysis of Property Valuation and Tax Rate General Fund Statement General Fund Revenues General Fund Use of Funds

49 50 54 55 62

General Fund Operating Reserve Police Special Services Hotel Occupancy Tax Fund Capital Purchases Fund Roadway Impact Fund Municipal Court Building Security Fund Municipal Court Technology Fund Municipal Court Juvenile Case Manager Fund Special Events Fund Fox Hollow Maintenance PID

72 73 74 75 78 79 80 81 82 83

TABLE OF CONTENTS Utility Fund Utility Fund Statement Utility Fund Revenues Utility Fund Use of Funds

84 85 86 92

Utility Operating Reserve Water & Sewer Impact Funds Interceptor Fund

98 99 101

Debt Service General Debt Service Utility Debt Service

102 106 117

Capital Improvement Program General Capital Improvements Utility Capital Improvements Tax Increment Reinvestment Zone Fox Hollow PID

120 125 128 130 131

Economic Development Corporation

132

Fiscal Year 2022 Proposed Budget

August 15, 2021

Dear Mayor and City Council: In accordance with the City Charter and the laws of the State of Texas governing home rule cities, please accept this letter as the budget transmittal and executive summary for the Fiscal Year 2022 annual budget. The budget is structurally balanced, meaning that reserves have not been used to balance the operating budget. It provides for all available resources and expenditures for the City and acts as the general financial and operating plan for the City of Forney. INTRODUCTION As always, this budget was prepared with great diligence in allocating limited resources for the best benefit to the citizens of Forney. The City will finish FY 2021 with an unexpected surplus in funds. Even though many cities experienced a decrease in revenue due to business closures and decreased sales tax, Forney experienced unprecedented growth in both sales tax and building permits and associated fees. The property tax base in Forney has continued to grow at a rapid rate with a 82% increase in values in the last 5 years. The increased values and early redemption of debt have allowed for a decrease in the property tax rate of just over $0.12 in the same time period. This budget proposes a tax rate of $0.501069 and will raise an additional $825,000 or 14.5% in property tax revenue from FY 2021. Both sales tax and building permit revenue depend on the health of the economy. Therefore, this budget includes a conservative 7% increase in sales tax over the actual collections in FY 2021 and a modest increase of $250,000 or 33% in building permit revenue. Associated permit fees were also increased to account for the additional building. Forney’s continued growth and increased revenue will allow the funding of additional staff and supplies required to meet the needs of the citizens. Last year staff was asked to defer personnel requests, so this budget includes 36 new positions of which many were needed in the prior year. All departmental requests were fulfilled for staffing, equipment, and capital projects. The FY 2022 budget includes new pay plans for both the Police Department and Fire Department with significant increases for uniformed personnel. All civilian employees will receive a 3% cost of living adjustment and a possible 2% merit adjustment. The budget also includes funding for a city-wide compensation study to help determine if employees are Fiscal Year 2022 Proposed Budget

receiving market wages as well as funds to make any necessary adjustments at the completion of the study. The City of Forney charter specifies that no more than 7% of current expenditures may be kept in the undesignated general fund balance. In effect, this provision requires that excess funds at year end be obligated for one-time purchases or expenditures. The City is poised to complete FY 2021 with a surplus of $15,000,000 of which $13,000,000 will be allocated to capital improvement projects and $2,000,000 to capital equipment purchases. Forney is a member city of the North Texas Municipal Water District (NTMWD) and purchases water and wastewater services from NTMWD. There are no increases proposed by NTMWD to the price per 1,000 gallons of water purchased and a marginal increase proposed for wastewater services. Therefore, this budget does not include any increase in water or wastewater rates for Forney citizens. The City recently renewed the contract for solid waste disposal services for a five-year term. The contract includes a provision that there will be no rate increase to the City for a period of three years and thus does not necessitate an increase in rates for the citizens at this time. Although revenue is projected to increase due to the robust growth in Forney, the continuing COVID pandemic has had a lasting effect on the hotel industry. The Hotel Occupancy Tax (HOT) Fund is a special revenue fund that receives revenue through a 7% tax charged on all room rates by hotels or motels within the city limits. Typically, this fund is used for special events, but a transfer from the general fund will be made to cover events in FY 2022. The HOT fund will accumulate funds until it is at a level to cover events in the future. The Capital Purchases Fund will provide for General Fund capital purchases through the $2,000,000 transfer from unallocated fund balance. Staff requests for FY 2022 total just over $1,500,000, and the remainder of the transfer will be included in the fund balance for future purchases. Capital requests of $609,000 for equipment to be used by the utility crews will be funded through unallocated fund balance in the utility fund. The City of Forney Capital Improvement Program (CIP) is comprised of several funds. The General CIP fund accounts for projects such as facilities, parks, technology, and roads. The General Fund transfer of $13,000,000 will fund just over $4,800,000 requested by staff in this budget. The remainder will stay within the fund as unallocated fund balance to be used for future projects. The Utility CIP fund accounts for water and sewer infrastructure projects and will receive a transfer from the Utility Fund in the amount of $4,774,152. Staff has requested $7,779,000 in utility CIP projects and those projects will be funded through a combination of the transfer for FY 2022 as well as unallocated fund balance within the fund.

FINANCIAL INFORMATION & FUND SUMMARIES GENERAL FUND The General Fund is the City’s principle operating fund and is supported by taxes, fees, and other revenues that are not restricted to specific uses. This fund accounts for City functions such as police, fire, community development, parks, municipal court, and administration. Fiscal Year 2022 Proposed Budget

GENERAL FUND REVENUE Fiscal Year 2021 total General Fund revenue is expected to end the year 42% above the original budget. This is the result of increased permits and inspections as well as sales tax collections. History Tax Revenue Sales Revenue Court Fines Permits & Inspections Donations & Grants Parks & Recreation Interest & Penalty Miscellaneous Transfers In to General Fund General Fund Revenue

2020 Actual

18,985,255 197,433 3,510,990 306,407 47,477 3,117,026 458,903 1,533,300 28,156,791

Projected 2021 Budget

19,444,727 15,000 180,560 1,184,500 36,700 250,000 50,000 1,912,190 23,073,677

2021 Revised

21,802,100 15,000 182,560 7,114,000 1,634,717 92,290 67,200 74,424 1,913,390 32,895,681

Budget 2022 Budget

22,867,486 15,000 181,100 2,128,000 97,750 50,000 79,500 1,369,929 26,788,765

% Change

17.60% 0.00% 0.30% 79.65% 0.00% 166.35% -80.00% 59.00% -28.36% 16.10%

Total revenue for Fiscal Year 2022 is projected to be $26,788,765. This is an increase of 16.1% from the prior year’s budget. This increase is primarily due to increased property tax and sales tax revenues. Taxable Valuation & Tax Rate The total certified property valuations for Fiscal Year 2022 are $2,654,551,468. This is an increase of 20.29% or $447,768,539 in total valuation. Forty-two percent of this increase, $187,090,724, can be attributed to new construction. The remainder is an increase in existing property valuation, which indicates a thriving community.

M&O Debt Service Total

Fiscal Year 2021 0.378201 $7,587,887 0.160509 $3,220,300 0.538710 $10,808,187

Fiscal Year 2022 0.356015 $8,265,876 0.145054 $3,367,835 0.501069 $11,633,710

Variance -0.02219 $677,989 -0.01545 $147,525 -0.03764 $825,515

While valuations have increased by 82% since 2017, the total tax rate has decreased by $0.12. The increased valuations, along with sound debt management including early redemptions and refunding, has contributed to the decreased tax rate. A $0.501069 tax rate is proposed for Fiscal Year 2022. This represents a $0.03764 decrease from the prior year. While the debt service portion of the tax rate will be decreasing, the maintenance and operations portion will be increasing slightly. Additional revenue will be generated from Fiscal Year 2022 Proposed Budget

new construction as well as increased valuations and will be used for increased operating cost. Further information on the changes in the tax rate, including adjustments for tax abatements and tax increment financing districts, can be found in the General Fund section of this document. Sales & Property Reduction Taxes Over the past five years, sales tax revenues have increased an average of 12% per year. This continued increase is indicative of a growing local economy, resulting from continued population growth within the city limits and the surrounding areas, as well as increased commercial development. The Fiscal Year 2021 budget assumed no increase in sales tax revenue, and actual collections are trending toward an increase of 22% over the prior year. The 2021 budget was prepared cautiously with the expectation that COVID would decrease revenue and expenses would need to be lowered in order to offset the revenue loss. This has not proven to be the case and as citizens stayed closer to home and worked remotely, our sales tax reciepts have increased. The Fiscal Year 2022 budget remains conservative and projects a 7% increase over 2021 yearend projections. Permits & Inspections This revenue category as a whole is expected to end the year at approximately 500% above the original budget. While nearly all of the individual permit fee categories will end Fiscal Year 2021 with increases, the largest increases will be reflected in Zoning & Platting Fees, Engineering Consulting Fees and Building Permits. A Fire Marshal Plan Review fee was added during Fiscal Year 2021 and has collected over $2 million to date. This fee is based on 1% of project valuation, and it has been brought to the attention of the Fire department and Community Development that the way this fee is charged in not in-line with fees charged by other local communities. The fee is being evaluated and is budgeted to reduce in the upcoming year. Other Revenue Sources Fire Protection fees are charged to the Kaufman County Emergency Services District #6 (ESD #6) and the Town of Talty. Nearly 40% of the Forney Fire Department calls are outside the City limits and in ESD #6. Therefore, ESD #6 will continue to contribute their entire assessment of $0.03 to the City for Fiscal Year 2022. This revenue item is budgeted at a 17% increase based on certified tax valuations. Fiscal Year 2022 Proposed Budget

While Park revenue is not significant in terms of amount, these revenues are increasing as fees are being evaluated, existing programs are being expanded, and new programs are being added. The City Council has requested that these revenues and some of the parks programs expenses be tracked in a more detailed manner. Therefore, a new revenue category has been added for Parks & Recreation. GENERAL FUND EXPENSES The Fiscal Year 2022 Budget includes an increase in expenditures of 16.81%. This increase is primarily the result of 25 new full-time equivalents that will be added in the fund. Each new employee will not only increase Salary & Benefit costs, but various other expenses will increase as new employees are outfitted and equipped. CATEGORY Salary & Benefits Services & Supplies Maintenance & Repair Information Technology Parks & Recreation Miscellaneous General Fund Expenses

History 2020 Actual 13,335,338 3,035,342 1,336,238 577,953 681,143 18,966,014

Projected 2021 Budget 2021 Revised 15,258,819 14,637,278 3,599,789 3,737,002 2,249,382 2,338,442 626,709 784,739 518,500 316,055 22,253,199 21,813,516

Budget 2022 Budget % Change 18,747,455 22.86% 3,583,246 -0.46% 2,348,864 4.42% 1,049,296 67.43% 30,000 236,000 -54.48% 25,994,861 16.81%

Employee Compensation Personnel costs account for 72% of the General Fund’s expenses. The Fiscal Year 2022 budget includes new step plans and increases for existing Police and Fire. This budget also includes a 3% cost of living adjustment and up to 2% merit increases for all other employees. Funds have been added in the Human Resources department for a compensation study to evaluate current pay plans for all employees. Funding has also been set aside to begin addressing any positions that may be determined to be below market. Health Insurance Premiums The budget includes a 12% increase in health care costs. The industry average for health care cost increases is between 12% and 15%. The City competitively bids our employee health insurance in October. Texas Municipal Retirement System The Texas Municipal Retirement System contribution rate for 2022 will increase to 14.32% from 14.26% in January of 2022. With the longer tenure of employees, increased salaries, and a significant number of new employees, the City’s General Fund contribution to TMRS will increase by $471,023 to $1,971,628 for the upcoming fiscal year. New Positions The Fiscal Year 2022 budget includes funding for 36 new positions. Twenty-five are funded in the General Fund. Details on the new positions can be found in the Full Time Equivalent section on the following pages. Fiscal Year 2022 Proposed Budget

Contingency & Reserves A $200,000 line-item contingency is included to offset unexpected costs. There will not be a transfer to the emergency reserve fund in Fiscal Year 2022 as the fund balance would adequately cover more that 25% of general fund expenditures. CAPITAL PURCHASES FUND The Capital Purchases Fund is used to make one-time purchases for General Fund Departments. It is primarily funded through a transfer from the General Fund of unrestricted fund balance. Segregating these purchases in this manner helps to ensure that fund balance is not used for recurring operating expenses and assists in the tracking of fixed assets. The following items are proposed for purchase in 2022: POLICE • LENCO Bearcat - $286,153 o This is an armored vehicle for SWAT use. • Two Replacement Patrol Vehicles - $180,000 FIRE • •

Replace Medic 2 Vehicle - $95,000 Replace Brush 1 Truck - $131,000

STREETS • Large Message Board - $17,000 • Small Message Board - $13,500 NEIGHBORHOOD SERVICES • Two Additional Trucks for New Employees - $90,000 INFORMATION TECHNOLOGY • Public Safety Radio Inventory -$195,000 The total transfer from the General Fund for Fiscal Year 2022 is proposed at $2,000,000. This transfer will cover all of the requested purchases, allow for $500,000 to be committed for the future purchase of a Fire Engine and leave nearly $450,000 in fund balance available for unforeseen or future needs. UTILITY FUND The Utility Fund is an enterprise fund that accounts for the water, sewer, and refuse services that are provided to the City’s residents. Revenues are derived from charges for water consumption, wastewater collection, and refuse services. UTILITY FUND REVENUE Fiscal Year 2021 total Utility Fund revenue is expected to end the year 13.2% above the original budget. The increase is attributable to residential and commercial growth as well as new and existing industrial and wholesale contracts. Fiscal Year 2022 Proposed Budget

Projected

History 2020 Actual

Sales Revenue Interest & Penalty Miscellaneous Transfers In Utility Revenue

18,504,931 157,441 12,066 18,674,438

2021 Budget

2021 Revised

19,075,733 169,500 6,500 19,251,733

21,603,873 185,600 6,500 21,795,973

Budget 2022 Budget

22,775,390 155,600 6,500 22,937,490

% Change

19.39% -8.20% 19.15%

Total Revenue for Fiscal Year 2022 is projected to be $22,937,490. This is an increase of 19.15%. Utility Rates The North Texas Municipal Water District will not be increasing water rates for Fiscal Year 2022. Therefore, City of Forney utility customers will not receive a rate increase. Total sewer treatment and transmission costs as applied to the Utility Fund will not be increasing. The sewer rates per 1,000 gallons charged to the city’s retail customers will not be increasing. The recently renewed garbage contract with Community Waste Disposal (CWD) includes a freeze on rate increases to the city for the next three years. Rates charged to the city’s customers will not be increased during that period. UTILITY EXPENSES Operating expenses in the Utility Fund are projected to increase 18.66% from $17,104,126 to $20,295,527. CATEGORY

Salary & Benefits Services & Supplies Maintenance & Repair Capital Outlay Miscellaneous Utility Expenses

History 2020 Actual

976,413 1,324,773 11,862,068 288,789 747,523 15,199,566

Projected 2021 Budget

1,360,820 1,344,607 14,348,699 50,000 17,104,126

2021 Revised

1,259,345 1,428,218 14,448,699 17,136,262

Budget 2022 Budget

2,857,749 1,529,629 15,249,149 609,000 50,000 20,295,527

% Change

110.00% 13.76% 6.28% 18.66%

A significant portion of the nearly 19% increase anticipated for Fiscal Year 2022 is related to increased cost of providing water and sewer services. The cost of purchasing water for Fiscal Year 2022 will increase by 12.5%. The NTMWD will not be increasing the rate per 1,000 gallons. However, the City has exceeded the 2021 contract minimum of 2,318,622,000 by 254,228,000 gallons. This will result in an annual adjustment of approximately $125,000 for Fiscal Year 2021. The new contract minimum of 2,572,850,000 gallons for 2022 will result in annual charges of $7,692,822. The cost of sewer services is split between the Utility Fund and the Interceptor Fund. Maintenance and operation of the interceptors is charged to the Utility Fund and the debt owed for construction of the Fiscal Year 2022 Proposed Budget

interceptor lines is charged to the Interceptor Fund. Total costs for sewer services to the city will be increasing by 8.5%. Sewer treatment and transmission costs as applied to the Utility Fund will be decreasing by 4.79%. Sewer PreTreatment Buffalo Creek Interceptor Forney Interceptor Regional Wastewater System Mustang Creek Interceptor

2021 Budget 29,563 455,112 518,060 4,288,141 300,843 5,591,719

2021 Revised 29,563 455,112 518,060 4,288,141 300,843 5,591,719

2022 Budget 41,854 125,994 562,200 4,245,527 348,376 5,323,951

Revised vs 2021 42% -72% 8% -0.99% 81% -4.79%

Also contributing to the increase in expenses is the transfer of all Public Works Division employees to the Public Works Administration department. This has been done to simplify processes for Public Works, Finance, and Human Resources, and is explained in further detail in the discussion on Full Time Equivalents. Employee Compensation Personnel costs account for 11% of the Utility Fund’s expenses. The Fiscal Year 2022 budget includes a 3% cost of living adjustment and up to 2% merit increases for all other employees. The Utility Fund will contribute a portion of the funding and implementation of the compensation study through the Utility Operating Transfer to the General Fund. Health Insurance Premiums The budget includes a 12% increase in health care costs. The industry average for health care cost increases is between 12% and 15%. The City competitively bids our employee health insurance in October. Texas Municipal Retirement System The Texas Municipal Retirement System contribution rate for 2022 will increase to 14.32% from 14.26% in January of 2022. With the longer tenure of employees, increased salaries, and a significant number of new employees, the City’s Utility Fund contribution to TMRS will increase by $171,654 to $293,740 for the upcoming fiscal year. New Positions The Fiscal Year 2022 budget includes funding for 36 new positions. Eleven are funded in the Utility Fund. Details on the new positions can be found in the Full Time Equivalent section on the following pages. Capital Purchases The 2022 Utility Fund budget includes $609,000 worth of capital purchases. • Truck for new Water crew • Hydraulic Breaker • Valve Exerciser • Skid Steer • Mini Excavator • Truck for new Sewer crew Fiscal Year 2022 Proposed Budget

• • •

Two Trailers Sewer Jet Machine Medium Dump Truck (Replacement)

Contingency & Reserves A $50,000 line-item contingency is included to offset unexpected costs. As with the General Fund Operating Reserve, there will not be a transfer to the reserve fund in Fiscal Year 2022 as the fund balance would adequately cover more that 25% of general fund expenditures.

CAPITAL IMPROVEMENT FUNDS The Capital Improvement Funds account for the design and construction of City facilities, roads and drainage, parks, and water and sewer systems. Unlike the operating budget, the capital improvement budgets do not conclude at the end of each fiscal year, as many CIP projects remain in progress over several years. Capital Improvement Projects are funded from a number of different sources. Based on the funding sources, projects are put into one of two different funds: the General Capital Improvement fund, or the Utility Capital Improvement Fund. The City is currently in a unique situation where the caution taken in the prior year’s budget combined with unexpected increases in revenue collections has led to large unrestricted fund balances being available in multiple funds. This budget proposes cash funding for all of the requested capital improvements in the 2022 budget and leaves excess fund balance to be used for possible cash funding of projects currently being considered by the Bond Committee. Current estimates put the CIP fund balance at around $10 million and the Utility CIP fund balance at around $4 million. The following projects have been proposed to be added to the Capital Improvement Program for 2022: Project Name

Pavement Condition Index Study

Project Type

Fund

100,000

16 – General 16 – General 16 – General 16 – General

Facilities

16 – General

Fund Balance

750,000

City Hall Annex & Remodel

Facilities

16 – General

Comprehensive Plan CMOM Study

Facilities Sewer

16 – General 06 – Utility

Community Park Field Resurfacing Motorola Radio Core Maintenance FJC Security Overhaul Fire Station 1 Remodel Fire Station 1 Covered Parking Future Land Acquisition for City Facilities

Fiscal Year 2022 Proposed Budget

16 - General

Technology

16 - General

Parks

16 - General

Technology Technology Facilities Facilities

Budget

Fund Balance Payment in lieu of Parkland Payment in lieu of Parkland GF Transfer Fund Balance Fund Balance Fund Balance

Community Park Security

Roadway

Funding Source

Fund Balance & GF Transfer Fund Balance Fund Balance

250,000 60,000 282,761 50,000 75,000 50,000

3,000,000 200,000 250,000

Sewer Extension from Kaufman to Bowie Highway 80 Water Line Replacement

Sewer

06 – Utility

Fund Balance

2,735,000

Water

06 – Utility

709,000

West Highway 80 18” Loop

Water

06 – Utility

Additional Funding for Clay Pipe Replacement (CIPP) Project 185

Fund Balance Fund Balance & UF Transfer

Sewer

06 - Utility

Total Active Projects

3,335,000

Fund Balance

750,000

12,596,761

DEBT SERVICE FUNDS The City issues debt to support capital improvements. This debt is either tax supported and accounted for in the Debt Service Fund, or it is utility revenue supported and accounted for in the Utility Debt Service Fund. The combined total debt payments for Fiscal Year 2022 will be $6,256,930. General Debt Service Fund Revenues required to pay the City’s outstanding tax supported debt are restricted to debt payments. Revenues in this fund are collected through the debt service portion of the property tax rate and from the TxDOT Pass Through Toll reimbursement. A committed fund balance is designated for early bond redemption. These funds are the accelerated portion of the reimbursement (amount above the guaranteed minimum annual payment) from TxDOT for the Pass Through Toll roadway projects. The City has retired an additional amount of the 2008 GO bonds annually according to the funds available. During Fiscal Year 2021, the City redeemed $2 million, bringing the total early redemption since Fiscal Year 2013 to $17,037,448. To date, this process has saved the City $8,575,962 in interest. The required general debt payments for Fiscal Year 2022 total $6,054,217. In calculating the debt service tax rate, this number is reduced by the Pass Through Toll guaranteed minimum annual payment of $2,009,570 and $676,813 of available fund balance for the 2014 CO issue and the 2017 Tax Notes. This results in the tax rate being based on payments of $3,367,835 and is a reduction of $0.1157 per $100 valuation. Series 2008 Series 2011 Series 2012 Series 2012 Series 2014 Series 2014 Series 2015 Series 2016 Series 2016 Series 2017 Series 2017 Series 2020

General Debt Service General Obligation - TXDOT Pass Through General Obligation Refunding General Obligation Refunding Certificates of Obligation Certificates of Obligation General Obligation Refunding (2005A) General Obligation Refunding (2007) General Obligation Refunding (2007) Certificates of Obligation (Redbud) Subordinate Lien Pass Through Refunding Tax Notes (Fire Equipment) General Obligation Refunding

Fiscal Year 2022 Proposed Budget

Prinicipal 195,000.00 50,000.00 235,000.00 220,000.00 1,590,000.00 105,000.00 1,830,000.00 300,000.00 395,000.00 4,920,000.00

Interest 149,312.50 38,887.50 4,680.00 15,700.00 118,412.50 18,900.00 329,475.00 50,050.00 54,281.26 262,200.00 23,400.00 68,918.25 1,134,217.01

Annual Payment Paid from Other 149,312.50 149,312.50 38,887.50 199,680.00 65,700.00 353,412.50 353,412.50 238,900.00 329,475.00 1,640,050.00 159,281.26 2,092,200.00 1,860,257.50 323,400.00 323,400.00 463,918.25 6,054,217.01 2,686,382.50

Tax Rate 0.001675 0.008600 0.002830 0.010290 0.014191 0.070638 0.006860 0.009990 0.019981 0.145054

The final debt service portion of the tax rate is $0.145054 and will generate $3,367,835 in revenue for bond payments. Of this total, $0.095 (65%) results from voter approved general obligation debt. Utility Debt Service Fund Revenues required to pay the City’s outstanding revenue supported debt are transferred from the Utility Fund, the Water Impact Fund and the Sewer Impact Fund. The exact amount required to cover the year’s bond payments is transferred in each year and the fund maintains a zero fund balance. The total required debt payment for the upcoming year is $298,775.

ECONOMIC DEVELOPMENT CORPORATION FUND The Economic Development (EDC) Fund is a special revenue fund that receives revenue from type 4B sales tax. Expenditures are restricted to activities that support and promote economic and community development. Economic Development Revenue Economic Development Corporation revenues are expected to finish Fiscal Year 2021 at a 38% increase above the original budget due to increased sales tax collections. History Tax Revenue Interest & Penalty Miscellaneous Economic Development

2020 Actual

2,520,493 10,508 192,552 2,723,553

Projected 2021 Budget

2,424,106 10,000 100,210 2,534,316

Budget

2021 Revised

3,034,588 680 463,594 3,498,862

2022 Budget

3,247,009 1,000 69,844 3,317,853

% Change

33.95% -90.00% -30.30% 30.92%

Fiscal Year 2022 revenues are expected to increase 30% from the previous year due to increasing sales tax revenue. Economic Development Corporation Expense Economic Development Corporation expenses have decreased 21% from the original budget in Fiscal Year 2021. This decrease is primarily the result of a vacancies in the Director and Coordinator positions for much of the year. The Fiscal Year 2022 budget has been left flat with the prior year. History Salary & Benefits Services & Supplies Maintenance & Repair Miscellaneous Economic Development

Fiscal Year 2022 Proposed Budget

2020 Actual

223,266 220,134 425,799 64,430 933,629

Projected 2021 Budget

314,480 272,062 396,000 25,000 1,007,542

2021 Revised

112,418 227,725 410,000 41,775 791,918

Budget 2022 Budget

290,950 298,750 396,000 25,000 1,010,700

% Change

-7.48% 9.81% 0.31%

CONCLUSION The Fiscal Year 2022 budget is a balanced budget and provides an operating basis for the next year. It provides for strategic planning and investment in our most valuable asset, our workforce. At the same time, we are maintaining the long-term fiscal viability of the community by promoting cost saving measures and supporting quality development. While the budget process is always a challenge, we have produced a budget that is both balanced and sufficient to meet the need of the upcoming fiscal year. On behalf of myself and the staff, I want to express my appreciation to the City Council for your diligent efforts throughout the year in providing guidance, direction and support for this budget. I feel this budget accurately represents the goals of the City which are designed to provide the highest quality of services to our citizens with the resources available. I also want to thank Charity Wilson, Assistant Finance Director, for her tireless efforts and professional dedication in assisting me to ensure the financial integrity of the annual budget. Respectfully Submitted,

Deborah Woodham Director of Finance

Fiscal Year 2022 Proposed Budget

CITY ORGANIZATION CHART

Citizens of Forney

City Council

Municipal Judge

City Attorney

City Secretary

City Manager

Deputy City Manager

Finance

Information Technology

Public Works

Municipal Court

Streets

Utility Billing

Water

Sewer

Police

Fire

Parks & Recreation

Economic Development

Engineering

Community Development

Human Resources

Planning

Building Inspections Neighborhood Services

Facilities

Fleet

Fiscal Year 2022 Proposed Budget

FULL TIME EQUIVALENTS Department

2020

2021 Budget

2021 Revised

New Positions

Engineering

6.00

Legal Services

1.50

2.00

City Manager

3.00

4.50

City Secretary

1.00

Municipal Court

3.00

Finance

5.00

6.00

1.00

7.00

49.00

5.50

54.50

3.00

1.50

4.50

Fire

38.00

43.00

9.00

52.00

Parks and Recreation

11.00

12.00

15.00

1.00

16.00

Streets

6.00

Facilities Maintenance

2.00

2.50

Police Animal Control

Fleet

2.00

2022

1.00

2.00 5.50

Neighborhood Services

1.00

Building Inspections

6.00

7.00

Planning

3.00

Human Resources

2.00

3.00

Information Technology

5.00

2.00

7.00

145.50

147.50

151.50

25.00

176.50

Economic Development

3.00

EDC Full Time Equivalents

3.00

Utility Billing

6.00

Public Works Administration

2.00

27.00

11.00

38.00

Water

6.00

Sewer

6.00

20.00

33.00

11.00

44.00

168.50

170.50

187.50

36.00

223.50

General Fund Full Time Equivalents

Utility Fund Full Time Equivalents Total Full Time Equivalents

Fiscal Year 2022 Proposed Budget

2.00

8.00

3.00

STAFFING LEVELS INCREASED BY 17 DURING FISCAL YEAR 2021.

The impact to the total budget is approximately $1.4 Million in Salary & Benefits. FACILITIES MAINTENANCE In early Fiscal Year 2021, a Grounds Crew was established in an effort to eliminate the City’s many mowing contracts, as well as the mosquito spraying contract. Seven new positions were added: • Assistant Director of Operations (to manage Fleet and Facilities departments) • Grounds Crew Leader • Five Grounds Technicians While not entirely unsuccessful, the new program was determined to be insufficient during late Fiscal Year 2021. The new staff was reassigned: three full-time equivalents to the Parks department, and four full-time equivalents to Public Works. The positions continue with similar duties as initially assigned to the Grounds Crew and, while not fully independent of mowing contracts, the city has reduced its reliance on outside contractors for these services. The department was recently reclassified from the Operations Division to the Public Works Division and all full-time equivalents moved to the Public Works Administration department.

PARKS & RECREATION In addition to the three reclassified grounds positions, the Parks & Recreation department added a Recreation Assistant position that was originally budgeted as an additional Parks Maintenance Technician.

CITY MANAGER The City Manager’s office added 1.5 full-time equivalents. • A Deputy City Manager • A Social Media Intern FINANCE The Finance department added a Budget Analyst position. FIRE The Fire department added eight part-time Firefighter positions, for a total of four full-time equivalents. This was done to reduce overtime spending. BUILDING INSPECTIONS A Plans Examiner position was added to assist with the increased workload due to the unprecedented growth that Forney is experiencing. FLEET SERVICES A Fleet Services Coordinator was added to assist Operations staff in maintaining the City’s fleet. The department has since been moved from the Operations Division to Public Works. HUMAN RESOURCES The Human Resources department was removed from the Finance Division and a Director of Human Resources position was added. Fiscal Year 2022 Proposed Budget

STAFFING LEVELS ARE BUDGETED TO INCREASE BY 36 DURING FISCAL YEAR 2022. The impact to the total budget is approximately $2.8 Million in Salary & Benefits. ENGINEERING • Civil Engineer • Executive Assistant CITY MANAGER • Director of Communications FINANCE • Purchasing Manager POLICE • Lieutenant • Two Police Officers • Part-time Police Officer • Communications Officer • CID Administrative Assistant ANIMAL CONTROL • Animal Control Supervisor • Part-time Animal Shelter Attendant FIRE • • •

Three Fire Captains Three Driver Operators Three Firefighters

PARKS & RECREATION • Special Events Coordinator • Reclassify Supervisor to Assistant Director NEIGHBORHOOD SERVICES • Two Neighborhood Services Specialists INFORMATION TECHNOLOGY • Application Support Specialist • GIS Technician PUBLIC WORKS • Two PW Equipment Operators (Street) • PW Equipment Operator (Water) • PW Equipment Operator (Sewer) • PW Crew Leader (Water) • PW Crew Leader (Sewer) • PW Technician II (Water) • PW Technician I (Street) • PW Technician I (Water) • Facilities Maintenance Technician Fiscal Year 2022 Proposed Budget

GENERAL FUND FULL TIME EQUIVALENTS Engineering

2020

City Engineer Capital Projects Manager Senior Civil Engineer Civil Engineer Senior Construction Inspector Construction Inspector Executive Assistant

1.00 1.00 1.00 1.00 2.00 6.00

2021 New 2021 Budget Revised Positions 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 2.00 2.00 1.00 6.00 6.00 2.00

2022 1.00 1.00 1.00 1.00 1.00 2.00 1.00 8.00

The Engineering department was expanded from a contract service to a full department with the addition of the City Engineer in Fiscal Year 2019. A Senior Civil Engineer was added in 2020. The 2022 Budget will include a Civil Engineer and an Executive Assistant. City Engineer

Executive Assistant

Capital Projects Manager

Senior Construction Inspector

Senior Civil Engineer

Civil Engineer

Construction Inspector

Legal Services City Attorney Assistant City Attorney

2019 1.00 1.00

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 0.50 1.00 1.00 1.50 2.00 2.00 -

2020

2022 1.00 1.00 2.00

A part-time Municipal Court Prosecutor was added in Fiscal Year 2020 and became a full-time position in Fiscal Year 2021.

Fiscal Year 2022 Proposed Budget

2020

City Manager's Office City Manager Deputy City Manager Director of Communications Public Information Officer Social Media Specialist Social Media Intern Executive Assistant

1.00 1.00 1.00 3.00

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 1.00 1.00 1.00 0.50 1.00 1.00 3.00 4.50 1.00

2022 1.00 1.00 1.00 1.00 0.50 1.00 5.50

During Fiscal Year 2021, a Deputy City Manager position was added. The department also took on a Social Media Intern to assist the Social Media Specialist. The department will add a Director of Communications in Fiscal Year 2022. City Manager

Executive Assistant

Deputy City Manager

Director of Communications

Social Media Specialist

Social Media Intern

City Secretary's Office City Secretary

Fiscal Year 2022 Proposed Budget

2019 1.00 1.00

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 1.00 1.00 1.00 -

2020

2022 1.00 1.00

2020

Municipal Court Court Administrator Senior Deputy Court Clerk Deputy Court Clerk

1.00 1.00 1.00 3.00

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 1.00 1.00 1.00 3.00 3.00 -

2022 1.00 1.00 1.00 3.00

Municipal Judges are contracted by the City Council, and they are not employees of the City. Director of Finance Court Administrator Senior Deputy Court Clerk

Finance

2019

Director of Finance Assistant Director of Finance Finance Manager Purchasing Manager Budget Analyst Accountant Accounting Technician

Deputy Court Clerk

2020

1.00 1.00 1.00 1.00 1.00 5.00

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 5.00 6.00 1.00

2022 1.00 1.00 1.00 1.00 1.00 1.00 1.00 7.00

During Fiscal Year 2021, the Finance department added a Budget Analyst position. A Purchasing Manager will be added in Fiscal Year 2022. Director of Finance Assistant Director of Finance Purchasing Manager

Finance Manager

Budget Analyst

Accountant

Accounting Technician

Fiscal Year 2022 Proposed Budget

Police

2020

Police Chief Deputy Police Chief Police Lieutenant Corporal Police Sergeant Police Officer Communications Supervisor Sr Communications Officer Communications Officer Administrative Coordinator CID Administrative Assistant Records Technician Detention Officer

1.00 2.00 5.00 25.00 1.00 2.00 9.00 1.00 2.00 1.00 49.00

2021 2021 New Budget Revised Positions 1.00 1.00 2.00 2.00 1.00 4.00 5.00 5.00 25.00 21.00 2.50 1.00 1.00 2.00 2.00 9.00 9.00 1.00 1.00 1.00 1.00 2.00 2.00 1.00 1.00 49.00 49.00 5.50

2022 1.00 2.00 1.00 4.00 5.00 23.50 1.00 2.00 10.00 1.00 1.00 2.00 1.00 54.50

The Police department reclassified four Police Officer positions to Corporal positions in Fiscal Year 2021. The department will add a Lieutenant, two Police Officers, a part-time Police Officer, a Communications Officer, and a CID Administrative Assistant.

Police Chief

Deputy Police Chief

Communications Supervisor

Detention Officer

Deputy Police Chief

Police Lieutenant

Part-time Police Officer

Police Sergeant

Administrative Coordinator

Police Sergeant

Senior Communications Supervisor

Corporal

Communications Officer

Police Officer

Communications Officer

Police Officer

Communications Officer

Police Officer

Communications Officer

Police Officer

Communications Officer

Fiscal Year 2022 Proposed Budget

Records Technician

Sergeant

Administrative Assistant

Detective (Police Officer)

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 1.00 0.50 2.00 2.00 2.00 3.00 3.00 3.00 1.50

2020

Animal Control Animal Control Supervisor Animal Shelter Coordinator Animal Shelter Attendant Animal Control Officer

2022 1.00 1.00 0.50 2.00 4.50

The Animal Control department will add an Animal Control Supervisor and a part-time Shelter Attendant in Fiscal Year 2022. Deputy Police Chief

Animal Control Supervisor

Animal Shelter Coordinator

Part-Time Animal Shelter Attendant

Animal Control Officer

Fire

2019

Fire Chief Assistant Fire Chief Administrative Assistant Fire Marshal Fire Inspector Fire Captain Fire Lieutenant Fire Fighter Fire Fighter - Part Time (8) Driver Operator

1.00 1.00 1.00 1.00 1.00 6.00 21.00 6.00 38.00

2020 1.00 1.00 1.00 1.00 1.00 6.00 21.00 6.00 38.00

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 2.00 6.00 3.00 6.00 21.00 21.00 3.00 4.00 6.00 6.00 3.00 38.00 43.00 9.00

2022 1.00 1.00 1.00 1.00 2.00 9.00 24.00 4.00 9.00 52.00

The Fire department will add nine new positions – three Firefighters, three Driver Operators, and three Fire Captains. Fiscal Year 2022 Proposed Budget

Fire Chief

Administrative Assistant Assistant Fire Chief

Fire Marshal

Fire Captain

Fire Inspector

Driver Operator

Fire Inspector

Firefighter

Part-Time Firefighter (x2)

Firefighter

Part-Time Firefighter(x2)

Firefighter

Part-Time Firefighter (x2)

Firefighter

Part-Time Firefighter (x2)

Parks and Recreation Director of Parks and Recreation Assistant Director of Parks & Recreation Sports Coordinator Recreation Assistant Special Events Coordinator Parks Maintenance Supervisor Parks Crew Leader Parks Irrigation Specialist Parks Maintenance Technician

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 (1.00) 1.00 1.00 2.00 1.00 1.00 1.00 6.00 7.00 8.00 11.00 12.00 15.00 1.00

2020

2022 1.00 1.00 1.00 1.00 1.00 2.00 1.00 8.00 16.00

During Fiscal Year 2021, the Parks & Recreation department added a Recreation Assistant position as part of expansion of the City’s recreation program. The department also reclassified a Parks Maintenance Technician to a Crew Leader. The department received three new Parks Maintenance Technicians from the Facilities Maintenance department when the Grounds Crew program was disbanded. Fiscal Year 2022 Proposed Budget

For Fiscal Year 2022, the Parks Maintenance Supervisor position will be reclassified as an Assistant Director of Parks and Recreation. The department will also add a Special Events Coordinator.

Director of Parks & Recreation

Assistant Director of Parks & Recreation

Crew Leader

Sports Coordinator

Recreation Assistant

Special Events Coordinator

Crew Leader

Parks Maintenance Technician

Parks Maintenance Technician Parks Maintenance Technician Parks Maintenance Technician

Irrigation Specialist

Streets Streets Foreman Streets Crew Leader Streets Equipment Operator Streets Technician II Streets Technician I

2020 2.00 1.00 1.00 2.00 6.00

2021 2021 New Budget Revised Positions 1.00 2.00 2.00 1.00 6.00 -

2022 -

During Fiscal Year 2021, the Streets department full time equivalents were reclassified to the Public Works Administration department. This was done in an effort to simplify processes for Finance, Human Resources, and Public Works. Further explanation is included with the Public Works Administration department. Fiscal Year 2022 Proposed Budget

Facilities Maintenance Assistant Director of Operations Facilities Maintenance Coordinator Facilities Maintenance Technician Grounds Crew Leader Grounds Technician

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 1.50 2.00 2.50 -

2020

2022 -

In early Fiscal Year 2021, the City Council approved the development of a Grounds Crew to eliminate the City’s many mowing contracts and assist Parks and Public Works with maintaining medians, rightof-ways, and city owned properties, as well as mosquito spraying. Seven positions were added – Assistant Director of Operations, Grounds Crew Leader, and five Grounds Technicians. Later in the year, this program was eliminated and three of the Grounds Technician positions were reallocated to the Parks & Recreation department. The Facilities Maintenance department was moved from the Operations Division to the Public Works Division. The remaining four positions were reclassified as a Fleet & Facilities Manager, a Public Works Crew Leader, and two Public Works Technicians. Along with the Facilities Maintenance Coordinator and the Facilities Maintenance Technician, these positions have all be moved to the Public Works Administration department.

Fleet Services Fleet Services Coordinator

2020 -

2021 2021 New Budget Revised Positions -

2022 -

The Fleet Services department was established in Fiscal Year 2021 with the expectation the Operations division employees would perform the required duties. As the year progressed an opportunity developed to add a Fleet Services Coordinator position. This position was moved to Public Works Administration late in the year as part of the reorganization from Operations Division to the Public Works Division.

Neighborhood Services Neighborhood Services Specialist

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 2.00 1.00 1.00 1.00 2.00

2020

2022 3.00 3.00

The Neighborhood Services department has had only one full time equivalent for a number of years. In the past, code enforcement has been supported by Animal Control and the other two Community Development departments. For Fiscal Year 2022, two new Neighborhood Services Specialist positions will be added. Fiscal Year 2022 Proposed Budget

Director of Community Development Neighborhood Services Specialist

Neighborhood Services Specialist

Building Inspections

2020

Chief Building Official Building Inspector Plans Examiner Permit Technician

1.00 3.00 2.00 6.00

Neighborhood Services Specialist

2021 2021 New Budget Revised Positions 1.00 1.00 3.00 3.00 1.00 2.00 2.00 6.00 7.00 -

2022 1.00 3.00 1.00 2.00 7.00

The Building Inspections department added a Plans Examiner during Fiscal Year 2021.

Director of Community Development Chief Building Official

Fiscal Year 2022 Proposed Budget

Building Inspector

Plans Examiner

Permit Technician

2020

Planning

2021 2021 New Budget Revised Positions

1.00 1.00 1.00 3.00

Director of Community Development Senior Planner Planner Administrative Assistant

1.00 1.00 1.00 3.00

2022 1.00 1.00 1.00 3.00

The Director of Community Development no longer reports to the City Engineer. Director of Community Development Administrative Assistant

Senior Planner

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 1.00 1.00 1.00 1.00 2.00 2.00 3.00 -

Human Resources

2020

Director of Human Resources Human Resources Manager Human Resources Generalist

2022 1.00 1.00 1.00 3.00

The Human Resources department is no longer part of the Finance Division. A Director of Human Resources was added in Fiscal Year 2021.

Director of Human Resources Human Resources Manager

Fiscal Year 2022 Proposed Budget

Human Resources Generalist

Information Technology

2020

Director of Operations Assistant Director of Technology IT Systems Manager Application Support Specialist GIS Manager GIS Techician IT Analyst

1.00 1.00 1.00 1.00 1.00 5.00

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 2.00 5.00 5.00 2.00

2022 1.00 1.00 1.00 1.00 1.00 2.00 7.00

The Director of Operations position was reclassified as the Deputy City Manager in Fiscal Year 2021. The position was replaced with an additional IT Analyst.

Deputy City Manager

Assistant Director of Technology

IT Systems Manager

IT Analyst

GIS Manager

GIS Technician

IT Analyst

Application Support Specialist

The General Fund will add 25 new full-time equivalents in Fiscal Year 2022, for a total of 176.50. Not all of these positions are 100% funded by the General Fund. Any positions that split their time between work for multiple functions are adjusted via the annual operating transfers.

Fiscal Year 2022 Proposed Budget

UTILITY FUND FULL TIME EQUIVALENTS Public Works Administration Director of Public Works Assistant Public Works Director Public Works Foreman Facilities & Fleet Manager Public Works Crew Leader Public Works Environmental Technician Public Works Equipment Operator Public Works Technician I Public Works Technician II Facilities Maintenance Coordinator Facilities Maintenance Technician Fleet Coordinator Administrative Assistant

2021 New 2021 Budget Revised Positions 1.00 1.00 1.00 3.00 1.00 5.00 2.00 1.00 1.00 5.00 6.00 2.00 5.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 2.00 2.00 27.00 11.00

2020

2022 1.00 3.00 1.00 7.00 1.00 6.00 8.00 6.00 1.00 2.00 1.00 1.00 38.00

During Fiscal Year 2021, the Assistant Public Works Director position was reclassified as the Director of Public Works. All of the full-time equivalents in the Public Works Division were relocated to the Public Works Administration department. Relocating all of the Public Works employees to the Public Works Administration department will simplify processes for Human Resources, Finance, and Public Works. Due to the nature of the services provided by these departments, frequent turnover is not unusual. It is also not unusual for employees in one department to apply for positions in other departments within the division in order to advance in their careers or to vary their experience. The departments and individual positions also often overlap or provide assistance to departments outside of their originally assigned roles. Accounting for all of the Public Works positions will decrease the paperwork and processes required of HR and Finance and should eliminate most issues brought up as employees move between departments. Operating transfers will continue to include appropriate percentages for each position and will offset work done in the Utility Fund on behalf of General Fund activities. The Public Works Administration department will add eleven new positions in Fiscal Year 2022.

Water Water Foreman Water Operator Water Crew Leader Water Technician I Water Technician II Water Environmental Technician Water Equipment Operator Fiscal Year 2022 Proposed Budget

2020 1.00 1.00 1.00 1.00 1.00 1.00 6.00

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 1.00 1.00 1.00 6.00 -

2022 32

Sewer

2020

Sewer Foreman Sewer Crew Leader Sewer Technician I Sewer Technician II Sewer Equipment Operator

1.00 1.00 3.00 1.00 6.00

2021 2021 New Budget Revised Positions 1.00 1.00 3.00 1.00 6.00 -

2022 -

Director of Public Works

Administrative Assistant

Sewer Foremen

Crew Leader

Water Foreman

Crew Leader

Environmental Technician

Crew Leader

Fleet & Faciliteis Manager

Street Foreman

Crew Leader

Facilities Maintenance Coordinator

Fleet Coordinator

Crew Leader

Equipment Operator

Equuipment Operator

Equipment Operator

Facilities Maintenance Technician

Maintenance Technician I

Maintenance Technician II

Facilities Maintenance Technician

Maintenance Technician I

Fiscal Year 2022 Proposed Budget

2020

Utility Billing Utility Billing Manager Cashier Customer Service Representative Meter Technician Crew Leader Sr Meter Technician Meter Technician

1.00 1.00 1.00 1.00 2.00 6.00

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 1.00 2.00 1.00 1.00 2.00 2.00 6.00 6.00 -

2022 1.00 2.00 1.00 2.00 6.00

During Fiscal Year 2021 the Utility Billing Supervisor was reclassified to a Utility Billing Manager.

Assistant Finance Director

Utility Billing Manager Customer Service Representative

Customer Service Representative

Meter Technician Crew Leader Meter Technician

Meter Technician

The Utility Fund will add 11 new full-time equivalents in Fiscal Year 2022, for a total of 44. Not all of these positions are 100% funded by the Utility Fund. Any positions that split their time between work for multiple functions are adjusted via the annual operating transfers.

Fiscal Year 2022 Proposed Budget

ECONOMIC DEVELOPMENT FUND FULL TIME EQUIVALENTS

Director of Economic Development

2021 2021 New Budget Revised Positions 1.00 1.00 1.00 -

Economic Development Coordinator

1.00

Administrative Assistant

1.00 3.00

Economic Development

2020

2022 1.00

Director of Economic Development Administrative Assistant Economic Development Coordiantor

Fiscal Year 2022 Proposed Budget

SUMMARY OF ALL FUNDS Beginning Fund Balance

01 07 11 19 03 80 90 91 94

General Fund General Operating Reserve Police Special Services Capital Purchase Fund Debt Service Fund Roadway Impact Fund MC Building Security Fund MC Technology Fund Juvenile Case Manager Fund Total Governmental Funds

2022 Budgeted Revenue

2022 Budgeted Expenses

Transfers In

Transfers Out

Estimated Ending Balance

16,109,989 4,913,715 31,867 6,034 4,128,666 4,549,874 11,849 9,467 37,150 29,798,612

Governmental Funds 25,494,836 1,369,929 500 2,000,000 7,441,975 850,000 4,800 4,000 5,400 33,801,511 3,369,929

25,994,861 5,000 1,058,980 5,967,655 33,026,496

15,190,000 3,600 15,193,600

1,789,893 4,913,715 26,867 447,554 5,654,093 5,399,874 13,049 13,467 42,550 18,301,063

02 27 23 83 81 82

Utility Fund Utility Operating Reserve Utility Debt Sevice Interceptor Fund Water Impact Fund Sewer Impact Fund Total Utility Funds

5,454,032 3,758,572 1,451,339 1,094,907 5,173,959 16,932,808

Utility Funds 22,937,490 298,775 1,650,000 929,856 255,000 1,450,000 26,292,490 1,228,631

20,295,527 298,775 3,106,425 23,700,727

7,095,995 157,313 19,804 7,273,112

1,000,000 3,758,572 924,770 1,192,594 6,604,155 13,480,090

16 17 06

General CIP Fund TIRZ Fund Utility CIP Fund Total CIP

Capital Improvement Projects Funds 8,245,368 200,000 13,500,000 101,202 2,001,000 7,063,133 500 4,774,152 15,409,704 2,201,500 18,274,152

4,817,761 1,520,000 7,779,000 14,116,761

500,000 500,000

17,127,607 82,202 4,058,785 21,268,595

18 14

Economic Development Corporation EDC Capital Improvement Total EDC Funds

Hotel Occupancy Tax Fund

Special Events Fund

Economic Development Funds 9,006,625

3,317,853

1,192,978

96,000

11,035,500

9,006,625

3,317,853

1,192,978

96,000

11,035,500

125,000

Hotel Occupancy Tax Funds 50,000 75,000 234,510

190,000

314,650

109,860

Total HOT Funds

284,509.9

75,000.0

190,000

314,650

234,860

Total Revenues & Expenditures

71,432,258

65,688,354

23,062,712

72,351,612

23,062,712

64,320,108

Fiscal Year 2022 Proposed Budget

The city budget is a planning document for the use of financial resources during the fiscal year. The City of Forney is a complex organization, providing a wide range of services to its residents, customers, and visitors. City resources annually exceed $50 million. As with any large organization that provides a mixture of services, planning and management of financial resources are vital to the City. With increasing financial requirements of the School District, State and Federal governments on our citizens, it becomes even more important for the City to adequately plan and manage the use of its financial resources.

GENERAL BUDGET INFORMATION, PLAN, & PROCESS FUND ACCOUNTING In accordance with Generally Accepted Accounting Principles (GAAP), the accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. Government resources are allocated to and accounted for in individual funds based on the purpose for which they are to be spent and the means by which spending activities are controlled. A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance related legal and contractual provisions. It divides our reporting responsibility into several functional types as well as classifications. A brief explanation will facilitate your usage of this document. The minimum number of funds is maintained consistent with legal and managerial requirements. Governmental fund types are used to account for the city’s general government activities and include the General, Debt Service, Capital Project and Governmental Restricted Funds. Proprietary type funds are used to account for operations that provide services to other City departments or that are operated in a manner similar to private business and include both Enterprise and Internal Service Funds. Currently, there are no Internal Service Funds established and in operation. Additional information on Fund types is available in the Organization of Funds section.

BASIS OF ACCOUNTING

The basis of accounting is the method by which revenues and expenditures or expenses are recognized. The accounting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources Fiscal Year 2022 Proposed Budget

measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when they become susceptible to accrual (i.e. both measureable and available). Expenditures are recorded when the related fund liability is incurred, if measureable, except for un-matured interest on general long-term debt which is recognized when due, and compensated absences which are recognized when the obligations are payable from currently available financial resources. All proprietary fund types are accounted for on a flow of economic resources measurement focus and use the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when they are incurred.

BASIS OF BUDGETING

Annual budgets are adopted on a basis consistent with Generally Accepted Accounting Principles (GAAP) with the exception of Capital Projects Funds, which adopt project length budgets. Governmental type fund budgets are prepared on a modified accrual basis. Governmental revenues are budgeted when they are measurable and available and expenditures are budgeted in the period in which the liability is incurred. All proprietary fund types are budgeted using a flow of economic resources measurement focus and use the accrual basis of accounting. Revenues are budgeted when they are earned and measurable and expenses are budgeted in the period in which the liability was incurred. The City departs form GAAP in the treatment of depreciation and encumbrances. Depreciation of fixed assets is not recognized in proprietary fund budgets. All annual appropriations lapse at fiscal year end. Under the City’s budgetary process, outstanding encumbrances at year end are reported as reservations of fund balances since they do not constitute expenditures and liabilities and the commitments will be re-appropriated and honored in the subsequent fiscal year.

ACCOUNTING CODE STRUCTURE

Our Accounting Code Structure is designed to function with an 11-digit code, which is further divided into four sections. A Fund is a specific purpose classification, with a self-balancing set of accounts. A Department is an organizational or functional unit and may cross fund lines. Activity/Object denotes a distinguishable service performed by an organizational component, and is the final detail identification within the Account Number. Departments and divisions are not specified on the Revenue side; revenues are grouped by type instead of Activity and object is the final detail identification.

THE BUDGET PROCESS

The City of Forney’s Home Rule Charter provides for the submission of the budget to the City Council by the City Manager by August 1st. The City’s Fiscal Year runs from October 1 to September 30.

Fiscal Year 2022 Proposed Budget

January

February

March

April

May

June

July

August

•Budget Preparation Begins

•Department Directors begin developing budgets

•Directors meet with Finance for review •Budgets due to Finance

•Finance compiles information for City Manager review

•City Manager budget review meetings

•Council Budget Review Meetings

•Budget Preparations & Meetings Continue •Certified Values Received

•Proposed budget due to City Council •Effective and Rollback rates received from Kaufman County •Public Hearings on budget and tax rate •Notices Published

•Budget and Tax Levy voted dates set •Additional Public Hearings September •Adopt budget and tax rate

The following information provides a brief overview of the steps taken to prepare the City’s annual budget, including the budget calendar used by City Staff. Please keep in mind that this is a simplified version of a complex process that is a combined effort of members of each of the City’s departments and requires an extensive period of time to complete. Both revenues and expenditures are subject to change until the meeting when the City Council officially adopts the budget. Likewise, the budget calendar serves as an approximate timeline and the events may not always occur at the exact time indicated. Fiscal Year 2022 Proposed Budget

The annual budget is prepared under the direction of the City Manager. Each department director formulates a base budget for each of the departments included in their division. Base budgets include costs related to all existing personnel, services, and functions. Directors also prepare supplemental requests that provide a separate set of expenditures required to provide a new service, increase staffing levels, or purchase new equipment. Once base and supplemental requests are prepared, the directors submit their budgets to the Finance department. The Finance department compiles the information submitted, along with the revenue estimates, for review by the City Manager. Meetings are then held with the department directors to review and revise. The proposed budget document is prepared and then submitted to the City Council by August 1st. Shortly thereafter, a budget workshop is held for the Staff and City Council to review and discuss the proposed budget. Tax rate calculations and all of the related notice publications and public hearings, if necessary, occur throughout August and into September. A Public Hearing on the Budget is held in early September and revisions continue. The final budget is reviewed by the City Council and adopted in late September.

LEGAL LEVEL OF BUDGET CONTROL

The legal level for expenditure budget control is the Fund level. Each Department Director is responsible for the budget in their respective departments. The Directors are given latitude to transfer budget funds within their departments, with the exception of the personnel services category. Transfers affecting the personnel services category or outside of the department require the approval of the City Manager. Additions to the budget that are not countered by a reduction elsewhere require amendment of the budget by City Council. Article VII of the City's Charter governs the preparation and submission of the budget and the Schedules and Attachments in this budget meet or exceed its requirements. Formal budgetary integration is employed as a management control device during the year for the General Fund and Enterprise Funds. Formal budgetary integration is not employed for the Debt Service and Capital Projects Funds because effective budgetary control is alternatively achieved through bond indenture provisions and legally binding construction contracts, respectively.

AMENDMENT OF APPROVED BUDGET

The amendment of a departmental budget, which affects the total budget, requires approval by City Council. The City budgets a contingency amount in the operating funds. These contingency amounts are available to be used by the City Manager for any emergency, unforeseen expense or opportunity that might arise.

FUND BALANCE & RESERVE POLICIES

In accordance with the requirements of Governmental Accounting Standards Board (GASB), the City describes fund balance as: (1) Restricted; (2) Committed; (3) Assigned; and (4) Fiscal Year 2022 Proposed Budget

Unassigned. The Charter requires that we maintain under 7% of General Fund budgeted expenditures as fund balance. In addition, the City has reserved unassigned fund balance at 90 days of current year budgeted expenditures for both the General and Water/Sewer Funds. In other operating funds, the City shall strive to maintain a positive retained earnings position to provide sufficient reserves for emergencies and revenue shortfalls. Except for special revenue funds, Fund Balance shall be used only for emergencies, nonrecurring expenditures, or major capital purchases that cannot be accommodated through current year savings.

ORGANIZATION OF FUNDS

The City has the following Fund Types and Funds:

Governmental Fund Types

General Fund - Used to account for tax-supported or generic activity that is not specifically accounted for elsewhere. These are funds through which most governmental functions are typically financed. Hotel Occupancy Tax Fund - Used to account for the accumulation of resources from the Hotel Tax assessment levied by the City. These monies are to be spent to promote the development or progress of the City within the guidelines set forth on disposition of revenues collected under the authority of the Texas Hotel Occupancy Act (Article 1269; Vernon’s Civil Statutes). Economic Development Fund - Used to account for funds received from the Section 4B ½ cent sales tax dedicated to certain economic and infrastructure projects. Special Revenue Funds – Used to account for funds that are legally designated for specific purposes, and for those that have restrictions designated by City Council.

Proprietary Funds

Utility Fund - Used to account for activity surrounding the provision of water and wastewater service to the City residences. These funds derive revenues from fees charged for goods or services.

Capital Improvement Funds

General Capital Improvement Projects Fund - Used to account for major capital construction and/or acquisition projects that normally effect the general operation of the City. Utility Capital Improvement Fund - Used to account for major capital construction and/or acquisition projects that effect the utility operation of the City.

Debt Service Funds

General Debt Service Fund - Used to pay interest and extinguish debt of the outstanding General Obligation Issues of the City. Fiscal Year 2022 Proposed Budget

Utility Debt Service Fund - Used to pay interest and extinguish debt of the outstanding Revenue Bond Issues of the City.

Governmental Funds General Fund

Major Fund Non-Major Fund Budget

General Fund Reserve

Capital Purchases Fund

X X

Department Involvement General Administration City Council Special Events Engineering Legal Services City Manager City Secretary Municipal Court Utility Billing Finance Information Technology Police Animal Control Fire Parks and Recreation Neighborhood Services Streets Public Works Administration Water Sewer Building Inspections Planning Community Development Admin Human Resources Economic Development

X X X X X X X X X X X X X X X X

X X X X

Debt Service

X X X X X X X X X

Capital Hotel Special Events Police Special Improvement Occupancy Tax Fund Services Fund Fund Fund

X X

Roadway Impact Fund

Building Security Fund

Technology Fund

Child Safety Fund

Juvenile Case Manager Fund

X X

X X X X

X X X X X X X X

X X X X X

Economic Development Corporation

Utility Funds Water Sewer Fund

Major Fund Non-Major Fund Budget Department Involvement General Administration City Council Special Events Engineering Legal Services City Manager City Secretary Municipal Court Utility Billing Finance Information Technology Police Animal Control Fire Parks and Recreation Neighborhood Services Streets Public Works Administration Water Sewer Building Inspections Planning Community Development Admin Human Resources Economic Development

Fiscal Year 2022 Proposed Budget

Water Sewer Reserve Fund

Capital Improvement Fund

Debt Service

Interceptor Fund

X X

Economic Development Corporation Fund

Capital Improvement Fund

X X

Water Impact Sewer Impact Fund Fund

X X

X X X

X X

X X X

FINANCIAL POLICIES Broad policy decisions regarding long-range debt management for the City of Forney that have emerged and that will be followed are summarized below: o Borrowing must not overload future taxpayers to the point where they will not be able to pay. o Borrowing must be confined to capital improvements or projects which cannot be financed from current revenues. o Long-term debt should not provide for current operating expense. o Borrowing for each object or purpose should be related to a time period of probable usefulness of the project and should in no instance be repaid in a time greater than the period of probable usefulness of the project. ► The long-range policies of the City of Forney regarding financial management will be to exercise a discipline which allows us to retain a sound financial condition; strive to achieve the best possible rating on bonds; provide future generations with the ability to borrow capital for construction of facilities without severe financial burden; and give recognition to the community’s needs and ability to pay. These goals are accomplished in the following manner: o Prudent budgeting and effective budget control. Budget replacement of capital equipment as the need arises. (Office machines, automobiles, heavy equipment, etc.) o Pay-as-you-go financing of some capital improvements where feasible. o Scheduling bond issues so that an equal principal amount is retired each year over the life of the issue producing a total debt service schedule with a declining balance each year. o Providing an adequate reserve fund to meet requirements under bond covenants. o Planning for capital improvements on a five year plan which is updated annually. o Passing on the cost of extending utilities and improvements in subdivisions rather than burden the general public. o Provide working capital in all funds sufficient to meet current operating needs. o Financial accounting and reporting in accordance with the method prescribed by the National Committee on Government Accounting of the Municipal Finance Officers Association and making such reports available to bond rating agencies and other financially interested organizations. o Maintaining a fund balance sufficient to provide interim financing for necessary projects and meet unanticipated contingencies such as law suits, tax roll tie-ups, and severe seasonal fluctuation in sales of the city owned utilities.

Fiscal Year 2022 Proposed Budget

CITY OF FORNEY CHARTER The following are financial polices as established by the City of Forney Charter, Article VII

Section 7.01 Fiscal Year

The fiscal year of the City shall begin on the first day of October and end on the last day of September of the next succeeding year. Such fiscal year shall also constitute the budget and accounting year.

Section 7.02 Submission of Budget and Budget Message

On or before the fifteenth day of the eleventh month of the fiscal year, the City Manager shall submit to the Council a budget for ensuing fiscal year and an accompanying message.

Section 7.03 Budget Message

The City Manager’s message shall explain the budget both in fiscal terms and in terms of the work programs. It shall outline the proposed financial policies of the City for the ensuing fiscal year, describe the important features of the budget, indicate any major changes from the current year in financial policies, expenditures and revenues together with the reasons for such changes, summarize the City’s debt position and include such other material as the City Manager deems desirable.

Section 7.04 Budget a Public Record

The budget and all supporting schedules shall be filed with the City Secretary when submitted to the City Council, and shall be open to public inspection by anyone interested.

Section 7.05 Public Hearing on Budget

At the Council Meeting when the budget is submitted, the Council shall name the date and place of a public hearing and shall have published in the official newspaper of the City the time and place, which will be not less than ten days nor more than thirty days after the date of notice. At this hearing, interested citizens may express their opinions concerning items of expenditures, giving their reasons for wishing to increase or decrease any items of expenditure.

Section 7.06 Proceeding on Adoption of Budget

After public hearing, the council shall analyze the budget, making any additions or deletions which they feel appropriate, and shall, at least ten days prior to the beginning of the next fiscal year, adopt the budget by a favorable majority vote of the full membership of the Council. Should the City Council take no final action on or prior to such day, the current budget shall be in force on a month-to-month basis until a new budget is adopted.

Section 7.07 Budget, Appropriation and Amount to be Raised by Taxation

On final adoption, the budget shall be in effect for the budget year. Final adoption of the budget by the council shall constitute the official appropriation as proposed by expenditures for the current year and shall continue the basis of official levy of the property tax as the amount of tax to be assessed and collected for the corresponding tax year. Estimated Fiscal Year 2022 Proposed Budget

expenditures will in no case exceed proposed revenue plus cash on hand. Unused appropriation may be transferred to any item required for the same general purpose.

Section 7.08 Contingent Appropriation

Provision shall be made in the annual budget and in the appropriation ordinance for a contingent appropriation in an amount not more than seven percent of the total general fund expenditures, to be used in case of unforeseen items of expenditures. The contingent appropriation shall apply to current operating expenses and shall not include any reserve funds of the City. Such contingent appropriation shall be under the control of the City Manager and distributed by him only after prior approval by the City Council. The proceeds of the contingent appropriation shall be disbursed only by transfer to other departmental appropriation, the spending of which shall be charged to the department or activities for which the appropriations are made.

Section 7.09 Amending the Budget

Under conditions which may arise and which could not reasonably have been foreseen in the normal process of planning the budget to provide for any additional expense in which the general welfare to the citizenry is involved. These amendments shall be by ordinance and shall become an attachment to the original budget.

Section 7.10 Certification; Copies Made Available

A copy of the budget as finally adopted shall be filed with the City Secretary and such other places required by State law or as the City Council may designate. The final budget shall be printed or otherwise reproduced and sufficient copies shall be made available for the use of all offices, agencies and for the use of interested persons and civic organizations.

Section 7.11 Capital Program

The City Manager shall submit a five year capital program as an attachment to the annual budget. The program submitted shall include: (a) A clear general summary of its contents. (b) A list of all capital improvements which are proposed to be undertaken during the five fiscal years succeeding the budget year, with appropriate supporting information as to the necessity for such improvements. (c) Cost estimates, method of financing and recommended time scheduled for each improvement. (d) The estimated annual cost of operating and maintaining the facilities to be constructed or acquired. The above information may be revised and extended each year with regard to capital improvements still pending or in process of construction or acquisition.

Fiscal Year 2022 Proposed Budget

Section 7.12 Defect Shall Not Invalidate the Tax Levy

Errors or defects in the form or preparation of the budget or the failure to perform any procedural requirements shall not nullify the tax levy or tax rate.

Section 7.13 Lapse of Appropriations

Every appropriation, except an appropriation for a capital expenditure, shall lapse at the close of the fiscal year to the extent that it has not been expended or encumbered. An appropriation for a capital expenditure shall continue in force until the purpose for which it was made has been accomplished or abandoned. The purpose of any such appropriation shall be deemed abandoned if three years pass without any disbursement from or encumbrance of the appropriation. Any funds not expended, disbursed or encumbered shall be deemed excess funds.

Section 7.14 Borrowing

1. The City shall have the right and power, except as prohibited by law or by this Charter, to borrow money by whatever method it may deem to be in the public interest. 2.

Tax Obligations Bond—General

a) The City shall have the power to borrow money on the credit of the City and to issue general obligation bonds for permanent public improvements or any other public purpose not prohibited by law and this Charter, and to issue refunding bonds to refund outstanding bonds previously issued. All such bonds or certificates of obligation shall be issued in conformity with the laws of the State of Texas and shall be used only for purposes for which they were issued. b) No tax obligation bonds shall be issued without an election. The City Council shall prescribe the procedure for calling and holding such elections, shall define the voting precincts and shall provide for the return and canvass of the ballots cast at such elections. If at such elections a majority of the vote shall be in favor of creating such a debt or refunding outstanding valid bonds of the City, it shall be lawful for the City Council to issue bonds as proposed in the ordinance submitting same. However, if a majority of the vote polled shall be against the creation of such debt or refunding such bonds, the City Council shall be without authority to issue the bonds. In all cases when the City Council shall order an election for the issuance of bonds of the City, it shall at the same time submit the question of whether or not a tax shall be levied upon the property of the City for the purpose of paying the interest on the bonds and to create a sinking fund for their redemption. 3. Revenue Bonds—The City shall have the power to borrow money for the purpose of constructing, purchasing, improving, extending or repairing of public utilities, recreational facilities or any other self-liquidating municipal function not prohibited by the State of Texas. With an affirmative vote of at least five of the elected members of the City Council, it shall have the power to issue revenue bonds and to evidence the obligation created thereby. Such bonds shall be a charge upon and payable from the properties, or interest therein pledged or the income therein gained from, or both. The holders of the revenue bonds shall never have the right to demand payment thereof out of monies raised or to be raised by taxation. All such bonds shall be issued in conformity with the laws of the State of Texas and shall be used only for the purpose for which they were issued. Fiscal Year 2022 Proposed Budget

4. Emergency Funding—In any budget year, the City Council may by an affirmative vote of five (5) City Council Members pass a resolution authorizing the borrowing of money. Notes may be issued which are repayable not later than the end of the current fiscal year.

Section 7.15 Purchasing

1. The City Council may by ordinance give the City Manager general authority to contract for expenditures without further approval of the Council, for all budgeted items not exceeding limits set by the Council. All contracts for expenditures involving more than the set limits must be expressly approved in advance by the Council. All contracts or purchases involving more than the limits set by the Council shall be let to the lowest bidder whose submittal is among those responsive to the needs of the City after there has been opportunity for competitive bidding as provided by law or ordinance. The City Council, or City Manager in such cases as he is authorized to contract for the City, shall have right to reject any and all bids. 2. Emergency contracts as authorized by law and this Charter may be negotiated by the City Council or City Manager if given authority by the Council, without competitive bidding. Such emergency shall be declared by the City Council.

Section 7.16 Administration of Budget

1. No payment shall be made or obligation incurred against any allotment or appropriation except in accordance with appropriations duly made, unless the City Manager or his designee first certifies that there is sufficient unencumbered balance in such allotment or appropriation and the sufficient funds there from are or will be available to cover the claim or meet the obligation when it becomes due and payable. 2. Any authorization of payment or incurring of obligation in violation of the provisions of this Charter shall be void and any payment so made illegal. Such action shall be cause for removal of any officer who knowingly authorized or made such payment or incurred such payment or obligation, and shall also be liable to the City for any amount so paid. 3. This prohibition shall not be construed to prevent the making or authorizing of payments, or making of contracts for capital improvements to be financed wholly or partly by the issuance of bonds, time warrants, certificates of indebtedness or certificates of obligation, or prevent the making of any contract or lease providing for payments beyond the end of the fiscal year, providing that such action is made or approved by ordinance. 4. The City Manager shall submit to the council each month a report concerning the revenues and expenditures of the City in such form as requested by the City Council.

Section 7.17 Depository

All monies received by any person, department or agency of the city for or in connection with the affairs of the City shall be deposited promptly in the City Depository or depositories. The City Depositories shall be designated by the City Council in accordance with such regulations and subject to the requirements as to security for deposit and interest thereon as may be established by ordinance and law. Procedures for withdrawal of money or the disbursement of funds from the city depositories shall be prescribed by ordinance. Fiscal Year 2022 Proposed Budget

Section 7.18 Independent Audit

At the close of each fiscal year, and at such other times as may be deemed necessary, the City Council shall call for an independent audit to be made of all accounts of the City by a certified public accountant. The certified public accountant selected shall have no personal interest, directly or indirectly, in the financial affairs of the City or of its officers. The report of audit with the auditor’s recommendations will be made to the City Council. Upon completion of the audit, the summary shall be published immediately in the official newspaper of the City and copies of the audit placed on file in the City Secretary’s office as a public record.

Section 7.19 Power to Tax

1. The City shall have the power to levy, assess and collect taxes of every character and type for any municipal purpose not prohibited by the Constitution and laws of the State of Texas as now written or hereafter amended. 2. The City shall have the power to grant tax exemptions in accordance with the laws of the State of Texas.

Section 7.20 Taxes; When Due and Payable

1. All taxes due in the City of Forney, Texas shall be payable to the designated agent or agency of the City or at such location or locations as may be designated by the City Council, and may be paid at any time after the tax rolls for the year have been completed and approved. Taxes for each year shall be paid before February 1 of the next succeeding year, and all such taxes not paid prior to that date shall be deemed delinquent, and shall be subject to penalty and interest as the City Council shall provide by ordinance. The City Council may provide discounts for the payment of taxes prior to January 1 in amounts not to exceed those established by the State of Texas. 2. Failure to levy and assess taxes through omission in preparing the appraisal rolls shall not relieve the person, firm or corporation so omitted from obligation to pay such current or past due taxes as shown to be payable by recheck of the rolls and receipts for the years in question, omitting penalty and interest.

Section 7.21 Tax Liens, Liabilities and Suits

1. All taxable property located in the City on January 1 of each year shall stand charged from that date with a special lien in favor of the City for the taxes due. All persons purchasing any such property on or after January 1 in any year shall take the property subject to the liens provided above. In addition to the liens herein provided on January 1 of any year, the owner of the property subject to taxation by the City shall be personally liable for the taxes due for that year. 2. The City shall have the power to sue for and recover personal judgment for taxes without foreclosure, or to foreclose its lien or liens, or to recover both personal judgment and foreclosure. In any such suit where it appears that the description of any property in the City appraisal rolls is insufficient to identify such property, the City shall have the right to plead a good description of the property to be assessed, to prove the same, and to have its judgment foreclosing the tax lien or for personal judgment against the owners for such taxes. Fiscal Year 2022 Proposed Budget

GENERAL FUND

The General Fund accounts for all financial transactions not required to be accounted for in another fund. All tax revenues and other revenues not required by law or other City Council action to be accounted for in another fund are accounted for here.

Fiscal Year 2022 Proposed Budget

Property taxes provide one of the largest sources of revenue for the City and determining the tax rate is a significant component of the annual budget process. Therefore, discussion of the General Fund cannot be separated from discussion of the tax rate and associated revenue.

ANALYSIS OF PROPERTY VALUATIONS & TAX RATE PROPERTY VALUATION The Kaufman County Appraisal District (KCAD) establishes and certifies the value of each property within the City of Forney and provides this information to both the city and the County Tax Assessor’s Office. The total certified value for Fiscal Year 2022 (Tax Year 2021) is $2,654,551,468. This is an increase of $447,768,539 or 20.2%.

However, the Kaufman Country Debt Service Total Taxes Assessed Appraisal District does not adjust the Tax Year Assessed Valuation Total Tax Rate M&O Tax Rate Tax Rate 2011 885,199,481 0.743098 0.323198 0.419900 6,577,900 certified taxable value for the Tax 2012 890,258,563 0.749020 0.316925 0.432095 6,668,215 967,431,252 0.749020 0.316925 0.432095 7,246,254 Increment Reinvestment Zone (TIRZ). In 2013 2014 1,047,122,752 0.723486 0.333638 0.389848 7,575,787 order to provide an accurate revenue 2015 1,149,202,404 0.698483 0.350398 0.348085 8,026,984 1,277,357,216 0.651111 0.338445 0.312666 8,317,017 estimate, the City subtracts 85% of the 2016 2017 1,455,653,995 0.621111 0.358330 0.262781 9,041,227 value of the properties included in the 2018 1,658,547,850 0.621111 0.393237 0.227874 10,301,423 1,935,983,668 0.580000 0.386125 0.193875 10,197,205 TIRZ. Total TIRZ value for Fiscal Year 2022 2019 2020 2,206,782,929 0.538710 0.378201 0.160509 10,808,187 is $391,498,933 and 85% of that equals 2021 2,654,551,468 0.501069 0.356015 0.145054 11,633,710 $332,774,093. Therefore, property tax revenue estimates are based on a value of $2,321,777,375. This is an increase of $295,201,035 or 14.56% from the previous year’s adjusted taxable value.

TAX RATE The total tax rate is made up of two portions: Maintenance & Operations (M&O) and Debt Service. Fiscal Year 2022 Proposed Budget

MAINTENANCE & OPERATIONS RATE The Maintenance & Operations (M&O) portion of the tax rate provides funding for all general fund operations. This portion of the tax rate is flexible and can be adjusted to a higher or lower rate based on the needs of the community. The M&O rate also generates reserve funds for future capital expenses and allows the City to maintain a three month operating reserve. The proposed Fiscal Year 2022 Maintenance & Operations rate will decrease $0.02219 (-5.8%) to $0.356015. This rate will result in $8,265,876 in General Fund revenue; an increase of $677,989 (8.9%) from the previous year’s General Fund revenue. Ninety-Eight (98%) percent of the revenue increase, or $666,071 results from the new property value added to the tax roll in 2021.

DEBT SERVICE TAX RATE The Debt Service (DS) portion of the tax rate covers the City’s bond payments and other outstanding debt. This portion of the tax rate is not flexible, and is set by a calculation based on the required fiscal year payments of the City’s debt. Fiscal Year 2022’s debt service rate is $0.145054. This is a decrease of $0.01545 (‐9.6%) from the Fiscal Year 2021 rate, resulting in $3,367,835 in revenue to be used for debt payments. The Debt Service tax rate is calculated by subtracting any revenue paid from other sources from the annual required debt payment and then dividing that result by the adjusted taxable value and multiplying by 100.

(Total annual debt payment) – (Non-tax revenue) ÷ (Adjusted Taxable Value) x 100 = Debt Service Tax Rate ((6,054,217 – 2,686,383) ÷ 2,321,777,375) x 100 = $0.145054

Fiscal Year 2022 Proposed Budget

Series 2008 Series 2011 Series 2012 Series 2012 Series 2014 Series 2014 Series 2015 Series 2016 Series 2016 Series 2017 Series 2017 Series 2020

Prinicipal 195,000.00 50,000.00 235,000.00 220,000.00 1,590,000.00 105,000.00 1,830,000.00 300,000.00 395,000.00 4,920,000.00

Interest 149,312.50 38,887.50 4,680.00 15,700.00 118,412.50 18,900.00 329,475.00 50,050.00 54,281.26 262,200.00 23,400.00 68,918.25 1,134,217.01

Tax Rate 0.001675 0.008600 0.002830 0.010290 0.014191 0.070638 0.006860 0.009990 0.019981 0.145054

PASS THROUGH TOLL AGREEMENT In addition to revenue from the debt service portion of the tax rate, the city receives an annual payment from the Texas Department of Transportation (TxDOT) as part of a Pass Through Tolling agreement. With this agreement, the City sold the 2008 General Obligation Bonds to fund the expansion of three state owned roadways within the city limits, and oversaw the construction. Upon completion of the projects, responsibility for the roadways was returned to the state and TxDOT began to reimburse the City annually. Repayment is structured with a minimum annual payment, with an additional accelerated portion (amount above the guaranteed minimum annual payment) based on traffic counts. The minimum annual payment is $2,009,570. The City Council has deemed any amount above the minimum payment be held as committed fund balance and, if possible, used for early redemption in order to reduce future interest payments. The city has redeemed an additional $17,037,448 resulting in $8,575,962 in interest savings. Combined with general obligation refunding and increasing property values, this early redemption process has also helped to decrease the debt service tax rate by $0.25 since Fiscal Year 2014. To date, the 2014 Certificates of Obligation have not impacted the debt service tax rate. The proceeds from these certificates were used to fund construction of Fire Station #2 and the new Animal Shelter. The payments have been made from fund balance in the Debt Service fund. Payments for the 2017 Tax Notes are also being made from fund balance. This fund balance is the result of interest collected in the fund, as well as delinquent and penalty taxes that have accumulated over prior years and is restricted to use on debt payments. TOTAL TAX RATE The total tax rate for Fiscal Year 2022 is proposed at $0.501069. Tax revenue estimates are calculated at a 100% collection rate and are expected to result in a total of $11,633,710. This is an increase of $825,515 (7.64%) from Fiscal Year 2021 and is the result of an increase in assessed valuation and new taxable value. New taxable value added to the tax roll contributed 113% of the revenue increase. The total tax rate has decreased each year since Fiscal Year 2014 (Tax Year 2013). The total five-year reduction is $0.12. Fiscal Year 2022 Proposed Budget

PROPERTY VALUATIONS & TAX RATE SUMMARY • Property values have increased 82% in the past 5 years, due to significant new development o The Fiscal Year 2022 property value increase is 20.29% - of that increase 55% is the result of new value added • Total Tax Rate has decreased $0.12 in the past 5 years o Maintenance & Operations tax rate has decreased $0.002  While the M&O tax rate is no longer increasing, the increase in property values still provides funding for enhanced existing services, new services, and cash funded capital improvement without increasing taxpayer burden • Debt Service tax rate has decreased $0.12

Fiscal Year Tax Year

Estimated Tax Roll TIF Property Value Value Used for Revenue Calculation Proposed Tax rate per $100 Valuation Revenue from Taxes Estimated Collection Rate Estimated Current Year Funds Available

Fiscal Year Tax Year

Maintenance & Operations Rate M&O Yield Debt Service Rate Debt Service Yield

Total Rate Total Yield

Estimated Ad Valorem Tax Revenue

2019 2018

2020 2019

2021 2020

2022 2021

FY 2020 TO FY 2021 CHANGE

$ Change

1,935,983,668 177,844,682

2,206,782,929 180,206,589

2,654,551,468 332,774,093

1,541,669,511

1,758,138,986

2,026,576,340

2,321,777,375

0.621111

0.580000

0.538710

0.501069

(0.03764)

-6.99%

9,575,479 99%

10,197,206 99%

10,917,360 99%

11,633,707 100%

716,346 100%

7.02%

9,479,724

2019 2018

10,095,234

10,808,187

11,633,707

Distribution of Current Tax Collections 2020 2019

2021 2020

2022 2021

447,768,539 152,567,504

% Change

1,658,547,850 116,878,339

295,201,035

825,520

20.29% 84.66% 14.57%

7.64%

FY 2020 TO FY 2021 CHANGE

$ Change

% Change

0.393237

0.380567

0.378201

0.356015

(0.022186)

-5.87%

6,001,791 0.227874 3,477,930

6,623,988 0.199433 3,471,245

7,587,887 0.160509 3,220,300

8,265,876 0.145054 3,367,835

677,989 (0.01545) 147,535

8.94% -9.63% 4.58%

0.621111 9,479,721

Fiscal Year 2022 Proposed Budget

0.580000 10,095,234

0.538710 10,808,187

0.501069 11,633,711

(0.037641) 825,524

-6.99% 7.64%

GENERAL FUND STATEMENT History Beginning Fund Balance Revenue Operating Revenues Transfers In Utility Fund Operating Transfer Covid-19 Building Security Fund Juvenile Case Manager Fund Economic Development Fund

Projected

Budget 2022 Budget % Change 16,109,989 272.39%

2020 Actual 2,584,746

2021 Budget 4,326,060

2021 Revised 8,712,361

26,623,488

21,161,487

30,982,291

25,494,836

20.48%

1,785,880 2,400 123,910 1,912,190

1,785,880 3,600 123,910 1,913,390

1,270,329 3,600 96,000 1,369,929

-28.87% 50.00% -22.52% -28.36%

1,750,243 (366,502) 2,400 27,888 119,271 1,533,300

Total Revenue

28,156,788

23,073,677

32,895,681

26,864,765

Expenditures Operating Expenses

18,966,014

22,253,199

21,813,516

25,994,861

16.43% 16.81%

Fund Balance

11,775,520

5,146,538

19,794,526

16,979,893

229.93%

512,596 1,763,625 239,438 547,500 3,063,159

2,824,837 259,700 600,000 3,684,537

13,000,000 190,000 2,000,000 15,190,000

8,712,361

1,462,001

16,109,989

1,789,893

360.20% -26.84% 233.33% 312.26% 22.43%

Transfers Out Operating Fund Reserve Capital Improvement Projects Fund Special Events Fund Capital Purchases (Equipment) Fund

Ending Fund Balance

Fiscal Year 2022 Proposed Budget

GENERAL FUND REVENUE Tax revenue is the General Fund’s largest source of income and makes up 90% of the revenue collected. Tax revenue includes property tax, sales taxes, franchise taxes and payments in lieu of taxes. The General Fund also collects revenue from permits and inspections, court fines, fire protection, park fees, donations, grants, and interest earnings. History Tax Revenue Sales Revenue Court Fines Permits & Inspections Donations & Grants Parks & Recreation Interest & Penalty Miscellaneous Transfers In to General Fund General Fund Revenue

2020 Actual

18,985,255 197,433 3,510,990 306,407 47,477 3,117,026 458,903 1,533,300 28,156,791

Projected 2021 Budget

19,444,727 15,000 180,560 1,184,500 36,700 250,000 50,000 1,912,190 23,073,677

Budget

2021 Revised

21,802,100 15,000 182,560 7,114,000 1,634,717 92,290 67,200 74,424 1,913,390 32,895,681

2022 Budget

22,867,486 15,000 181,100 2,128,000 97,750 50,000 79,500 1,369,929 26,788,765

% Change

17.60% 0.00% 0.30% 79.65% 0.00% 166.35% -80.00% 59.00% -28.36% 16.10%

REVENUE DETAIL

Tax Revenue - $22,867,486

At 43% of the city’s total budgeted tax revenue, sales tax is now the city’s largest source of tax revenue. Property taxes are now at 36% of tax revenue collections. History 2020 Actual

40101 Property Tax 40102 Property Tax Reduction 40106 Property Tax Penalties 40108 Delinquent Property Tax 40109 Fire Protection Income 40110 Sales Tax 40111 Mixed Beverage Sales Tax 40119 Franchise Tax 40199 Payment in Lieu of Taxes Tax Revenue

7,096,005 2,451,488 27,570 79,582 717,931 5,109,991 50,137 1,172,551 2,280,000 18,985,255

Projected 2021 Budget

7,587,887 2,424,106 15,000 15,000 1,116,522 4,848,212 58,000 1,100,000 2,280,000 19,444,727

Budget

2021 Revised

7,932,815 3,034,588 34,000 70,000 1,116,522 6,069,175 45,000 1,220,000 2,280,000 21,802,100

2022 Budget

8,265,876 3,247,009 15,000 15,000 1,305,583 6,494,018 45,000 1,200,000 2,280,000 22,867,486

% Change

8.94% 33.95% 16.93% 33.95% -22.41% 9.09% 17.60%

Property Taxes - $8,265,876 The Kaufman County Appraisal District (KCAD) establishes the value of each property within the City of Forney. The certified taxable value for 2022 is $2,654,551,468. However, the KCAD does not adjust certified taxable value for property in the Tax Increment Reinvestment Zone (TIRZ). As explained in the property tax analysis, the City subtracts these amounts in order to provide an accurate revenue estimate. This results in property tax revenue budgets being based on a value of $2,321,777,093. The General Fund property tax revenue estimate is calculated by dividing the taxable value by 100 and multiplying by the maintenance and operations tax rate. The maintenance and operations tax rate for 2022 is set at $0.356015, a decrease of 0.002219 (-5.8%) from the prior year’s rate. This rate will result in an increase of Fiscal Year 2022 Proposed Budget

$825,515 (7.6%) from the Fiscal Year 2021 budget. The increase is the result of increased property values as well as new property added to the tax roll. Property Tax Reduction - $3,247,009 In May of 1994, Forney citizens approved an additional 1.00% sales tax for the purpose of creating and funding the Forney Economic Development Corporation (FEDC) and property tax reduction. Half of the approved 1.00% funds the FEDC and the other half is retained by the City in order to offset property taxes. Therefore, property reduction tax is equal to 25% of total sales tax collections and is a reduction of $0.14 on the property tax rate.

Property Tax Penalty - $15,000 Collection of penalties from ad valorem taxes due from previous years. Delinquent Property Tax - $15,000 Collection of ad valorem taxes due from previous years. Both Property Tax Penalty and Delinquent Property Tax are difficult to predict due to fluctuation in delinquency rates. These items are budgeted for based on collections from previous years.

Fire Protection - $1,305,583 The City has an agreement with the Town of Talty whereby the Forney Fire Department provides emergency and fire protection to the Town of Talty. The agreed upon fee is $0.03 per $100 of total property valuation. The expected revenue from the Town of Talty for Fiscal Year 2022 is $81,079. A similar agreement is in place with the Kaufman County Emergency Services District #6 for fire protection. The agreed upon fee has been increased from $0.02 per $100 valuation to $0.03, resulting in $1,224,504 in fire protection revenue. Sales Tax - $6,494,018 Sales tax is levied on taxable commodities and services purchased within the Forney city limits at the point of sale. The sales tax rate in the City of Forney is 8.25%. Over the past five years, sales tax revenues have increased an average of 12% per year. This continued increase is indicative of a growing local economy, resulting from continued population growth within the city limits and the surrounding area, as well as increased commercial development. Fiscal Year 2022 Proposed Budget

Sales Tax Breakdown

State of Texas City of Forney Property Reduction Tax Economic Development Corporation

The Fiscal Year 2021 budget assumed no increase in sales tax revenue, and actual collections are trending toward an increase of 22% over the prior year.

6.25% 1.00% 0.50% 0.50% 8.25%

The 2021 budget was prepared cautiously with the expectation that COVID would decrease revenue and expenses would need to be lowered in order to offset the revenue loss. This has not proven to be the case and as citizens stayed closer to home and worked remotely, our sales tax reciepts have increased. The Fiscal Year 2022 budget remains conservative and projects a 7% increase over 2021 year-end projections. Mixed Beverage Sales Tax - $45,000 This is the combination of the State of Texas Mixed Beverage Gross Receipt and Mixed Beverage Sales Tax. These are taxes imposed on the gross receipts of an alcohol permittee from the sale, preparation, or service of mixed beverages or service of ice or nonalcoholic beverages that are sold, prepared or served for the purpose of being mixed with an alcoholic beverage and consumed on the premises. The gross receipt tax is charged at a rate of 6.7% to the permittee and can not be passed on to the customer. The sales tax is charged at a rate of 8.25% and is passed on to the customer. Both of these taxes are collected by the state and disbursed to the City at a rate of 10.7% of total collections. Estimates for mixed beverage sales taxes are based on prior year collections and has increased in recent years with new development bringing in more restaurants and establishments that prepare mixed beverages. Franchise Tax - $1,200,000 This is a tax charged to utility and public service companies that require the use of City right of way to run transmission lines in order to provide their services. These fees vary by company or service and are established by the City Council when the use of right of way is requested by the service provider. Generally, this fee is a percentage of the revenues collected by the service providers from their use of the City right of way. Payment in Lieu of Taxes - $2,280,000 The City has entered into an agreement with the power plant whereby the power plant makes an annual payment in place of the ad valorem tax that would have otherwise been due had the facility been annexed.

Sales Revenue* - $15,000 Projected

History

40265 Payment Processing Fees Sales Revenue

2020 Actual

2021 Budget

15,000 15,000

Budget

2021 Revised

15,000 15,000

2022 Budget

15,000 15,000

% Change

*Sales Revenue included Fire Protection and Parks & Recreation revenues until Fiscal Year 2021. Fire Protection has been relocated to Tax Revenue and Parks & Recreation revenue now has a separate revenue category.

Payment Processing Fees - $15,000 The City added a payment processing fee in Fiscal Year 2021. Credit card companies charge an average of 3% per transaction to process credit card payments and the city has absorbed these fees for a number of years. Fiscal Year 2022 Proposed Budget

Court Fines - $181,100 History 40300 Animal Control Income 40301 Municipal Court Fines 40305 Local Traffic Fee 40306 Unrestricted Time Pay Fines 40307 Unrestricted DPS Warrant Fees 40308 Unrestricted DPS Arrest Fees 40310 Judicial Support Fees 40311 OMNI Fees 40313 Local Municipal Jury Funds Court Fines

2020 Actual

9,805 165,756 1,831 2,111 11,275 5,683 255 647 70 197,433

Projected 2021 Budget

8,500 150,000 1,600 2,000 9,500 7,000 1,000 860 100 180,560

Budget

2021 Revised

10,500 150,000 1,600 2,000 9,500 7,000 1,000 860 100 182,560

2022 Budget

9,000 150,000 1,800 2,100 11,000 6,500 700 181,100

% Change

5.88% 12.50% 5.00% 15.79% -7.14% -100.00% -18.60% -100.00% 0.30%

Animal Control Revenue - $9,000 Fines are collected for the violation of animal control ordinances and fees are assessed for the adoption of animals held at the animal shelter. Municipal Court Fines - $172,100 The majority of the City’s Municipal Court fines are collected from traffic and code violations. While the City retains the largest portion of these fines, based on the offense committed and other factors, portions of the fines are distributed to the state, the county and other agencies. Some of the fines collected by the Municipal Court have restrictions set on the use of those revenues and are accounted for in special revenue funds.

Permits & Inspections - $2,128,000 History

40402 Inspection Income 40410 Zoning & Platting Fees 40411 Engineering Inspection Fees 40420 License & Registration Fees 40421 Sign Permit Fees 40423 Fence Permit Sales 40424 Mechanical Permit Sales 40425 Plumbing Permit Sales 40426 Sprinkler Permit Sales 40427 Swimming Pool Permit Sales 40428 Miscellaneous Permit Sales 40429 Building Permit Sales 40430 Food Service Permit Sales 40431 Fire Prevention Permit Sales 40432 Residential Fire Inspections 40434 Rental Property Registration 40435 Fire Marshal Plan Review Permits & Inspections

2020 Actual

28,544 116,358 409,159 8,520 15,100 3,375 9,400 9,800 15,760 45,680 122,568 2,580,736 74,640 38,650 32,700 3,510,990

Projected 2021 Budget

20,000 50,000 80,000 6,500 10,000 2,000 6,000 10,000 20,000 20,000 65,000 750,000 65,000 55,000 20,000 5,000 1,184,500

Budget

2021 Revised

30,000 205,000 650,000 7,500 12,000 2,000 9,500 12,000 45,000 40,000 99,000 3,500,000 80,000 67,000 95,000 60,000 2,200,000 7,114,000

2022 Budget

30,000 85,000 80,000 7,500 13,000 3,000 9,500 10,000 20,000 40,000 95,000 1,000,000 75,000 55,000 45,000 60,000 500,000 2,128,000

% Change

50.00% 70.00% 15.38% 30.00% 50.00% 58.33% 100.00% 46.15% 33.33% 15.38% 125.00% 1100.00% 79.65%

Revenue categories for Permits & Inspections are relatively self-explanatory. This revenue category as a whole is expected to finish 2021 at approximately 500% above the original budget, which indicates the most substantial period of growth in the city’s history. Fiscal Year 2022 Proposed Budget

As in the prior years, the largest increases are in the areas of Zoning and Platting Fees and Engineering Inspection Fees. Building permits for the year are once again increased significantly when compared to the previous year. Revenue estimates for 2022 are conservative, and take into account the possibility that growth will slow. The Finance department approaches permit and inspections revenue with the understanding that this revenue is directly related to growth and will not continue at these levels, and attempts to prepare the General Fund budget in a way that keeps the city from being reliant on this revenue to fund operations.

Donations & Grants - $0 History

40601 Grants Received 40602 Donations Received Donations & Grants

2020 Actual

298,519 7,888 306,407

Projected 2021 Budget

Budget

2021 Revised

1,627,972 6,745 1,634,717

2022 Budget

% Change

Grants Received - $0 No grant revenue was anticipated for Fiscal Year 2021. However, several grants were received. • The final payment for the 2017 SAFER Grant in the amount of $90,349 was received at the beginning of the year. • The Police department received a tobacco sting grant of $2,250. • The Police and Fire departments received a Covid-19 Hazard Pay Grant in the amount of $368,816. • The City received the remainder of the CARES Grant in the amount of $1,166,557.

Fiscal Year 2022 Proposed Budget

Parks and Recreation - $97,750 History 2020 Actual

40700 Parks - Miscellaneous 40701 Pavilion Rental 40702 Amphitheater Revenue 40703 Concession Rental 40710 Adult Softball Lights 40720 Adult Softball Tournament Fees 40722 Baseball Tournament Fees 40723 Youth Softball Tournament Fees 40730 Adult Softball User Fees 40731 Youth Soccer User Fees 40732 Youth Baseball User Fees 40733 Youth Softball User Fees 40734 Dek Hockey User Fees 40735 Youth Football User Fees 40736 Sand Volleyball User Fees 40737 Tennis User Fees 40738 Cornhole User Fees Parks & Recreation

3,870 4,365 (322) 13,645 13,919 12,000 47,477

Projected 2021 Budget

200 8,500 5,000 10,000 3,500 9,500 36,700

Budget

2021 Revised

200 10,000 (10) 2,600 10,000 9,500 60,000 92,290

2022 Budget

9,500 2,600 8,000 4,000 1,500 35,000 16,000 5,000 4,500 7,500 2,400 750 1,000 97,750

% Change

-100.00% 11.76% -100.00% -100.00% -100.00% -84.21% 166.35%

Parks and Recreation collects fees for private use of facilities, classes, user fees, tournament fees and events put on by the Parks or Special Events departments. All parks revenue categories are budgeted based on averages from prior years, unless upcoming events indicate a change in revenue. In Fiscal Year 2021, the City Council requested that Parks revenues and expenses be tracked in a much more detailed manner in order to better evaluate parks fees. The Finance deparment worked with the Parks & Recreation department to establish a separate revenue category for fees collected. The budgeted revenues above show only the line items that currently have collections recorded. Pavilion Rentals - $9,500 - Organizations or individuals that use city pavilions are charged a fee for the use of pavilion spaces. A $50.00 fee is charged to residents, and a $100.00 fee is charged to non-residents. Tournament Fees - $12,000 - All teams registered in tournaments conducted by sports associations and/or promoters on city park facilities are subject to a registration fee of 10% of the total registration fee charged by the host, not to exceed $25.00. The same fee is charged to vendors for tournaments and other special events. Park User Fees - $73,650 - User fees are charged to youth sports associations under contract with the city for park facility usage.

Fiscal Year 2022 Proposed Budget

Interest & Penalty - $50,000 History 2020 Actual

40802 Investment Discount 40805 Interest Income Interest & Penalty

308,260 2,808,766 3,117,026

Projected 2021 Budget

Budget

2021 Revised

250,000 250,000

7,200 60,000 67,200

2022 Budget

% Change

50,000 50,000

-80.00% -80.00%

Miscellaneous Income - $50,000 History 2020 Actual

40900 Miscellaneous Income 40904 ESD #6 Other Income 40905 Sidewalk Improvement Program 40911 Sale of Assets 40917 Insurance Reimbursements 40924 City Hall Paver Sales Miscellaneous

78,745 26,832 5,152 22,090 325,684 400 458,903

Projected 2021 Budget

Budget

2021 Revised

50,000 50,000

65,000 5,000 4,424 74,424

2022 Budget

% Change

75,000 4,500 79,500

50.00% 59.00%

Revenues collected under Miscellaneous Income include all items that do not fall into any other category, insurance reimbursements, other reimbursement, and participation from other agencies on joint purchases.

Transfers from Other Funds - $1,912,190 History 2020 Actual

Utility Fund Operating Transfer COVID-19 Building Security Fund Juvenile Case Manager Fund Economic Development Fund Transfers In to General Fund

1,750,243 (366,502) 2,400 27,888 119,271 1,533,300

Projected 2021 Budget

1,785,880 2,400 123,910 1,912,190

Budget

2021 Revised

1,785,880 3,600 123,910 1,913,390

2022 Budget

1,270,329 3,600 96,000 1,369,929

% Change

-28.87% 50.00% -22.52% -28.36%

The Utility Fund Operating Transfer reimburses the General Fund for expenditures incurred on behalf of the utility related functions of the City. This includes salary and benefits for all employees that are partially funded from both funds. The Building Security Fund transfer is used to offset the cost of Police Officers functioning as Municipal Court Bailiff. The Juvenile Case Manager Fund transfer offsets the salary and benefits of one of the Deputy Court Clerk positions that handles juvenile cases. This transfer has been suspended for Fiscal Year 2022. The operating transfer from the Economic Development Corporation covers services provided by the city’s Legal Services, Finance, Human Resources, and Information Technology departments. The transfer also includes a fee for office space at city hall.

Fiscal Year 2022 Proposed Budget

GENERAL FUND EXPENSES The General Fund accounts for all expenses not required to be accounted for in other funds. This includes the expenses for services such as Police, Fire, Parks, Streets, Community Development, City Council and all other administrative Services. CATEGORY Salary & Benefits Services & Supplies Maintenance & Repair Information Technology Parks & Recreation Miscellaneous General Fund Expenses

History 2020 Actual 13,335,338 3,035,342 1,336,238 577,953 681,143 18,966,014

Projected 2021 Budget 2021 Revised 15,258,819 14,637,278 3,599,789 3,737,002 2,249,382 2,338,442 626,709 784,739 518,500 316,055 22,253,199 21,813,516

Budget 2022 Budget % Change 18,747,455 22.86% 3,583,246 -0.46% 2,348,864 4.42% 1,049,296 67.43% 30,000 236,000 -54.48% 25,994,861 16.81%

Salary & Benefits makes up 72% of total General Fund expenses. This includes 176.50 of the total 223.5 city employees. Services & Supplies makes up the second largest expense category at 14% and accounts for all of the supplies and professional services utilized in the general functions of the City. Maintenance & Repair includes costs associated with maintaining equipment and facilities as well as drainage and roadways within the city limits. Miscellaneous expenses include the General Fund line-item contingency of $200,000. Capital outlay for the General Fund is accounted for in the Capital Purchases Fund.

DEPARTMENT Fire Police Information Technology Parks & Recreations Streets Finance Engineering City Manager Human Resources Facilities Maintenance Building Inspections Legal Services Fleet Services Animal Control Planning Neighborhood Services Municipal Court City Secretary City Council NonDepartmental General Fund Expenses

History 2020 Actual 4,375,376 4,489,223 1,444,685 1,370,180 1,402,683 1,503,267 780,012 383,642 321,411 466,908 653,952 428,962 915 257,034 324,035 124,817 319,955 173,282 47,410 98,265 18,966,014

Fiscal Year 2022 Proposed Budget

Projected 2021 Budget 2021 Revised 4,729,424 4,473,595 5,223,576 4,970,265 1,600,278 1,684,043 1,334,531 1,301,263 2,112,608 1,906,514 1,414,155 1,259,159 873,866 861,359 497,736 717,753 534,413 398,027 731,602 915,849 721,748 711,904 607,556 637,660 455,075 486,858 272,219 292,961 353,282 365,508 173,899 177,655 340,572 362,936 201,640 216,224 75,019 73,983 22,253,199 21,813,516

Budget 2022 Budget % Change 6,129,676 29.61% 6,071,800 16.24% 1,792,802 12.03% 1,661,660 24.51% 1,554,600 -26.41% 1,369,035 -3.19% 1,099,638 25.84% 992,519 99.41% 992,134 85.65% 812,784 11.10% 717,198 -0.63% 528,616 -12.99% 486,920 7.00% 373,986 37.38% 372,602 5.47% 358,294 106.04% 348,661 2.38% 205,410 1.87% 126,526 68.66% 25,994,861 16.81%

General Fund Expenses are expected to increase 16.81% for Fiscal Year 2022. Approximately 60% of the increase in operating expenses is the addition of 25 new full-time equivalents. Other items impacting budget are covered in the department summaries below.

GENERAL FUND DEPARTMENT SUMMARIES

CITY COUNCIL 1016 Services & Supplies City Council

History 2020 Actual 47,410 47,410

Projected 2021 Budget 2021 Revised 75,019 73,983 75,019 73,983

Budget 2022 Budget % Change 126,526 68.66% 126,526 68.66%

The City Council is the legislative body for the City, functioning under the Home Rule Charter adopted November 4, 1997. The department provides funding related to the administration of the legislative function. With a number of new City Council members, funds were increased for education and training, uniforms, travel and the City’s strategic plan.

ENGINEERING 1020 Salary & Benefits Services & Supplies Maintenance & Repair Engineering

Projected Budget History 2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 730,822 793,158 778,486 1,008,748 27.18% 43,251 77,708 79,873 85,090 9.50% 5,939 3,000 3,000 5,800 93.33% 780,012 873,866 861,359 1,099,638 25.84%

The Engineering Department is responsible for enforcing development and ensuring that capital and operation projects follow City and NCTCOG design standards. In addition, the department acts as the flood plain administrator to guarantee the National Flood Insurance Program is secured. The major increase in this department is the addition of two new positions. Fiscal Year 2022 Proposed Budget

LEGAL SERVICES 1021 Salary & Benefits Services & Supplies Maintenance & Repair Legal Services

History 2020 Actual 269,370 159,592 428,962

Projected Budget 2021 Budget 2021 Revised 2022 Budget % Change 288,236 319,511 360,271 24.99% 318,820 317,648 167,845 -47.35% 500 500 500 607,556 637,659 528,616 -12.99%

The City Attorney is appointed by and answerable to the City Council, as representatives of the City of Forney. This budget has decreased as the need for additional outside counsel has been reduced.

CITY MANAGER 1023 Salary & Benefits Services & Supplies Maintenance & Repair City Manager's Office

Projected Budget History 2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 351,048 401,836 553,023 804,799 100.28% 27,896 95,400 163,730 187,220 96.25% 4,699 500 1,000 500 383,643 497,736 717,753 992,519 99.41%

The City Manager’s Office is responsible for the overall administration and coordination of all City departments and functions, assuring that the City Council policies are implemented, and legal requirements are met. The department also serves as the primary contact between the City Council and City departments and is responsible for advising the City Council regarding policy decisions. Expenses in this department will increase by 99%. This will be the first full year of the Deputy City Manager positions salary and benefits. The department is also budgeting to hire a Director of Communications. With the absence of a full-time City Manager, this budget includes funds for an Interim City Manager and all associated fees, as well as six months of a regular City Manager’s salary and benefits.

Fiscal Year 2022 Proposed Budget

CITY SECRETARY 1024 Salary & Benefits Services & Supplies City Secretary

History 2020 Actual 156,864 16,418 173,282

Projected Budget 2021 Budget 2021 Revised 2022 Budget % Change 174,009 177,065 181,792 4% 27,631 39,158 23,618 -14.52% 201,640 216,223 205,410 1.87%

The City Secretary department provides administrative support to the legislative function of the City. The department oversees preparation of the City Council agendas and minutes and enrolls laws adopted by the City Council. The department is also responsible for election administration, records retention, processing requests for public information and coordinating the appointment process for Boards & Commissions.

MUNICIPAL COURT 1109 Salary & Benefits Services & Supplies Maintenance & Repair Miscellaneous Municipal Court

History Projected Budget 2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 210,237 229,596 231,259 239,941 5% 109,574 110,476 131,378 108,220 -2% 161 500 300 500 (18) 319,954 340,572 362,937 348,661 2%

The Municipal Court department has jurisdiction over all fine-only offenses committed within the Forney city limits. These offenses include Class C misdemeanors, traffic offenses, and City code violations. The court collects fines, conducts trials, and issues warrants of arrest. The Municipal Court Judge also arraigns prisoners and performs other magistrate duties.

FINANCE 1126 Salary & Benefits Services & Supplies Maintenance & Repair Miscellaneous Finance

History 2020 Actual

554,084 288,936 4,495 655,752 1,503,267

Projected 2021 Budget

592,285 325,220 6,650 490,000 1,414,155

Budget

2021 Revised

624,170 339,134 5,855 290,000 1,259,159

2022 Budget

798,499 329,536 5,000 236,000 1,369,035

% Change

34.82% 1.33% -24.81% -51.84% -3.19%

The Finance department is responsible for safeguarding the City’s financial resources by maintaining central accounting records and bank accounts, disbursing all City obligations, annual budget and audit preparations, financial forecasting and overseeing the City’s investment policy. The Finance department added a Budget Analyst in late Fiscal Year 2021 and plans to add a Purchasing Manager in 2022. The reduction in overall expenses is the result of removing funds allocated for development incentives initiated by the City Council. Fiscal Year 2022 Proposed Budget

POLICE 1202 Salary & Benefits Services & Supplies Maintenance & Repair Police

History 2020 Actual 4,017,328 357,186 101,846 4,477,360

Projected 2021 Budget 2021 Revised 4,885,687 4,433,856 308,866 368,738 29,023 5,223,576

167,671 4,970,265

Budget 2022 Budget % Change 5,718,508 17.05% 319,309 3.38% 33,983 6,071,800

17.09% 16.24%

The Police department protects the lives and property of the citizens through the enforcement of state and local laws and the use of established crime prevention techniques. The department is staffed with certified peace officers and trained civilian employees who work in the areas of patrol, criminal investigation, emergency dispatch and department administration. The Police department is adding 5.50 FTEs in Fiscal Year 2022.

ANIMAL CONTROL 1204 Salary & Benefits Services & Supplies Maintenance & Repair Animal Control

History Projected Budget 2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 210,757 213,900 234,610 326,537 52.66% 43,498 57,319 57,351 46,449 -18.96% 305 1,000 1,000 1,000 254,560 272,219 292,961 373,986 37.38%

The Animal Control department works to unite owners with their lost pets and to promote the adoption of unclaimed, unwanted, stray, and abandoned pets within the Forney city limits. This increase in Animal Control is entirely due to the addition of 1.5 new FTEs.

FIRE 1303 Salary & Benefits Services & Supplies Maintenance & Repair Fire

History 2020 Actual

3,956,433 285,608 132,830 4,374,871

Projected 2021 Budget

4,355,849 277,266 96,309 4,729,424

2021 Revised

3,583,768 222,341 155,833 3,961,942

Budget 2022 Budget

5,612,056 290,288 227,332 6,129,676

% Change

28.84% 4.70% 136.04% 29.61%

The Fire department consists of full-time and part-time paid professionals. The department responds to incidents involving fires, rescues and emergency medical needs as well as fulfilling the requirements of fire prevention/education, building inspections, fire investigations, and various other public service and safety needs within our community. The Fire department responds to an area of approximately 80 square miles that consists of the City of Forney, the Town of Talty, and Kaufman County Emergency Services District #6.

Fiscal Year 2022 Proposed Budget

The Fire department is adding nine new positions. This includes all of the expenses related to outfitting and equipping that many new employees, as well as some additional upgraded or new noncapital equipment.

PARKS & RECREATION 1407 Salary & Benefits Services & Supplies Maintenance & Repair Parks & Recreation Miscellaneous Parks & Recreation

History 2020 Actual

851,233 403,337 96,676 18,934 1,370,180

Projected 2021 Budget

852,711 386,370 88,850 6,600 1,334,531

Budget

2021 Revised

869,909 337,504 92,250 1,600 1,301,263

2022 Budget

1,127,901 413,009 90,750 30,000 1,661,660

% Change

32.27% 6.89% 2.14% -100.00% 24.51%

The Parks & Recreation department is responsible for providing well maintained facilities that foster recreational and athletic activities in a safe, clean, and comfortable environment. The department provides routine maintenance, repairs, and improvements to the parks system which currently includes seventeen park sites with a variety of amenities. This will be the first full year of the Recreation Assistant, three new Parks Maintenance Technicians, and the Crew leader promotion added in Fiscal Year 2021. The 2022 parks budget also includes a Special Events Coordinator position and funding for the reclassification of a position to Assistant Director. Funds are also included to continue the expansion of the city’s recreation program.

STREETS 1514 Salary & Benefits Services & Supplies Maintenance & Repair Streets

History

2020 Actual

Projected

2021 Budget

2021 Revised

345,964

400,325

380,365

472,154 584,565 1,402,683

559,283 1,153,000 2,112,608

373,149 1,153,000 1,906,514

Budget

2022 Budget

298,600 1,256,000 1,554,600

% Change

-100.00% -46.61% 8.93% -26.41%

The Streets department is responsible for the maintenance of over 98 miles of streets, 35 miles of storm drainage and more than 1,000 street signs within the City limits. The department is also responsible for mowing and tree trimming in the City rights of way and medians. All of the employees previously accounted for in the Streets department are now accounted for in Public Works Administration. Maintenance & Repair budgets have been increased as the Public Works department works to develop a more robust streets maintenance program.

Fiscal Year 2022 Proposed Budget

FACILITIES MAINTENANCE 1515 Salary & Benefits Services & Supplies Maintenance & Repair Facilities Maintenance

Projected 2020 Actual

126,945 74,104 259,283 460,332

2021 Budget

127,935 96,167 507,500 731,602

Budget

2021 Revised

311,860 255,989 348,000 915,849

2022 Budget

% Change

- -100.00% 372,784 287.64% 440,000 -13.30% 812,784 11.10%

The Facilities Maintenance department accounts for the costs to maintain city facilities including electrical, plumbing, and HVAC repair and installation. The department also accounts for the purchase of paper and cleaning supplies for all facilities along with the personnel that support the department. The Facilities department was moved from the Operations Division to the Public Works Division. The salary and benefits for the department were also moved to the Public Works Administration department. In prior years, only the utilities for City Hall and Community Development were accounted for in this department. The largest increase in Services & Supplies resulted from reallocating all utilities for city facilities to this department.

FLEET SERVICES 1516 Salary & Benefits Services & Supplies Maintenance & Repair Fleet Services

History 2020 Actual

915 915

Projected 2021 Budget

205,075 250,000 455,075

Budget

2021 Revised

26,850 210,009 250,000 486,859

2022 Budget

1,020 210,900 275,000 486,920

% Change

0.00% 2.84% 10.00% 7.00%

*The 2022 budget currently shows $1,020 in Salary & Benefits. This is a phone allowance that was missed in the move to PW Administration. It will be corrected before the budget is adopted.

The Fleet Services department accounts for the cost for supporting and maintaining the city's vehicle fleet. The department consolidates all previous department allocations for fuel and maintenance for vehicles from UTV to Medium Duty trucks. Fleet maintenance will also manage the purchase and standardization of all future vehicles to the city’s fleet. During Fiscal Year 2021, a Fleet Service Coordinator position was added. With the relocation of Fleet from Operations Division to Public Works, the position was moved to Public Works Administration. The department budget remains flat as the true needs of the department continue to be evaluated.

Fiscal Year 2022 Proposed Budget

NEIGHBORHOOD SERVICES 1605 Salary & Benefits Services & Supplies Maintenance & Repair Neighborhood Services

History 2020 Actual

73,002 50,943 872 124,817

Projected 2021 Budget

77,453 96,447 173,900

Budget

2021 Revised

80,507 97,148 177,655

2022 Budget

240,608 117,686

% Change

210.65% 22.02% 106.03%

358,294

The Neighborhood Service department is responsible for ensuring a clean and healthy environment for the community by enforcing city codes such as high grass, junked vehicles, illegal signs, unsightly matter on private premises, and zoning regulations. The department will add two new Neighborhood Services Specialist and all associated expenses in 2022.

BUILDING INSPECTIONS 1620 Salary & Benefits Services & Supplies Maintenance & Repair Building Inspections

History 2020 Actual

480,648 170,776 2,528 653,952

Projected 2021 Budget

523,380 196,568 1,800 721,748

Budget

2021 Revised

513,216 196,888 1,800 711,904

2022 Budget

605,142 110,056 2,000 717,198

% Change

15.62% -44.01% 11.11% -0.63%

The Building Inspections department ensures that new or remodeled structures conform to adopted building codes and standards. The department reviews building plans, issues permits, and performs inspections to ensure compliance with building codes and local ordinances. The City contracts with Bureau Veritas for assistance with additional plan review and inspection services. This budget will remain flat. The reduction in use of Bureau Veritas, has resulted in lower Services & Supplies costs. This offsets the increase in Salary & Benefits.

PLANNING 1627 Salary & Benefits Services & Supplies Maintenance & Repair Planning

History Projected Budget 2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 306,300 335,350 347,622 357,967 6.74% 15,790 17,932 17,886 14,635 -18.39% 1,944 324,034 353,282 365,508 372,602 5.47%

The Planning department is responsible for ensuring that the physical development and land use of the community is accomplished according to the codes, ordinances, and plans adopted by the Planning & Zoning Commission and the City Council. The increase in this budget is entirely due to the budgeted salary increase for existing staff.

Fiscal Year 2022 Proposed Budget

HUMAN RESOURCES 1725

Salary & Benefits Services & Supplies Maintenance & Repair Human Resources

Projected

History 2020 Actual

181,955 139,345 112 321,412

2021 Budget

400,417 133,496 500 534,413

Budget

2021 Revised

237,704 159,403 920 398,027

2022 Budget

684,809 306,825 500 992,134

% Change

71% 129.84% 85.65%

The Human Resources department oversees employment operation of the City in an effort to maximize both individual needs and organization objectives. The department is responsible for the recruitment and screening of the City’s employment applicants, pay plan administration, payroll and benefits management, employee relations, and employee training and development. The HR department budget includes a full year with a new department director. This budget also includes executive searches for a Police Chief and City Manager, a compensation study, and funds to implement the results of the compensation study.

INFORMATION TECHNOLOGY 1829 Salary & Benefits Services & Supplies Maintenance & Repair Information Technology Miscellaneous Information Technology

History 2020 Actual

512,350 231,259 117,647 577,953 5,475 1,444,684

Projected 2021 Budget

606,692 234,727 110,250 626,709 21,900 1,600,278

2021 Revised

485,140 244,460 145,250 784,738 24,454 1,684,042

Budget 2022 Budget

678,857 54,650 10,000 1,049,296 1,792,803

% Change

11.89% -76.72% -90.93% 67.43% -100.00% 12.03%

The Information Technology department maintains the City’s computer networks and systems by evaluating the end user needs, providing technical support and maintaining standards and uniformity in hardware and software installation. The department works closely with outside vendors to maintain several specialty computer programs required by various city departments. This budget includes two new positions, as well as the costs associated with equipping thirty-six new employees.

Fiscal Year 2022 Proposed Budget

RESTRICTED GOVERNMENTAL FUNDS

Fiscal Year 2022 Proposed Budget

The Operating Reserve Fund is money that has been set aside in case of a catastrophic or emergency event. The required amount is calculated in each year’s budget process and transfers are established based on only the regular operating expense, meaning that all major non-recurring purchases are not included in the calculation. The goal is to have approximately three months operating costs in reserve so the City would be able to maintain uninterrupted service for at least that amount of time. For the past few years, audited figures show that the balances in Fund 07, when combined with reserves in other areas, offer reserves that considerably exceed the 25% preference. Transfers to the operating reserves have been suspended in order to allow for funding of capital projects and purchases, while still maintaining strong reserves.

GENERAL FUND OPERATING RESERVE History Beginning Fund Balance Revenue Interest Income Transfers In General Fund

Total Revenue Fund Balance Ending Fund Balance

Fiscal Year 2022 Proposed Budget

Projected

Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change

4,394,669

4,913,065

4,913,165

4,913,715

0.01%

5,900

4,500

550

512,596 512,596

518,496

4,500

550

4,913,165

4,917,565

4,913,715

-0.08%

4,913,165

4,917,565

4,913,715

-0.08%

-100.00%

The Police Special Services Fund collects revenues from the seized and forfeited funds awarded to the City by the court, and by the sale of seized vehicles awarded to the City. These funds can be spent on equipment and training for the Police Department. The fund also receives an annual payment from LEOSE, Law Enforcement Officer Standards and Education, which can only be used for education and training for the Police Department.

POLICE SPECIAL SERVICES FUND

Beginning Fund Balance Revenue Miscellaneous Income Transfers In General Fund

Total Revenue Expenditures Education & Training Miscellaneous

Fund Balance Transfers Out General Fund Capital Purchases Fund

Ending Fund Balance

Fiscal Year 2022 Proposed Budget

Budget

Projected

History 2020 Actual

32,756

2021 Budget 2021 Revised 2022 Budget % Change

35,406

23,867

31,867

4,670 4,670

4,670

19,000

713

1,500 9,500 11,000

5,000 5,000

713

19,000 19,000 -

-10.00%

36,713

35,406

31,867

26,867

12,846 12,846

23,867

35,406

31,867

26,867

-24.12% -24.12%

Hotel Occupancy Tax is revenue collected from hotels and motels located within the Forney city limits. The amount paid to the city is set by ordinance at 7% of the room rate charged by the hotel or motel, excluding all other services provided (meals, laundry, etc.). These funds may be used for both advertising and operational expenditures, as long as the primary purpose of the event is to attract out of town visitors. While the majority of the City’s funds have been largely unaffected by the COVID-19 pandemic, the Hotel Occupancy Tax Fund has seen a significant reduction in revenue. No expenditures or distributions are proposed for the upcoming year as this tax revenue remains unstable.

HOTEL OCCUPANCY TAX FUND Projected

History

Beginning Fund Balance Revenue Tax Revenue Unused HOT Allotment Interest Income Transfers In General Fund Special Events Fund

Total Revenue Expenditures Sharing the Love Foundation

Fund Balance Transfers Out Special Events Fund Christmas in the Park Summer Concert Series Major Concerts Forney on Ice Brews On Bois D 'Arc NYE Ball Drop Ending Fund Balance

Fiscal Year 2022 Proposed Budget

2020 Actual

57,988

122,897 13,833 136,730 136,730

3,500 3,500 191,218 191,218

2021 Budget

(8,579)

125,000 125,000 125,000

116,421

Budget

2021 Revised

50,000 50,000 50,000

50,000

2022 Budget

50,000

75,000 75,000 75,000

125,000

116,421

50,000

125,000

% Change

-682.82% -40.00% -40.00% -40.00%

7.37% 7.37%

The Capital Purchases Fund provides for General Fund capital purchases and is primarily funded by a transfer of unrestricted fund balance. The city defines capital purchases as any equipment (including software) with a price that exceeds $5,000 and has a useful life of over 3 years. This fund also simplifies the tracking of fixed assets for city staff and auditors and allows for a quick reference for annual capital purchase spending.

CAPITAL PURCHASES FUND History Beginning Fund Balance Revenue Interest Income Sale of Assets Insurance Reimbursements Transfers In General Fund Total Revenue Expenditures Engineering Police Fire Parks & Recreation Streets Neighborhood Services Facilities Maintenance Information Technology

Fund Balance Transfers Out Debt Service

Committed Fund Balance Ending Fund Balance

Fiscal Year 2022 Proposed Budget

2020 Actual

87,492

Budget

Budget 2021 Budget

150,218

2021 Revised

327,795

2022 Budget

6,034

% Change

-95.98%

17,607 22,468 14,838 54,912

1,500 1,500

500 500

547,500 547,500

600,000 600,000

2,000,000 2,000,000

233% 233%

602,412

600,000

601,500

2,000,500

233%

142,270 108,614 28,664 12,136 6,727 12,591 311,002

51,108 51,108

425,052 187,335 60,608 101,000 133,350 15,917 923,262

466,153 226,219 51,108 30,500 90,000 195,000 1,058,980

1972%

378,903

699,110

6,034

947,554

36%

51,108 51,108

327,795

699,110

6,034

500,000 447,554

-36%

FISCAL YEAR 2021 - $923,262 The Fiscal Year 2021 budget included a transfer of $600,000 with no specific purchases identified. This was done in an abundance of caution as COVID created several unknowns and potentially negative impacts to 2021 revenues. As the year progressed it became obvious that our community was fortunate to not experience the same revenue losses as others and some spending was allowed. October – The Police department received grant funding for forty body cameras. This included the purchase of a server by the Information Technology department. December – Council allowed distribution of $85,000 worth of available fund balance for the newly established Grounds Crew. This equipment was redistributed when the Grounds Crew was reclassified. The Facilities Maintenance department also purchased a work van to replace a 2007 pick up truck being used by the Facilities Maintenance Coordinator. The Fire department completed the purchase of a new EMS vehicle that was approved in 2020 and upgraded some SCBA equipment based on potential CARES grant funding. The Capital Purchases fund accounts for monthly payments for the purchase of the Pinson Farm property. Payments total $51,108 annually and are included in the annual transfer from the General Fund. Parks will also purchase a mower in 2021. In July, the City Council voted to allow the purchase of nearly $600,000 worth of equipment from the funds that were set aside with no specific purpose during the Fiscal Year 2021 budget process. These purchases include: POLICE -$348,247 • Tasers (CEW) Conducted Electrical Weapon • Ballistic Helmets • Communication Earpieces • Patrol Vehicle • Night Vision Safety Equipment FIRE - $83,750 • Faro Handheld Scanner • LP15 Cardiac Monitor/Defibrillator • LUCAS3 Mechanical Chest Compression System STREETS - $101,000 • Two Sand Spreaders • 3 Ton Asphalt Roller • Flashing School Zone Signs

Fiscal Year 2022 Proposed Budget

FISCAL YEAR 2022 - $1,507,653 The following items are proposed for purchase in Fiscal Year 2022: POLICE • LENCO Bearcat - $286,153 o This is an armored vehicle for SWAT use. • Two Replacement Patrol Vehicles - $180,000 FIRE • •

Replace Medic 2 Vehicle - $95,000 Replace Brush 1 Truck - $131,000

The total transfer from the General Fund for Fiscal Year 2022 is proposed at $2,000,000. This transfer will cover all of the requested purchases, allow for $500,000 to be committed for the future purchase of a Fire Engine and leave nearly $450,000 in fund balance available for unforeseen or future needs.

Fiscal Year 2022 Proposed Budget

Impact Fees are charges of assessments paid by new development in order to generate revenue for funding or recouping the costs of capital improvements necessitated by and attributable to the new development. These revenues may not be used for any type of repair, maintenance, modernization, or expansion of existing infrastructure to better serve existing development.

ROADWAY IMPACT FUND

History

Beginning Fund Balance Revenue Roadway Impact Fees Interest Income

Total Revenue Expenditures Impact Fee Study Impact Fee Rebate

Fund Balance Transfers Out Capital Improvement Fund Ending Fund Balance

Fiscal Year 2022 Proposed Budget

Projected

2020 Actual

2021 Budget

1,641,975 17,578 1,659,553

1,302,366

2,910,366

Budget

2021 Revised 2022 Budget

% Change

2,961,595

4,549,874

4470.86%

1,600,000 18,000 1,618,000

1,700,000 1,000 1,701,000

850,000 850,000

-26.80% -100.00% -29.33%

1,659,553

1,618,000

1,701,000

850,000

-29.33%

324 324

30,000 30,000

2,961,595

4,498,366

4,632,595

5,399,874

82,721

2,961,595

4,498,366

4,549,874

5,399,874

314.62% 314.62%

The Municipal Court Building Security Fund revenues are collected from a $3.00 fee charged to any defendant convicted of a misdemeanor offense in Municipal Court. Money deposited into the Building Security Fund is restricted to use for security personnel, services, and items related to the security of court facilities. Specifically: ► The purchase or repair of x-ray machines as conveying systems ► Handheld metal detectors ► Walkthrough metal detectors ► Identification cards and systems ► Electronic locking and surveillance equipment ► Bailiffs, deputy sheriffs, deputy constables, or contract security personnel during times when they are providing appropriate security services ► Signage ► Confiscated weapon inventory and tracking systems ► Locks, chains, alarms or similar security devices ► The purchase or repairs of bullet proof glass ► Continuing education on security issues for court personnel and security personnel

BUILDING SECURITY FUND Projected

History 2020 Actual

Budget

2021 Budget 2021 Revised 2022 Budget % Change

Beginning Fund Balance Revenue Building Security Fines Interest Income

8,122

9,522

10,649

11,849

-18.15%

4,927 4,927

3,800 3,800

4,800 4,800

1.50% 1.50%

Total Revenue

4,927

3,800

4,800

1.50%

Expenditures Miscellaneous

-100%

13,049

13,322

15,449

16,649

58.23%

2,400

3,600

50.00%

10,649

10,922

11,849

13,049

60.66%

Fund Balance Transfers Out General Fund Ending Fund Balance

Fiscal Year 2022 Proposed Budget

The Municipal Court Technology Fund revenues are collected from a $4.00 fee charged to any defendant convicted of a misdemeanor offense in a municipal court. Money deposited into the Technology Fund is restricted to the purchase or maintenance of the following: ► ► ► ► ► ► ► ►

Computer Systems Computer Networks Computer Hardware Computer Software Imaging Systems Electronic Kiosks Electronic Ticket Writers Docket Management Systems

TECHNOLOGY FUND Projected

History Beginning Fund Balance Revenues Technology Fines Interest Income Transfers In General Fund Total Revenue

Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change

6,975

4,269

5,467

9,467 133.46%

4,799

3,600 3,600

4,000 4,000

4,799

3,600

4,000

Expenses Miscellaneous Expense

6,306

Fund Balance

5,467

7,869

9,467

5,467

7,869

9,467

Transfers Out General Fund Capital Improvement Projects

Ending Fund Balance Fiscal Year 2022 Proposed Budget

-36.56% -36.56%

4,000 13,467

13,467

-36.56%

-100.00% 93.09%

93.09% 80

The Municipal Court Juvenile Case Manager Fund receives revenue from a $5.00 fee charged to any defendant convicted of a fine-only misdemeanor offense. This fund may only be used to finance the salary and benefits of a Juvenile Case Manager. The Juvenile Case Manager role is filled by one of the Deputy Court Clerks and a transfer equal to 50% of her salary and benefits is normally made to the General Fund to offset costs associated with that role. Due to the slow in revenue collections during Fiscal Year 2021, there will be no transfer made during Fiscal Year 2022.

JUVENILE CASE MANAGER FUND History

Projected

Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change

Beginning Fund Balance Revenue Juvenile Case Manager Fines Truancy Prevention Fund Transfers In General Fund Total Revenue

53,150

29,962

31,750

37,150

-37.42%

2,501 3,987 6,488

2,700 1,500 4,200

800 4,600 5,400

-89.85% 198.78% -42.68%

6,488

4,200

5,400

Expenses Miscellaneous Expense

Fund Balance

59,638

34,162

37,150

Transfers Out General Fund

27,888

31,750

34,162

37,150

Ending Fund Balance

Fiscal Year 2022 Proposed Budget

5,400

42,550 42,550

-42.68%

-38.14% -100.00% -19.94%

The Special Events Fund provides for the tracking of revenues and expenses related to the City’s Special Events Program. In Fiscal Year 2022, the Special Events Program will be returned to the Parks & Recreation department and will be reevaluated to determine which events are most valuable to the community and what, if any, new events might be developed. It is possible that COVID will continue to impact the ability of the City to hold events and/or the public’s desire to attend. As most events for 2021 were cancelled, a significant fund balance will roll forward to 2022. The only additional funds to be transferred from the General Fund will cover the City’s contract for management of concerts at the Spellman Amphitheater.

SPECIAL EVENTS FUND History 2020 Actual

Beginning Fund Balance Revenue Forney on Ice Christmas in the Park Independence Day Brews on Bois D'Arc NYE Ball Drop JAC Managed Concerts Festival on Main Transfers In General Fund Total Revenue Expenses Forney on Ice Christmas in the Park Independence Day Event Spellman Concert Series Veteran's Day Movies in the Park Trail of Treats Brews on Bois D'Arc NYE Ball Drop JAC Managed Concerts Festival on Main

Ending Fund Balance

Fiscal Year 2022 Proposed Budget

Projected 2021 Budget

Budget

2021 Revised

2022 Budget

74,833

154,800

225,580

64,271 10,425 900 6,500 400 82,496

7,500 3,400 300 6,500 96,000 1,500 115,200

430,656 430,656

259,700 259,700

190,000 190,000

-26.84% -26.84%

513,152

374,900

259,700

190,000

-49.32%

116,610 18,011 39,385 11,135 1,569 391 10,078 3,103 16,359 142,506 3,257 362,404

46,500 40,000 65,500 17,200 4,800 9,150 9,550 23,000 27,700 190,000 15,000 448,400

10,000 30,000 9,150 9,550 190,000 2,070 250,770

40,000 65,500 9,150 10,000 190,000 314,650

-100.00% -100.00% -100.00% 4.71% -100.00% -100.00% -100.00% -29.83%

225,580

81,300

234,510

109,860

35.13%

234,510

% Change

51.49% -100.00% -100.00% -100.00% -100.00% -100.00% -100.00% -100.00%

In 2004, The City Council approved the creation of the Fox Hollow Public Improvement District No. 1 (PID) to finance the maintenance, repair, and improvement of public improvements within the boundaries of the PID. All properties will be assessed at a uniform rate. The assessment rate for 2022 is proposed at 0.12 per $100 of appraised value.

FOX HOLLOW MAINTENANCE PID

Beginning Fund Balance Revenues Property Tax Income Delinquent Property Tax Interest Income

Total Revenue Expenditures Advertising Professional Services Kaufman County Appraisal District Utilities Property Tax Collection Fees

Fund Balance Transfers Out Capital Improvement Fund

Ending Fund Balance

Fiscal Year 2022 Proposed Budget

Budget

History

2020 Actual

281,352

2021 Budget 2021 Revised 2022 Budget

% Change

369,599

574,882

274,323 533 2,177 277,033

286,452 286,452

287,129 8,134 124 295,387

335,630

17.17%

335,630

17.17%

277,033

286,452

295,387

335,630

17.17%

95 152,852 2,949 31,603 1,287 188,786

500 218,500 3,000 16,000 2,000 240,000

64,791 2,266 21,748 1,299 90,104

500 311,130 2,500 20,000 1,500 335,630

42.39% -16.67% 25.00% -25.00% 39.85%

369,599

416,051

574,882

38.18% -

369,599

416,051

574,882

38.18%

574,882

55.54%

UTILITY FUND

Fiscal Year 2022 Proposed Budget

The Utility Fund is an enterprise fund that accounts for the water, sewer, and refuse services that are provided to the City’s residents. All activities to maintain these services are accounted for in this fund, including but not limited to: operations, maintenance, billing and collections, administration and financing.

UTILITY FUND STATEMENT History 2020 Actual

Beginning Fund Balance Revenues Operating Revenue Transfers In General Fund Utility Capital Improvements Fund

Total Revenue Expenditures Operating Expenses Capital Outlay Transfer of Assets from CIP Total Expenditures Fund Balance Transfers Out Operating Transfer Out Debt Service Transfer Out Utility Operating Reserve Interceptor Transfer Out Capital Improvement Projects

Ending Fund Balance

Fiscal Year 2022 Proposed Budget

Projected 2021 Budget

Budget 2022 Budget

2021 Revised

% Change

4,648,974

3,312,656

5,811,318

5,454,032

64.64%

18,674,436

19,251,733

21,795,974

22,937,490

19.15%

5,092,907 5,092,907

23,767,343

19,251,733

21,795,974

22,937,490

19.15%

14,910,777 288,789 4,717,825 19,917,391

17,104,626 17,104,626

17,136,262 17,136,262

19,686,527 609,000 20,295,527

15.09% -

8,498,926

5,459,763

10,471,030

8,095,995

48.28%

1,750,243 544,630 392,735 2,687,608

1,785,880 338,316 1,500,000 3,624,196

1,785,880 338,316 246,665 2,646,138 5,016,999

1,270,329 121,658 929,856 4,774,152 7,095,995

-28.87% -64.04% 0.00% 0.00% 218.28% 95.80%

5,811,318

1,835,567

5,454,032

1,000,000

-45.52%

18.66%

UTILITY FUND REVENUE Sales revenue makes up 99% of the Utility Fund’s revenue. Sales revenue is comprised of sewer collection and treatment fees, charges for in-city water, wholesale water sales, all other water and sewer related fees, and refuse and recycling fees. The interest and penalty category makes up the majority of the remaining 1% and is comprised of penalties charged on utility accounts and interest collected on funds held in checking accounts and investments.

REVENUE SUMMARY Sales Revenue Interest & Penalty Miscellaneous Transfers In Utility Revenue

Projected

History 2020 Actual

18,504,931 157,441 12,066 18,674,438

2021 Budget

19,075,733 169,500 6,500 19,251,733

Budget

2021 Revised

21,603,873 185,600 6,500 21,795,973

2022 Budget

22,775,390 155,600 6,500 22,937,490

% Change

19.39% -8.20% 19.15%

UTILITY RATES The Fiscal Year 2022 Budget includes no increase in the water, sewer, or garbage utility rates. 2019 Average Residential Bill 6,200 gallons

Water Usage Sewer Average Sewer Service Charge Garbage Sales Tax

2020 40.11 38.86 16.00 12.14 1.01 108.12

40.11 42.75 16.00 12.75 1.06 112.67

4.79 57.45

5.12 61.50

4.55 54.60

2019 Senior Citizen Account* 6,200 gallons

Average Use Increase Monthly Annual

2022

39.15 35.32 16.00 11.57 0.96 103.00

Average Use Increase Monthly Annual

Water Usage Sewer Average Sewer Service Charge Garbage Sales Tax

2021

2020

2021

2022

30.47 32.45 16.00 10.46 0.86 90.24

32.77 35.69 16.00 10.98 0.90 96.35

32.77 39.26 16.00 11.53 0.95 100.51

4.72 56.61

6.11 73.30

4.16 49.96

The majority of our senior citizen accounts do not exceed the initial 2,000 gallons. The comparsion above uses the average number of gallons for a single family residence.

Fiscal Year 2022 Proposed Budget

REVENUE DETAIL Sales Revenue - $22,775,390 SALES REVENUE 40201 Sewer PreTreatment 40225 Sewer Pro Rata Fees 40228 Industrial Sewer Sales 40229 Sewer Sales 40230 Wholesale Sewer Sales 40231 Sewer Discharge Sales 40232 BackFlow Testing Revenue 40245 Industrial Water Sales 40246 Water Sales 40247 Wholesale Water Sales 40248 Water Rebate 40249 Reclaimed Water Sales 40251 Meter Sales 40261 Transfer Fees 40262 Connection Fees 40263 Fire Hydrant Meter Rental Fee 40264 Sewer Connection Fee 40265 Payment Processing Fee 40284 Refuse & Recycling Sales Revenue

History 2020 Actual

50,735 1,054 724,145 3,855,842 269,740 67,714 2,410 1,177,711 4,612,643 4,758,137 19,614 1,720,141 83,425 720 31,300 14,500 162,840 952,260 18,504,931

Projected 2021 Budget

50,735 1,200 753,089 4,089,665 410,289 55,000 8,000 1,125,845 4,366,331 5,486,179 1,500,000 65,000 900 25,000 12,000 88,500 85,000 953,000 19,075,733

Budget

2021 Revised

40,564 4,000 840,000 4,478,002 738,238 55,000 1,125,845 4,835,000 5,567,404 419,920 1,700,000 175,000 900 32,000 12,000 450,000 155,000 975,000 21,603,873

2022 Budget

44,451 1,200 1,439,755 4,975,060 796,209 55,000 1,195,000 5,175,000 5,884,815 1,700,000 100,000 900 31,000 12,000 250,000 120,000 995,000 22,775,390

% Change

-12.39% 91.18% 21.65% 94.06% -100.00% 6.14% 18.52% 7.27% 13.33% 53.85% 24.00% 182.49% 41.18% 4.41% 19.39%

Sewer Pre-Treatment - $44,451 The North Texas Municipal Water District provides sewer pre-treatment services for industrial use. The budget is provided to the City by the North Texas Municipal Water District. Estimates are based on actual volumes being treated from the period from August to July of the preceding year. The City is billed for this service and the expense is booked to the Utility Billing department. The expense is then passed on to Smurfit Kappa and Luminant Energy and booked to this revenue account. Sewer Pro-Rata Fees - $1,200 The Sewer Pro Rata charge is made against the customer, developer or property owner to pay for the installation of sanitary sewer mains. The current budget is based on average collections in the current and previous years, this amount has been trending down and has been decreased for the upcoming year.

Industrial Sewer Sales - $1,439,755 Industrial Sewer accounts for only two users: Smurfit Kappa and Luminant Energy. Smurfit Kappa pays for sewer under the terms of an industrial sewer agreement that allows for the company to pay the city at cost for every gallon that flows through the sewer system with an annual fixed profit margin. The agreement states that the cost per 1,000 will increase when the city’s costs are increased and that the agreed upon profit margin will be based on the calendar year. Smurfit’s cost per 1,000 gallons will increase by 48% in October, and the fixed Fiscal Year 2022 Proposed Budget

profit margin will increase by 3% in January. Fiscal Year 2022 is the final year of the existing agreement. Luminant Energy pays for sewer based on regular commercial rates and will receive no increase for Fiscal Year 2022. The significant increase shown in industrial sewer is not directly related to increased industrial sewer flow. The revenue received for industrial sewer is split and booked into two funds to cover both treatment and transmission costs. During Fiscal Year 2021, the Utility Billing software was upgraded. Unfortunately, the new software will no longer automatically book this revenue into two separate funds. Going forward, 100% of the revenue will be booked into the Utility Fund and there will be an annual budget transfer to the Interceptor Fund.

Sewer Sales - $4,975,060 The City’s sanitary sewer is delivered to the North Texas Municipal Water District for treatment via the interceptor systems. Residential and senior monthly charges are calculated using the average water usage of the three months with the lowest usage during the four-month period of November through February. Commercial sewer is calculated using the same base rate and tiered scale as residential, but is based on actual month to month water usage.

BUDGETING FOR UTILITY REVENUES With regard to both sewer sales and water sales, it should be noted that staff uses a conservative approach in preparing the revenue estimates. Both revenue categories are based on customer usage and are directly impacted by weather conditions in a region where the conditions can rapidly go from drought to flood and back again. These variables can make determining estimates for year end and upcoming years challenging. Timing presents an additional challenge. Budgets are finalized during the final three months of the fiscal year, and those same months record the highest levels of revenue in the Utility Fund.

With the substantial growth that has continued into and throughout Fiscal Year 2021, it is anticipated that sewer revenues will see an increase from the addition of new connections. A conservative estimate of 10% is included to account for this growth.

Fiscal Year 2022 Proposed Budget

It must be taken into account that while this growth increases revenues, it also increases costs. More connections to the City’s sewer system increase the rate of flow, which impacts the immediate cost of moving wastewater. There is also a more costly effect in that more connections also lead to a long term need for more sewer capacity and this requires that infrastructure be expanded and upgraded. Many of the areas currently experiencing rapid development are on the City’s sewer system, but purchase water from one of the three utility districts that overlap the city limits. These connections have an additional cost increase as the utility districts charge the city an administration fee for billing city sewer on their water bills. Wholesale Sewer Sales - $796,209 The City provides wholesale sewer services to two housing developments located within the ETJ: Devonshire and Vintage Meadows/Lakewood Trails. These sewer contracts are structured similar to the city’s agreements with the Water Districts. The Sewer Districts are responsible for a minimum annual amount based on actual usage from previous years, with a possible adjustment at the conclusion of the year. While wholesale sewer revenue is increasing as these areas develop, a large portion of this increase is similar to the one seen with Industrial Sewer Sales. A change in the Utility Billing software has resulted in the need to book all of the revenue into the Utility Fund and transfer a portion to the Interceptor Fund to cover the debt on transmission lines. Sewer Discharge Sales - $55,000 Luminant Energy uses water to produce electricity and the water is metered, discharged, and then treated. The City is paid per gallon for the additional expense resulting from treating this water.

Industrial Water Sales - $1,195,000 Industrial Water, like Industrial Sewer, currently only has two users: Smurfit Kappa and Luminant Energy. The terms of Smurfit Kappa’s water agreement are the same as the sewer agreement. The company pays for water flow at the same rate as the city pays the North Texas Municipal Water District per gallon. There is also an agreed upon annual fixed profit margin. Smurfit Kappa’s rate per 1,000 gallons for water will not increase in October, and the fixed profit Fiscal Year 2022 Proposed Budget

margin will increase by 3% in January. Fiscal Year 2022 is the final year of the current agreement. Luminant Energy relies heavily on reclaimed water, and their total potable water consumption is relatively low. Their water is billed at the regular commercial rate and will not increase for the 2022 Fiscal Year. Water Sales – $5,175,000 This

represents water sales generated from approximately 6,700 residential and just over 400 commercial water customers inside the city limits. The amount charged for water service is a base rate plus a tiered scale for any usage over 2,000 gallons. The City’s water is purchased from the North Texas Municipal Water District (NTMWD) for resale to our customers.

No increase in water rates is budgeted for Fiscal Year 2022. The North Texas Municipal Water District will not be increasing their water rates for the upcoming fiscal year.

Water District Water Sales - $5,884,815 The City contracts with four water districts for the provision of water on a take or pay basis. This allows the City to plan for a minimum revenue stream on which it can rely to purchase the supply for such contracts. Contracts are based on a water consumption period that runs from August to July. This allows the city to bill adjustments for any overages, and notify the water districts of rates for the upcoming year prior to the fiscal year end. The revenue budgeted for the next fiscal year is the minimum amount the contract will produce and is determined on a formula basis contained in the contracts. On average, the water districts account for approximately 50% of the City’s take-or-pay contract minimum with the North Texas Municipal Water District.

Fiscal Year 2022 Proposed Budget

Reclaimed Water Sales - $1,700,000 The City purchases reclaimed water from the City of Garland and in turn sells it to Luminant Energy at a mark-up of $0.10 per 1,000 gallons. This type of water cannot be utilized as a potable source but is an excellent alternative for this type of industrial application. The arrangement is a straight-forward demand purchase, meaning that less demand from our end user results in less reclaimed water purchased from the City of Garland. Meter Sales - $100,000 This fee is charged for each new meter set connecting to the City’s water system and is based on the size of the meter being purchased. Transfer Fees - $900 This fee is charged for transferring existing utility services from one location within the city limits to another. Connection Fees - $31,000 The connection fee is a charge of $25.00 applied to each new service. Fire Hydrant Meter Rental Fee - $12,000 This fee is retained by the city when a contractor returns a fire hydrant meter used on a construction project within the city limits. Sewer Connection Fee - $250,000 The City added a sewer connection fee in Fiscal Year 2021. This fee is charged as part of a development agreement and will replace sewer impact fees for a single development within the ETJ. Payment Processing Fee - $120,000 The City added a payment processing fee in Fiscal Year 2021. Credit card companies charge an average of 3% per transaction to process credit card payments and the city has absorbed these fees for a number of years. Refuse and Recycling Sales - $995,000 The City contracts refuse and recycling collection with Community Waste Disposal (CWD) for residential and senior utility customers. Commercial services are not provided by the City and must be contracted directly with CWD. The current garbage contract expires in February of 2026. Interest & Penalty - $155,600 INTEREST & PENALTY 40805 Interest Income 40806 Penalty Income Interest & Penalty Fiscal Year 2022 Proposed Budget

History 2020 Actual

4,288 153,153 157,441

Projected 2021 Budget

4,500 165,000 169,500

Budget

2021 Revised

600 185,000 185,600

2022 Budget

600 155,000 155,600

% Change

-86.67% -6.06% -8.20% 91

Interest Income -$600 Interest revenues have decreased steadily since 2020. The Federal Reserve made two emergency rate cuts in March 2020 in response to the coronavirus pandemic, moving the federal funds rate to a target range of 0-0.25 percent. Penalty Income - $155,000 Penalties are charged for late payments and disconnection of services including late fees, administrative fees and returned check, and after-hours fees.

Miscellaneous Income - $6,500 Projected

History

MISCELLANEOUS

2020 Actual

40900 Miscellaneous 40911 Sale of Assets 40917 Insurance Reimbursements Miscellaneous

3,956 30 8,080 12,066

2021 Budget

Budget

2021 Revised

6,500 6,500

2022 Budget

% Change

6,500

UTILITY FUND EXPENSES The Utility Fund accounts for expenses associated with maintenance and repair of a water distribution system that includes 134 miles of water lines and associated pump stations and water storage tanks, a sewer collection system that includes 130 miles of sanitary sewer line and associated sewer lift stations, salary and benefits of twenty employees, and the purchase of water, and sewer collection and treatment services from the North Texas Municipal Water District (NTMWD). Expense by Category

Salary & Benefits Services & Supplies Maintenance & Repair Capital Outlay Miscellaneous Utility Expenses

History 2020 Actual

976,413 1,324,773 11,862,068 288,789 747,523 15,199,566

Projected 2021 Budget

1,360,820 1,344,607 14,348,699 50,000 17,104,126

2021 Revised

1,259,345 1,428,218 14,448,699 17,136,262

Budget 2022 Budget

2,857,749 1,529,629 15,249,149 609,000 50,000 20,295,527

% Change

110.00% 13.76% 6.28% 18.66%

Salary & Benefits expense in the Fiscal Year 2022 budget will increase by 110%. All of the fulltime equivalents in the Public Works Division have been reallocated to the Public Works Administration department regardless of department or fund. Relocating all of the Public Works employees to the Public Works Administration department will simplify processes for Human Resources, Finance, and Public Works. Due to the nature of the services provided by these departments, frequent turnover is not unusual. It is also not unusual for employees in one department to apply for positions in other departments within Fiscal Year 2022 Proposed Budget

the division in order to advance in their careers or to vary their experience. The departments and individual positions also often overlap or provide assistance to departments outside of their originally assigned roles. Accounting for all of the Public Works positions will decrease the paperwork and processes required of HR and Finance and should eliminate most of the issues brought up as employees move between departments. Operating transfers will continue to include appropriate percentages for each position and will offset work done in the Utility Fund on behalf of General Fund activities. The Public Works Administration department will also add ten new positions in Fiscal Year 2022. In addition to salary and benefits, many of the expenses associated with employees (education, uniforms, supplies, etc.) were also reallocated to the administration department or increased to cover the additional personnel.

Projected

History

Expense by Department

2020 Actual

Utility Billing Public Works Administration Water Sewer Utility Expenses

12,947,945 115,853 1,629,705 506,064 15,199,568

2021 Budget

15,463,792 274,177 807,918 558,239 17,104,126

2021 Revised

15,631,510 211,858 742,650 550,244 17,136,262

Budget 2022 Budget

16,325,293 2,586,034 700,900 683,300 20,295,527

% Change

5.57% 843.20% -13.25% 22.40% 18.66%

UTILITY OPERATING TRANSFER Each year the city budgets a transfer from the Utility Fund to the General Fund to offset expenses paid on behalf of the Utility Fund. Salary & Benefits Finance Legal Services Facilities & Fleet

Fiscal Year 2022 984,575 22,305 37,500 60,000

Fiscal Year 2021 1,265,198 13,750 275,000 60,000

159,392 6,557 1,270,329

159,392 12,540 1,785,880

Technology Human Resources

Salary & Benefits – This portion of the transfer decreased as a result of moving the Street, Facilities, and Fleet employees from the General Fund to the Utility Fund.

Finance - 25% of the costs of the city’s annual audit and 25% of other professional services utilized by the Finance department for continuing disclosure and arbitrage. Facilities & Fleet – For Fiscal Year 2022, this will be a flat $60,000. This portion of the transfer will be re-evaluated for 2023 when more history is established for these newer departments. Legal Services - $37,500 will be transferred to cover legal expenses on behalf of the Utility Fund. The signicant decrease in this portion of the tranfer is expected as the PUC cases are resolved. In the event that any major expenditures develop, the transfer will be adjusted at year end.

Fiscal Year 2022 Proposed Budget

Information Technology – These are costs associated with hardware and software used by or on behalf of the Utility Fund. Human Resources – 15% of payroll processing costs, the city’s benefits broker, and EMS Service Benefit.

UTILITY FUND DEPARTMENT SUMMARIES

UTILITY BILLING 1122 Salary & Benefits Services & Supplies Maintenance & Repair Capital Outlay Information Technology Miscellaneous Utility Billing

History 2020 Actual

326,345 1,013,716 11,607,481 403 12,947,945

Projected 2021 Budget

348,619 985,774 14,079,399 50,000 15,463,792

2021 Revised

357,725 1,094,386 14,179,399 15,631,510

Budget 2022 Budget

366,015 1,129,729 14,779,549 50,000 16,325,293

% Change

4.99% 14.60% 4.97% 5.57%

The Utility Billing department is responsible for the billing and collection of fees for water, sewer, and refuse service. The department establishes new accounts, installs new meters, reads meters, maintains utility account records, collects payments, and addresses billing inquiries. This department accounts for all of the expenses associated with the purchase of water and sewer treatment and transmission services from the North Texas Municipal Water District (NTMWD). The cost of purchasing water for Fiscal Year 2022 will increase by 12.5%. The NTMWD will not be increasing the rate per 1,000 gallons. However, the City has exceeded the 2021 contract minimum of 2,318,622,000 by 254,228,000 gallons. This will result in an annual adjustment of approximately $125,000 for Fiscal Year 2021. The new contract minimum of 2,572,850,000 gallons for 2022 will result in annual charges of $7,692,822. The cost of sewer services is split between the Utility Fund and the Interceptor Fund. Maintenance and operation of the interceptors is charged to the Utility Fund and the debt owed for construction of the Fiscal Year 2022 Proposed Budget

2021 Budget 29,563 455,112 518,060 4,288,141 300,843 5,591,719

2021 Revised 29,563 455,112 518,060 4,288,141 300,843 5,591,719

2022 Budget 41,854 125,994 562,200 4,245,527 348,376 5,323,951

Revised vs 2021 42% -72% 8% -0.99% 81% -4.79%

Regular residential and commercial sewer customers of the City will see no increase in their sewer rates in Fiscal Year 2022. Wholesale and Industrial Sewer customers will see increases based on the terms of their individual contracts.

PUBLIC WORKS ADMINISTRATION 1511 Salary & Benefits Services & Supplies Maintenance & Repair Public Works Administration

History 2020 Actual

87,435 24,845 3,573 115,853

Projected 2021 Budget

241,563 30,414 2,200 274,177

Budget

2021 Revised

177,057 32,601 2,200 211,858

2022 Budget

2,491,734 90,300 4,000 2,586,034

% Change

931.50% 196.90% 81.82% 843.20%

The Public Works Administration department is responsible for the coordination, management, and oversight of water, sewer and streets maintenance. The department also provides coordination with all public works construction activities. During Fiscal Year 2021, the Facilities Maintenance and Fleet departments were added to the Public Works Division. The significant increase in expenses in this department is offset by decreases in the other Public Works Division departments. All Public Works personnel costs were reclassified to this department for the upcoming Fiscal Year.

WATER 1512 Salary & Benefits Services & Supplies Maintenance & Repair Capital Outlay Water Fiscal Year 2022 Proposed Budget

History 2020 Actual

274,910 239,500 115,391 252,783 1,629,705

Projected 2021 Budget

402,215 286,103 119,600 807,918

Budget

2021 Revised

362,211 260,839 119,600 742,650

2022 Budget

274,300 209,600 217,000 700,900

% Change

-100.00% -4.13% 75.25% -13.25% 95

The Water department is responsible for the repair, maintenance, and rehabilitation of 134 miles of water lines within the water distribution system as well as the associated pump stations and water storage tanks. Maintenance & Repair costs are increasing as the Water department develops new maintenance plans for the city’s water system. The $217,000 worth of budgeted capital purchases include: • • • • •

Truck for new water crew Hydraulic Breaker Valve Exerciser Skid Steer Mini Excavator

SEWER 1513 Salary & Benefits Services & Supplies Maintenance & Repair Capital Outlay Sewer

History 2020 Actual

287,723 46,712 135,622 470,058

Projected 2021 Budget

368,423 42,316 147,500 558,239

Budget

2021 Revised

362,352 40,392 147,500 550,244

2022 Budget

35,300 256,000 392,000 683,300

% Change

-100.00% -16.58% 73.56% 22.40%

The Sewer department is responsible for the repair, maintenance, and rehabilitation of 130 miles of sewer line as well as the sewer lift stations within the sewer collection system. Maintenance & Repair costs are increasing as the Sewer department develops new maintenance plans for the city’s sewer system. The $392,000 worth of budgeted capital purchases include: • • • •

Truck for new sewer crew Two Trailers Sewer Jet Machine Medium Dump Truck (Replacement)

Fiscal Year 2022 Proposed Budget

RESTRICTED UTILITY FUNDS

Fiscal Year 2022 Proposed Budget

The Operating Reserve Fund is money that has been set aside in case of a catastrophic or emergency event. The required amount is calculated in each year’s budget process and transfers are established based on only the regular operating expense, meaning that all major non-recurring purchases are not included in the calculation. The goal is to have approximately three months operating costs in reserve allowing the City to maintain uninterrupted service for at least that amount of time. For the past few years, audited figures show that the balances in Fund 27, when combined with reserves in other areas, offer reserves that considerably exceed the 25% preference. Transfers to the operating reserves have been suspended in order to allow for funding of capital projects and purchases, while still maintaining strong reserves.

UTILITY OPERATING RESERVE Projected

History

Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change

Beginning Fund Balance Revenue Interest Income Transfers In Utility Fund Total Revenue Fund Balance Transfers Out Utility Fund Ending Fund Balance

Fiscal Year 2022 Proposed Budget

3,336,761

3,758,496

27,476

392,735

420,211

3,756,972 3,756,972

3,758,496 3,758,496

3,756,972

3,758,572

1,600

3,758,572

0.00%

0.00% 0.00%

Impact Fees are charges or assessments paid by new development in order to generate revenue for funding or recouping the cost of capital improvements necessitated by and attributable to the new development. These revenues may not be used for any type of repair, maintenance, modernization or expansion of existing infrastructure to serve existing development.

WATER IMPACT FUND History

Projected

Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change

Beginning Fund Balance Revenue Storage Impact Fees Pumpage Impact Fees Transmission Impact Fees Interest Income Transfers In Water Sewer CIP Total Revenue Expenses Impact Study Fund Balance Transfers Out Utility Capital Improvements Debt Service

Ending Fund Balance

Fiscal Year 2022 Proposed Budget

650,989

717,439

742,857

122,019 32,307 92,916 3,425 250,667

78,000 21,000 62,000 3,700 164,700

255,000 70,000 195,000 150 520,150

1,094,907

35.65%

125,000 2.25% 35,000 8.13% 95,000 2.05% - -100.00% 255,000 -0.32% -

250,667

164,700

520,150

255,000

4,550

12,000

897,107

870,139

1,251,007

1,349,907

154,250 154,250

156,100 156,100

742,857

714,039

1,094,907

-0.32% 27.00%

- -100.00% 157,313 3.52% 157,313 -61.81% 1,192,594

83.20%

SEWER IMPACT FUND

History Beginning Fund Balance Revenues Collection Impact Fees Lift Station Impact Fees Interest Income Transfers In Utility Capital Improvements Interceptor Fund

Projected

Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget

859,200

2,113,655

2,305,518

5,173,959

% Change

1,099,620 355,365 16,878 1,471,863

650,000 225,000 10,000 885,000

2,200,000 700,000 700 2,900,700

1,100,000 350,000 1,450,000

22.17% 20.62% -100.00% 17.83%

-100.00% 2.04%

-2.45%

Total Revenue Expenses Impact Study

1,471,863

885,000

2,900,700

1,450,000

5,450

12,000

Fund Balance

2,325,613

2,986,655

5,194,218

6,623,959

-1.50%

20,095 20,095

20,259 20,259

19,804 19,804

-100.00% -100.00% -0.53% -99.66%

2,305,518

2,966,396

5,173,959

6,604,155

668.64%

Transfers Out Interceptor Fund Utility Capital Improvements Debt Service

Ending Fund Balance

Fiscal Year 2022 Proposed Budget

100

Payments on the Interceptors are split between the Utility Fund and the Interceptor Funds. The Utility Fund pays the maintenance and operations costs and the Interceptor Fund pays the North Texas Municipal Water District for the debt issued to construct the interceptors. For Fiscal Year 2022, the interceptor payments will be split as follows: • Buffalo Creek Interceptor – 75% Interceptor Fund, 25% Utility Fund • Mustang Creek Interceptor – 82% Interceptor Fund, 17% Utility Fund • Forney Interceptor – 100% Utility Fund

INTERCEPTOR FUND History

Projected

2020 Actual

Beginning Fund Balance Revenues Sewer Service Charge Income Industrial Sewer Wholesale Sewer Contracts Interest Income

2021 Budget

Budget

2021 Revised

2022 Budget

% Change

74.53%

1,199,245

1,958,049

1,831,297

1,451,339

1,633,665 545,812 284,087 702 2,464,265

1,759,075 365,505 173,736 2,298,316

1,550,000 384,899 117,042 50 2,051,991

1,650,000 6.45% - -100.00% - -100.00% - -100.00% 1,650,000 -19.59%

246,665 246,665

929,856 929,856

276.97% -

2,464,265

2,298,316

2,298,656

2,579,856

12.23%

489,154

1,343,059 1,832,213

665,277 2,013,337 2,678,614

851,871 2,254,554 3,106,425

28.05% 11.98% 15.97%

1,831,297

1,577,751

1,451,339

924,770

-36.28%

Transfers Out Sewer Impact Fund

Ending Fund Balance

1,831,297

1,577,751

1,451,339

924,770

Transfers In Utility Fund Sewer Impact Fund

Total Revenue Expenditures Buffalo Creek Interceptor Buffalo Creek Parallel Interceptor Forney Interceptor Mustang Creek Interceptor

Fund Balance

Fiscal Year 2022 Proposed Budget

-36.28%

101

DEBT SERVICE FUNDS

Fiscal Year 2022 Proposed Budget

102

COMBINED DEBT

The City’s combined debt totals $40,220,541. This is a reduction of $10,904,884 from the prior year’s total debt. Of the total debt, $39,002,572 is tax supported and accounted for in the General Debt Service Fund and $1,217,969 is utility revenue supported and accounted for in the Utility Debt Service Fund.

Combined General and Water Sewer Debt by Bond Series Bond Series 2008 General Obligation Bonds 2011 General Obligation Refunding 2012 General Obligation Refunding 2012 Certificates of Obligation 2014 Certificates of Obligation 2014 General Obligation Refunding (2005A) 2015 General Obligation Refunding (2007 GO) 2016 General Obligation Refunding (2007 GO) 2016 Certificates of Obligation 2017 Tax Notes 2017 Subordinate Lien Pass Through Refunding 2020 General Obligation Refunding Total Tax Supported 2014 General Obligation Refunding (2005A) 2014 General Obligation Refunding (2005B) Total Utility Revenue Supported

Fiscal Year 2022 Proposed Budget

Principal Tax Supported (TxDOT Pass Through) Tax Supported Tax Supported Tax Supported Tax Supported Tax Supported Tax Supported Tax Supported Tax Supported Tax Supported Tax Supported (TxDOT Pass Through) Tax Supported Revenue Supported Revenue Supported

Interest

Total

1,090,000 915,000 390,000 650,000 3,770,000 935,000 8,585,000 2,245,000 2,005,000 930,000 6,475,000 5,540,000 33,530,000 565,000 585,000 1,150,000

414,473 427,763 6,289 102,125 937,506 44,906 1,258,788 63,150 448,178 42,450 1,281,250 445,695 5,472,572 27,300 40,669 67,969

1,504,473 1,342,763 396,289 752,125 4,707,506 979,906 9,843,788 2,308,150 2,453,178 972,450 7,756,250 5,985,695 39,002,572 592,300 625,669 1,217,969

34,680,000

5,540,541

40,220,541

103

LEGAL DEBT MARGINS FOR GENERAL OBLIGATIONS All taxable property within the City is subject to the assessment, levy and collection by the City of a continuing, direct annual ad valorem tax that is sufficient to provide for the payment of principal and of interest on all ad valorem tax debt within the limits prescribed by law. Article XI, Section 5, of the Texas Constitution is applicable to the City, and provides for a maximum ad valorem tax rate of $2.50 per $100 taxable assessed valuation for all City purposes. The Home Rule Charter of the City adopts the constitutionally authorized maximum tax rate of $2.50 per $100 taxable assessed valuation. Administratively, the Attorney General of the State of Texas will permit allocation of $1.50 of the $2.50 maximum tax rate for all general obligation debt service, as calculated at the time of issuance and based on a 90% collection rate.

Allowable debt levy per $100 valuation

$1.500000

Levy for Debt Service

$0.145054

Percentage of allowable debt levy used

9.67%

GENERAL DEBT SERVICE The primary source of revenue for the General Debt Service Fund is the ad valorem property tax. The proposed ad valorem tax rate of $0.501069 is split into two rates. Approximately 29% ($0.145054) of the tax revenue is used to pay principal and interest on the City’s outstanding general obligation debt. The remaining 71% ($0.356015) of the revenue generated by the tax rate is used to pay for maintenance and operating costs incurred in the General Fund. Fiscal Year Tax Year

Estimated Tax Roll TIF Property Value Value Used for Revenue Calculation Proposed Tax rate per $100 Valuation Revenue from Taxes Estimated Collection Rate Estimated Current Year Funds Available

Fiscal Year Tax Year

Maintenance & Operations Rate M&O Yield Debt Service Rate Debt Service Yield

Total Rate Total Yield

Estimated Ad Valorem Tax Revenue

2019 2018

2020 2019

2021 2020

2022 2021

FY 2020 TO FY 2021 CHANGE

$ Change

1,935,983,668 177,844,682

2,206,782,929 180,206,589

2,654,551,468 332,774,093

1,541,669,511

1,758,138,986

2,026,576,340

2,321,777,375

0.621111

0.580000

0.538710

0.501069

(0.03764)

-6.99%

9,575,479 99%

10,197,206 99%

10,917,360 99%

11,633,707 100%

716,346 100%

7.02%

9,479,724

2019 2018

10,095,234

10,808,187

11,633,707

Distribution of Current Tax Collections 2020 2019

2021 2020

2022 2021

447,768,539 152,567,504

% Change

1,658,547,850 116,878,339

295,201,035

825,520

20.29% 84.66% 14.57%

7.64%

FY 2020 TO FY 2021 CHANGE

$ Change

% Change

0.393237

0.380567

0.378201

0.356015

(0.022186)

-5.87%

6,001,791 0.227874 3,477,930

6,623,988 0.199433 3,471,245

7,587,887 0.160509 3,220,300

8,265,876 0.145054 3,367,835

677,989 (0.01545) 147,535

8.94% -9.63% 4.58%

0.621111 9,479,721

Fiscal Year 2022 Proposed Budget

0.580000 10,095,234

0.538710 10,808,187

0.501069 11,633,711

(0.037641) 825,524

-6.99% 7.64%

104

The Debt Service (DS) portion of the tax rate covers the City’s bond payments and other outstanding debt. This portion of the tax rate is not flexible and is set by a calculation based on the required fiscal year payments of the City’s debt. Fiscal Year 2022’s debt service rate is $0.145054. This is a decrease of $0.01545 (-9.63%) from the Fiscal Year 2021 rate, resulting in $3,367,835 in revenue to be used for debt payments. The Debt Service tax rate is calculated by subtracting any revenue paid from other sources from the annual required debt payment and then dividing that result by the adjusted taxable value and multiplying by 100.

(Total annual debt payment) – (Non-tax revenue) ÷ (Adjusted Taxable Value) x 100 = Debt Service Tax Rate ((6,054,217 – 2,686,383) ÷ 2,321,777,375) x 100 = $0.145054

Series 2008 Series 2011 Series 2012 Series 2012 Series 2014 Series 2014 Series 2015 Series 2016 Series 2016 Series 2017 Series 2017 Series 2020

Prinicipal 195,000.00 50,000.00 235,000.00 220,000.00 1,590,000.00 105,000.00 1,830,000.00 300,000.00 395,000.00 4,920,000.00

Interest 149,312.50 38,887.50 4,680.00 15,700.00 118,412.50 18,900.00 329,475.00 50,050.00 54,281.26 262,200.00 23,400.00 68,918.25 1,134,217.01

Tax Rate 0.001675 0.008600 0.002830 0.010290 0.014191 0.070638 0.006860 0.009990 0.019981 0.145054

105

Repayment is structured with a minimum annual payment, with an additional accelerated portion (amount above the guaranteed minimum annual payment) based on traffic counts. The minimum annual payment is $2,009,570. The City Council has deemed any amount above the minimum payment be held as committed fund balance and, if possible, used for early redemption in order to reduce future interest payments. The city has redeemed an additional $17,037,448 resulting in $8,575,962 in interest savings. Combined with general obligation refunding and increasing property values, this early redemption process has also helped to decrease the debt service tax rate by just under $0.25 since Fiscal Year 2014. To date, the 2014 Certificates of Obligation and the 2017 Tax Notes have not impacted the debt service tax rate. The proceeds from the certificates were used to fund construction of Fire Station #2 and the Animal Shelter, and the proceeds from the tax notes funded fire department equipment. The payments have been made from fund balance in the Debt Service fund. This fund balance is the result of interest collected in the fund, as well as delinquent and penalty taxes that have accumulated over prior years and is restricted to use on debt payments.

GENERAL DEBT SERVICE FUND STATEMENT History

Projected

Budget

2020 Actual

2021 Budget

2021 Revised

2022 Budget

% Change

3,048,331

2,606,453

2,627,323

4,128,666

58.40%

3,559,987 12,012 71,257 23,428 4,019,140 7,685,825

3,220,300 15,000 20,000 20,000 4,019,140 7,294,440

3,366,470 15,000 55,000 6,200 4,019,140 7,461,810

3,367,835 15,000 35,000 5,000 4,019,140 7,441,975

4.58% 75.00% -75.00% 2.02%

53,664 51,108 104,772

51,108 51,108

7,790,597

7,345,548

7,512,918

7,493,083

2.01%

9,250 6,547,078 1,655,277 8,211,605

9,500 4,555,000 1,382,711 5,947,211

9,500 4,720,000 1,282,075 6,011,575

9,500 4,920,000 1,038,155 5,967,655

8.01% -24.92% 0.34%

Fund Balance

2,627,323

4,004,790

4,128,666

5,654,093

41.18%

Council Committed Fund Balance Ending Fund Balance

180,756 2,446,567

2,190,326 1,814,464

2,190,326 1,938,340

2,190,326 3,463,767

90.90%

Beginning Fund Balance Revenue Property Tax Revenue Property Tax Penalty Income Delinquent Property Tax Interest Income TXDOT Pass Through Toll Reimbursement Transfers In General Fund (Fire Engine) Capital Purchase (Pinson Farm)

Total Revenue Expenditures Fees Paid to Agencies for Bonds Bonds Retired Bond Interest

Fiscal Year 2022 Proposed Budget

106

GENERAL DEBT SERVICE PAYMENT SCHEDULES BY BOND SERIES Fiscal Year 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036

General Debt Service Principal Interest 4,920,000 1,038,155 4,055,000 861,143 3,305,000 740,967 3,080,000 640,919 3,180,000 540,781 3,365,000 432,450 1,885,000 350,748 1,935,000 294,068 2,005,000 234,523 2,055,000 171,057 2,410,000 101,190 495,000 37,569 515,000 19,178 160,000 7,350 165,000 2,475 33,530,000 5,472,572

Total Payments 5,958,155 4,916,143 4,045,967 3,720,919 3,720,781 3,797,450 2,235,748 2,229,068 2,239,523 2,226,057 2,511,190 532,569 534,178 167,350 167,475 39,002,572

The twelve current outstanding tax supported debt issues owed as of Fiscal Year 2022 total $39,002,572. This is the total of $33,530,000 in remaining principal payments and $5,472,572 in interest.

2008 General Obligation Bonds Original Issue Amount: $39,605,000 Original Date of Issue: July 15, 2008 Maturity Date: August 15, 2033

Fiscal Year 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

2008 General Obligation Bonds Principal Interest Total Payments 53,250 53,250 53,250 53,250 53,250 53,250 52,710 52,710 53,250 53,250 335,000 53,250 388,250 160,000 35,663 195,663 170,000 28,263 198,263 185,000 20,188 205,188 240,000 11,400 251,400 1,090,000 414,473 1,504,473

Use of Bond Proceeds "Proceeds from the sale of the Bonds will be used to (i) provide funds for the design, development, construction, extension, expansion and/or improvement of certain state highway facilities and roadways located within the City and as more specifically described in the {Pass Through} Agreement, (ii) pay interest on the Bonds for the period authorized by State law, and (iii) pay the costs of issuance on the Bonds..." Initial Design of three Pass Through Toll Projects Total Project Cost: $9,598,084 2008 Bond Allocation: $8,687,712 Completion Date: March 2013 Fiscal Year 2022 Proposed Budget

107

FM 548 @ US HWY 80 Roadway Reconstruction & Widening Total Project Cost: $14,818,921 2008 Bond Allocation: $8,867,416 Completion Date: October 2015 FM 740 Roadway Reconstruction & Widening Total Project Cost: $7,084,333 2008 Bond Allocation: $4,889,896 Completion Date: May 2016 FM 741 Roadway Reconstruction & Widening Total Project Cost: $13,604,976 2008 Bond Allocation: $13,604,976 Completion Date: October 2015 Bond Interest Recognizing that there would be a gap between the time where bond payments became due and the time that TxDOT began making the Pass Through Reimbursements, $3,239,848 of the bond issue was used to decrease the annual Series 2008 Bond Payments from Fiscal Year 2009 to Fiscal Year 2012. This reduced the impact on the debt service tax rate over three years. Bond Issuance Costs Total Cost: $315,153 All the proceeds from the 2008 General Obligation Bonds have been spent. Pass Through Toll Program – Early Redemption The Pass Through Toll Program is an agreement between the City and the Texas Department of Transportation (TxDOT). With this agreement, the City sold the 2008 General Obligation Bonds to fund the expansion of three state owned roadways within the city limits and oversaw the construction. Upon completion of the projects, responsibility for maintenance of the roadways was returned to the state and TxDOT began to reimburse the City annually. TxDOT began making annual payments to the City in Fiscal Year 2013. This repayment is structured with a minimum annual payment and an additional accelerated portion (the amount above the guaranteed minimum annual payment) based on traffic counts. The minimum annual payment is $2,009,570. The City Council has deemed any amount above the minimum payment be held as committed fund balance and, if possible, used for early redemption in order to reduce future interest payments. As of 2022, the City has redeemed an additional $17,037,448 resulting in $8,575,962 in interest savings. Fiscal Year 2022 Proposed Budget

108

EARLY REDEMPTION PAYMENT HISTORY & INTEREST SAVINGS Fiscal Year

Pass Through Reimbursement Amount

Amount Applied to the annual 2008 Bond Payments

Remaining Available for Early Redemption

Early Redemption

Interest Savings

2013

3,606,373

2,009,570

1,596,803

1,590,000

1,359,450

2014

3,685,934

2,009,570

1,676,364

1,675,000

1,281,313

2015

3,901,756

2,009,570

1,892,186

1,890,000

1,260,175

2016

4,019,140

2,009,570

1,955,000

1,088,700

2017

4,019,140

2,009,570

1,910,000

894,750

2018

4,019,140

2,009,570

2,005,000

631,575

2019

4,019,140

2,009,570

2,000,000

528,075

2020

4,019,140

2,009,570

2,007,447

616,313

2021

4,019,140

2,009,570

2,005,000

915,612

35,308,903

18,086,130

17,222,773

17,037,448

8,575,962

Refunding The following amounts have been refunded from the 2008 General Obligation Bonds: 2011 General Obligation Refunding Principal Amount Refunded: $1,200,000 Interest Savings: $94,825

2011 General Obligation Refunding Fiscal Year 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

2011 General Obligation Refunding Principal Interest Total Payments 38,888 38,888 38,888 38,888 38,888 38,888 38,888 38,888 38,888 38,888 38,888 38,888 38,888 38,888 38,888 38,888 38,888 38,888 38,888 38,888 915,000 38,888 953,888 915,000 427,763 1,342,763

Original Issue Amount: $2,295,000 Original Date of Issue: August 2, 2011 Maturity Date: August 15, 2032 Interest savings from this refunding will be $114,573.

Use of Bond Proceeds "Proceeds from the sale of the Tax-Exempt Bonds will be used (i) to refund a portion of the City's outstanding tax-exempt debt ...as described on Schedule 1 {in the Official Statement} for restructuring purposes ... and (ii) to pay the costs of issuance associated with the sale of the Tax-Exempt Bonds.." Fiscal Year 2022 Proposed Budget

109

Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 2005A Principal Amount Refunded: $20,000 Interest Savings: $410 Proceeds from the 2005A Certificates of Obligation funded: - East Side Drainage Project General Obligation Bonds, Series 2007 Principal Amount Refunded: $910,000 Interest Savings: $19,338 Pass Through Toll Revenue and Limited Tax Bonds, Series 2008 Principal Amount Refunded: $1,200,000 Interest Savings: $94,825 Bond Issuance Costs Total Cost: $165,000 All of the proceeds from the 2011 General Obligation Refunding have been spent.

2012 General Obligation Refunding Original Issue Amount: $2,235,000 Original Date of Issue: November 6, 2012 Maturity Date: February 15, 2023

Fiscal Year 2022 2023

2012 General Obligation Refunding Principal Interest Total Payments 195,000 4,680 199,680 195,000 1,609 196,609 390,000 6,289 396,289

Interest savings from this refunding will be $448,695.

Use of Bond Proceeds "Proceeds from the sale of the Bonds will be used to refund a portion of the City's outstanding debt ...and to pay the costs of issuance associated with the issuance of the Bonds." Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2000B

Principal Amount Refunded: $350,000 Interest Savings: $63,937 Proceeds from the 2000B Certificates of Obligation funded: - A partial widening of Pinson Road (FM740) - A portion of the Central Fire Station Expansion Fiscal Year 2022 Proposed Budget

110

Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2003

Principal Amount Refunded: $1,830,000 Interest Savings: $384,759 Proceeds from the 2003 Certificates of Obligation funded: - Mulberry Park: Extend Forney Middle School Parking Lot - Mulberry Park: ADA Concessions & Restroom at the Baseball Complex - Mulberry Park: Restrict Access to Parking via Fence - Mulberry Park: City Maintenance Building - Mulberry Park: Remove Old Concession and metal buildings - Henderson Park: Irrigate Soccer Complex - Henderson Park: Dirt work - Mulberry Park: Regrade Baseball Fields - Eastside Park: Replace Play Structure - Mulberry Park: Extend Parking lot at Johnson Elementary & Baseball Complex - Eastside Park: Install Crushed Granite for Shaded Areas - Mulberry Park: Upgrade Restroom & Concession Facility at the Softball Complex - Hamblen Park: Install Linear fence and stone park sign - FISD: Install Practice Fields at 3 Elementary Schools - FISD: Install Practice Fields at Forney High School - Forney Community Park Design Bond Issuance Total Cost: $55,000 All the proceeds from the 2012 General Obligation Refunding have been spent.

2012 Certificates of Obligation Fiscal Year 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

2012 Certificates of Obligation Principal Interest Total Payments 50,000 15,700 65,700 50,000 14,700 64,700 55,000 13,650 68,650 55,000 12,550 67,550 55,000 11,313 66,313 60,000 9,875 69,875 60,000 8,375 68,375 65,000 6,813 71,813 65,000 5,025 70,025 65,000 3,075 68,075 70,000 1,050 71,050 650,000 102,125 752,125

Original Issue Amount: $1,030,000 Original Date of Issue: November 6, 2012 Maturity Date: February 15, 2032 Use of Bond Proceeds "Proceeds from the sale of the Certificates will be used for the purpose of paying contractual obligations incurred for (i) the acquisition of Mulberry Park: and (ii) paying legal, fiscal and engineering fees in connection with such project."

Mulberry Park Purchase Fiscal Year 2022 Proposed Budget

111

Total Project Cost: $1,030,000 2007 Bond Allocation: $1,030,000 Completion Date: March 2013 All of the proceeds from the 2012 Certificates of Obligation have been spent.

2014 General Obligation Refunding

Original Issue Tax Supported Amount: $2,148,109 ($3,440,000 total issue) Original Date of Issue: November 4, 2014 Maturity Date: February 15, 2025 Interest savings from this refunding will be $213,278.

2014 General Obligation Refunding Fiscal Year Principal Interest Total Payments 2022 220,000 18,900 238,900 2023 230,000 14,113 244,113 2024 240,000 8,825 248,825 2025 245,000 3,069 248,069 935,000 44,906 979,906

Use of Bond Proceeds "Proceeds from the sale of the Bonds will be used (i) to refund a portion of the City's outstanding debt (the Refunded Obligations) as described on Schedule I [in the Official Statement} and (ii) to pay the costs of issuance associated with the sale of the Bonds.. " Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2005A

Principal Amount Refunded: $2,148,109 Interest Savings: $213,278 Proceeds from the 2005A Certificates of Obligation funded: - Eastside Drainage Project All proceeds from the 2014 General Obligation Refunding have been spent.

2014 Certificates of Obligation Original Issue Amount: $4,945,000 Original Date of Issue: November 4, 2014 Maturity Date: February 15, 2034 Use of Bond Proceeds "Proceeds from the sale of the Certificates will be used for (i) the construction of public works, to wit: (a) constructing and equipping a new fire station and (b) constructing and equipping a new animal shelter, and (2) cost of issuance associated with the sale of the Certificates."

Fiscal Year 2022 Proposed Budget

112

Fiscal Year 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

Fire Station #2 Total Project Cost (Budget): $4,102,209 2014 Certificate of Obligation Allocation: $3,013,994 Estimated Project Completion Date: February 2017

2014 Certificates of Obligation Principal Interest Total Payments 235,000 118,413 353,413 240,000 113,363 353,363 250,000 107,538 357,538 260,000 100,838 360,838 265,000 93,619 358,619 275,000 86,194 361,194 285,000 78,138 363,138 295,000 69,069 364,069 310,000 59,238 369,238 320,000 47,800 367,800 330,000 34,800 364,800 345,000 21,300 366,300 360,000 7,200 367,200 3,770,000 937,506 4,707,506

Animal Shelter Total Project Cost: $2,138,899 2014 Certificate of Obligation Allocation: $2,000,000 Estimated Project Completion Date: April 2017

All proceeds from the 2014 Certificates of Obligation have been spent. To date, the 2014 Certificate of Obligation have not impacted the debt service tax rate. These payments have been made from fund balance in the General Debt Service Fund. This fund balance is the result of interest collected in the fund, as well as delinquent and penalty taxes that have accumulated over prior years and is restricted to use on debt payments

2015 General Obligation Refunding Original Issue Amount: $8,585,000 Original Date of Issue: June 1, 2015 Maturity Date: September 30, 2027 Interest savings from this refunding will be $1,230,068.

2015 General Obligation Refunding Fiscal Year Principal Interest Total Payments 2022 329,475 329,475 2023 980,000 312,325 1,292,325 2024 1,805,000 263,588 2,068,588 2025 1,865,000 194,700 2,059,700 2026 1,935,000 118,700 2,053,700 2027 2,000,000 40,000 2,040,000 8,585,000 1,258,788 9,843,788

Use of Bond Proceeds "Proceeds from the sale of the Bonds will be used (i) to refund certain outstanding obligations of the City described on Schedule I {in the Official Statement}... for debt savings; and (ii) to pay the costs associated with the issuance of the Bonds."

General Obligation Bonds, Series 2007 Principal Amount Refunded: $8,955,000 Interest Savings: $1,230,068 All the proceeds from the 2015 General Obligation Refunding have been spent. Fiscal Year 2022 Proposed Budget

113

2016 Certificates of Obligation Original Issue Amount: $2,500,000 Original Date of Issue: August 2, 2016 Maturity Date: February 15, 2034

2016 Certificates of Obligation Fiscal Year 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036

Principal 105,000 110,000 115,000 115,000 120,000 125,000 130,000 130,000 135,000 140,000 145,000 150,000 155,000 160,000 165,000 2,000,000

Interest 54,281 51,056 47,681 44,156 39,956 36,306 33,675 30,831 27,681 24,156 20,325 16,269 11,978 7,350 2,475 448,178

Total Payments 159,281 161,056 162,681 159,156 159,956 161,306 163,675 160,831 162,681 164,156 165,325 166,269 166,978 167,350 167,475 2,448,178

Use of Bond Proceeds "Proceeds from the sale of the Certificates will be used for (1) street improvements, including drainage, curbs, gutters, utility line relocation, street lighting, and /or the acquisition of land and rights-of-way therefor, and (2) the cost of issuance associated with the sale of the Certificates." Redbud Roadway Reconstruction Total Project Cost (Budget): $2,833,079 2016 Certificate of Obligation Allocation:

$2,500,000 Estimated Project Completion Date: July 2018 All of the proceeds from the 2016 Certificates of Obligation Refunding have been spent.

2016 General Obligation Refunding Original Issue Amount: $8,220,000 Original Date of Issue: August 2, 2016 Maturity Date: February 15, 2023 Interest savings from this refunding will be $700,088.

2016 General Obligation Refunding (2007) Fiscal Year Principal Interest Total Payments 2022 1,590,000 50,050 1,640,050 2023 655,000 13,100 668,100 2,245,000 63,150 2,308,150

114

2017 Subordinate Lien Pass Through Toll Revenue and Limited Tax Refunding Bonds 2017 Subordinate Lien Pass Through Toll Refunding (2008) Fiscal Year Principal Interest Total Payments 2022 1,830,000 262,200 2,092,200 2023 885,000 170,700 1,055,700 2024 115,000 144,150 259,150 2025 120,000 140,700 260,700 2026 390,000 137,100 527,100 2027 145,000 125,400 270,400 2028 725,000 119,600 844,600 2029 745,000 90,600 835,600 2030 770,000 60,800 830,800 2031 750,000 30,000 780,000 6,475,000 1,281,250 7,756,250

Original Issue Amount: $11,465,000 Original Date of Issue: August 15, 2017 Maturity Date: August 15, 2031 Interest savings from this refunding will be $1,228,114.

Use of Bond Proceeds "Proceeds from the sale of the Bonds will be used (i) to refund a portion of the 2008 Bonds (as shown in Schedule I) (the “Refunded Bonds”) and (ii) for payment of professional services of attorneys, financial advisors and other professionals in connection with the issuance of the Bonds.” Pass-Through Toll Revenue and Limited Tax Bonds, Series 2008 Principal Amount Refunded: $12,170,000 Interest Savings: $1,228,114 All of the proceeds from the 2017 Subordinate Lien Pass Through Toll Revenue and Limited Tax Refunding Bonds have been spent.

2017 Tax Notes Original Issue Amount: $2,055,000 Original Date of Issue: August 15, 2017 Maturity Date: February 15, 2024

Fiscal Year 2022 2023 2024

2017 Tax Notes Principal Interest 300,000 23,400 310,000 14,250 320,000 4,800 930,000 42,450

Total Payments 323,400 324,250 324,800 972,450

Use of Proceeds “Proceeds from the sale of the Notes will be used to pay for (i) public safety equipment and (ii) professional services of attorneys, financial advisors and other professionals in connection with the projects and the issuance of the Notes.” 2017 Fire Arial Platform Total Purchase Budget: $1,341,519 2017 Tax Note Allocation: $1,341,519 Estimated Completion Date: December 2018 Fiscal Year 2022 Proposed Budget

115

2017 Fire Engine/Pumper Total Purchase Budget: $727,500 2017 Tax Note Allocation: $713,481 Cost variance is funded from the General Fund. Estimated Completion Date: September 2018 All of the proceeds from the 2017 Tax Notes have been spent.

2020 General Obligation Refunding 2020 General Obligation Refunding Fiscal Year Principal Interest Total Payments 2022 395,000 68,918 463,918 2023 400,000 63,791 463,791 2024 405,000 58,598 463,598 2025 415,000 53,309 468,309 2026 415,000 47,956 462,956 2027 425,000 42,538 467,538 2028 525,000 36,410 561,410 2029 530,000 29,606 559,606 2030 540,000 22,704 562,704 2031 540,000 15,738 555,738 2032 950,000 6,128 956,128 5,540,000 445,695 5,985,695

Original Issue Amount: $5,705,000 Original Date of Issue: November 19, 2020 Maturity Date: February 15, 2032 Interest savings from this refunding will be $1,061,209.

Use of Bond Proceeds "Proceeds from the sale of the Bonds will be used (i) to refund a portion of the City's outstanding debt (the Refunded Obligations) as described on Schedule I {in the Official Statement}... and (ii) to pay the costs of issuance associated with the sale of the Bonds..." Tax & Waterworks & Sewer System Rev. CO, Series 2011 (Tax Supported) Principal Amount Refunded: $2,385,000 Interest Savings: $610,053 Tax & Waterworks & Sewer System Rev. CO, Series 2011 (W&S Supported) Principal Amount Refunded: $1,765,000 Interest Savings: $451,156 General Obligation Refunding Bonds, Series 2011 Principal Amount Refunded: $1,380,000 Interest Savings: $185,394 All of the proceeds from the 2016 General Obligation Refunding have been spent

Fiscal Year 2022 Proposed Budget

116

UTILITY DEBT SERVICE The primary source of revenue for the Utility Debt Service Fund is revenue from fees charged for water and sewer services. Other funding for the utility debt payments includes water and sewer impact fees.

UTILITY DEBT SERVICE FUND STATEMENT History

Projected

Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change

Beginning Fund Balance Transfers In Utility Fund Water Impact Fund Sewer Impact Fund General Debt Service

Total Revenue Expenditures Fees Paid to Agencies for Bonds Bonds Retired Bond Interest

Ending Fund Balance

-64.04% 0.78% -2.25% -

514,675

121,658 157,313 19,804 298,775

514,675

298,775

-41.95%

405,000 109,675 514,675

270,000 28,775 298,775

-33.33% -73.76% -41.95%

544,630 154,250 20,095

338,316 156,100 20,259 -

718,975

514,675

718,975

590,000 128,975 718,975

-41.95%

The Utility Debt Service Fund maintains a zero fund balance. The exact amounts necessary to cover debt payments are transferred in at the beginning of each Fiscal Year.

Series 2014

Utility Debt Service GO Refunding (2005A)

Prinicipal 130,000.00

Interest 11,462.50

Annual Payment 141,462.50

Series 2014A

GO Refunding (2005B)

140,000.00 270,000.00

17,312.50 28,775.00

157,312.50 298,775.00

Fiscal Year 2022 Proposed Budget

117

UTILITY DEBT SERVICE PAYMENT SCHEDULES BY BOND SERIES The three current outstanding water sewer debt issues owed as of Fiscal Year 2022 total $1,217,969. This is the total of $1,150,000 in remaining principal payments and $67,969 in interest.

Fiscal Year 2022 2023 2024 2025

Utility Debt Service Principal Interest 270,000 28,775 285,000 21,444 295,000 13,256 300,000 4,494 1,150,000 67,969

Total Payments 298,775 306,444 308,256 304,494 1,217,969

2014 General Obligation Refunding 2014 General Obligation Refunding Fiscal Year Principal Interest Total Payments 2022 130,000 11,463 141,463 2023 140,000 8,588 148,588 2024 145,000 5,381 150,381 2025 150,000 1,869 151,869 565,000 27,300 592,300

Original Issue Revenue Supported Amount: $1,291,891 ($3,440,000 total issue) Original Date of Issue: November 4, 2014 Maturity Date: February 15, 2025 Interest savings from this refunding will be $126,027.

Use of Bond Proceeds

"Proceeds from the sale of the Bonds will be used (i) to refund a portion of the City's outstanding debt (the Refunded Obligations) as described on Schedule I [in the Official Statement} and (ii) to pay the costs of issuance associated with the sale of the Bonds.. "

Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2005A

Principal Amount Refunded: $1,291,891 Interest Savings: $126,027 Proceeds from the 2005A Certificates of Obligation funded: - Trinity & Main Street Sewer - Pacific Sewer Connection & Lift Station Elimination - Trinity Sewer Connection & Lift Station Elimination - Knox Sewer Connection & Lift Station Elimination - Replace Sewer Line North of HWY 80 between FM 740 & FM 548 - Buffalo Creek Sewer Connection & Lift Station Elimination - Broad Street Water Line - Elevated Water Storage

All proceeds from the 2014 General Obligation Refunding have been spent.

Fiscal Year 2022 Proposed Budget

118

2014A General Obligation Refunding Original Issue Revenue Supported Amount: $1,350,000 2014A General Obligation Refunding Original Date of Issue: November 4, 2014 Fiscal Year Principal Interest Total Payments Maturity Date: February 15, 2025 Interest savings from this refunding will be $204,207.

2022 2023 2024 2025

Use of Bond Proceeds

140,000 145,000 150,000 150,000 585,000

17,313 12,856 7,875 2,625 40,669

157,313 157,856 157,875 152,625 625,669

"Proceeds from the sale of the Taxable Bonds will be used (i) to refund a portion of the City's outstanding debt (the "Refunded Obligations") as described on Schedule II {in the Official Statement} and (ii) to pay the costs of issuance associated with the sale of the Taxable Bonds..." Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2005B

Principal Amount Refunded: $1,285,000 Interest Savings: $204,207

Proceeds from the 2005B Certificates of Obligation funded: - A portion of Pump Station #2 Bond Issuance Total Cost: $65,000 All proceeds from the 2014A General Obligation Refunding have been spent.

Fiscal Year 2022 Proposed Budget

119

CAPITAL IMPROVEMENT PROGRAM

Fiscal Year 2022 Proposed Budget

120

Unlike the City’s operating budget, the capital improvement budget does not conclude at the end of each fiscal year. Many of the larger projects remain in progress for multiple years. As economic conditions and the needs of the Forney community change, it is often necessary to reprioritize which projects receive funding. Capital improvements are defined as facilities and infrastructure that have a life expectancy of three or more years and are owned and operated by or on behalf of a political subdivision. Generally, CIP Projects are relatively expensive and non-recurring, have a multiyear useful life, and result in fixed assets. This includes construction and acquisition of new buildings, construction and reconstruction of streets, water and sanitary sewer improvements, drainage improvements, and land purchases. Occasionally, studies and master plans that will impact land use, facilities, and infrastructure are accounted for as part of the CIP.

Factors considered in the evaluation of capital projects:

The purchase and replacement of vehicles and equipment are not included with capital projects but are fixed assets. Information on General Fund fixed assets can be found in the Capital Purchases Fund. Capital purchases for the Utility Fund and the Economic Development Corporation Fund can be found within each of those funds.

PLANNING PROCESS

• • • • • • • • •

•

Community Economic Effects Fiscal Impacts Whether an urgent need or opportunity is present Alignment with City Council Strategic Plan Implications of deferring the project Amount of disruption and inconvenience Environmental, aesthetic and social effects Health and safety effects Feasibility, including public support and project readiness Advantages that would accrue from relation to other capital projects

Capital Projects are requested by the Department Directors as part of the annual budget process. Requests are submitted and then reviewed by the City Manager’s Office and finance staff. Projects approved by the City Manager are then presented to the City Council along with the annual operating budget for final approval. The Capital Project Five Year Plan is also reviewed and updated at that time. Occasionally, the need arises to add a new project outside of the annual budget process. When this occurs, the project is presented to the City Council through the regular budget amendment process. The Capital Improvement Program is comprised of five funds: • • • • •

General Fund Capital Improvement Fund Utility Capital Improvement Fund Tax Increment Reinvestment Zone (TIRZ) Fund EDC Capital Improvement Fund - The information on the EDC Capital Improvement Fund is included in the Economic Development Corporation section. Fox Hollow Public Improvement District

Fiscal Year 2022 Proposed Budget

121

The City of Forney separates capital improvement projects into several categories within these funds: GENERAL CAPITAL IMPROVEMENTS o Roads, Signalization, Drainage o Parks & Recreation o Technology o Facilities o Combination Projects – These are capital improvements to the City’s roadway, water and/or sewer systems that are performed together in order to reduce cost and time spent on the project. UTILITY CAPITAL IMPROVEMENTS o Water o Sewer o Combination

COMPLETED PROJECTS

The following projects were determined to be unnecessary during Fiscal Year 2021. • Drainage Study - $450,000 was returned to fund balance. • City Storage Facility - $120,376 was returned to fund balance. The following capital projects were completed during Fiscal Year 2021. • Trailhouse Road* -$2,364,351 • Dek Hockey - $52,074 • City Facility Security Upgrades - $333,292 • Upgrade Pump Station 2 Capacity* - $6,777,326 • Traillhouse Utilities* - $1,033,145 *Construction of these projects was substantially complete in Fiscal Year 2020 and only outstanding bills paid early in Fiscal Year 2021 resulted in the projects remaining open.

Fiscal Year 2022 Proposed Budget

122

ACTIVE PROJECTS Project Name

Fire Station 2 Drainage Reconstruction CR 212 Participation Agreement** Community Park Christmas Lights Technology Infrastructure NewWorld EnerGov Warning Sirens & Fiber Ring Community Development/ Public Works Expansion Gateway Sewer Participation Agreement** Clay Pipe Lining (CIPP)

Total Active Projects

Project Type Drainage

Budget

7/31/2021

Remaining

100,000

203

99,797

Roadway Parks & Rec Technology Technology Technology Technology

1,440,000 600,000 753,500 600,000 91,000 3,242,275

127,132 644,433 365,954 67,974 -

1,440,000 472,868 109,068 234,046 23,026 3,242,275

Facilities

1,861,027

1,326,592

534,436

Sewer

4,015,363

14,843

4,000,520

Sewer 10

1,070,392 13,773,557

2,547,129

1,070,392 11,226,428

**Participation Agreements result in a developer assuming full responsibility for constructing the improvement and the city issuing a check for the agreed upon amount upon completion. Forty percent ($5,445,363, 40%) of the current active projects are participation.

The County Road 212 Participation Agreement and the Warning Sirens & Fiber Ring were not included in the original Fiscal Year 2021Budget and were City Council approved additions to the Capital Improvement Plan.

Fiscal Year 2022 Proposed Budget

123

NEW PROJECTS Project Name

Pavement Condition Index Study

Project Type

Fund

100,000

16 – General 16 – General 16 – General 16 – General

Facilities

16 – General

Fund Balance

750,000

City Hall Annex & Remodel

Facilities

16 – General

Comprehensive Plan CMOM Study Sewer Extension from Kaufman to Bowie Highway 80 Water Line Replacement

Facilities Sewer

16 – General 06 – Utility

Fund Balance & GF Transfer Fund Balance Fund Balance

Sewer

06 – Utility

Fund Balance

2,735,000

Water

06 – Utility

709,000

West Highway 80 18” Loop

Water

06 – Utility

Additional Funding for Clay Pipe Replacement (CIPP) Project 185

Fund Balance Fund Balance & UF Transfer

Sewer

06 - Utility

Community Park Field Resurfacing Motorola Radio Core Maintenance FJC Security Overhaul Fire Station 1 Remodel Fire Station 1 Covered Parking Future Land Acquisition for City Facilities

Total Active Projects

Fiscal Year 2022 Proposed Budget

16 - General

Technology

16 - General

Parks

16 - General

Technology Technology Facilities Facilities

Budget

Fund Balance Payment in lieu of Parkland Payment in lieu of Parkland GF Transfer Fund Balance Fund Balance Fund Balance

Community Park Security

Roadway

Funding Source

Fund Balance

250,000 60,000 282,761 50,000 75,000 50,000

3,000,000 200,000 250,000

3,335,000 750,000

12,596,761

124

GENERAL CAPITAL IMPROVEMENT FUND History

Beginning Fund Balance Revenues Miscellaneous Income Payment in Lieu of Parkland Developer Contributions Interest Income Transfers In General Fund Utility Fund Roadway Impact Fund TIRZ Fund

Total Revenue Expenditures Construction In Progress Fund Balance Transfers Out Capital Purchases Fund

Reserved for Future Projects Ending Fund Balance

2020 Actual

8,458,577

Projected 2021 Budget

10,833,077

Budget

2021 Revised

10,405,266

2022 Budget

8,245,368

% Change

-23.89%

20,000 350,964 2,000,000 15,150 2,386,114

45,000 5,000 50,000

369,000 800 369,800

200,000 200,000

344.44% -100.00% 300.00%

2,957,500 500,000 3,457,500

2,824,837 500,000 3,324,837

2,824,837 1,146,138 82,721 4,053,696

13,000,000 13,000,000

360.20% -100.00% 291.00%

5,843,614

3,374,837

4,423,496

13,200,000

291.13%

3,896,925

4,935,000

6,583,393

4,817,761

-2.38%

10,405,266

9,272,914

8,245,368

16,627,607

79.31%

153,884 153,884

10,405,266

4,150,000 5,122,914

2,650,000 5,595,368

2,650,000 13,977,607

-36.14% 172.84%

FISCAL YEAR 2021 The County Road 212 Participation Agreement and the Warning Sirens & Fiber Ring were not included in the original Fiscal Year 2021Budget and were City Council approved additions to the Capital Improvement Plan. County Road 212 Participation was funded with $1,357,279 of Roadway Impact Revenue being held in fund balance and a transfer of $87,721 from the Roadway Impact Fund to fund the total 1,440,000 budget. The Warning Sirens & Fiber project was also funded with fund balance and an additional transfer - $2,096,137 from CIP fund balance and a transfer of $1,146,137 from the Utility Fund. The fiber portion of the project will impact a number of systems throughout the city that service both utilities and general function of the city.

Fiscal Year 2022 Proposed Budget

125

The City Council also approved $264,655 worth of change orders for the Engineering / Community Development / Public Works office expansion. This required a transfer of $211,027 and increased the original budget of $1,650,000 to $1,861,027.

CAPITAL PURCHASES The City received $1,395,405 in Coronavirus Relief Funds (CRF) and applied the funds to police and fire department salaries. The funds that were originally budgeted for salaries were then used to purchase the equipment listed below.

• • •

• • • • • •

Body Worn Cameras and server for the Police Department Replacement Telephone System for the entire organization Fire Equipment o SCBA Upgrades for the Fire Department o Video Laryngoscopy System o Aeroclave o FARO Mapping o Station 1 Extractor o Chest Compression System o Radios Laptops for various departments PPE Improvements to office space at Fire Station 1 Gym Equipment for the Police Department Vehicles for all City departments Backpack Sprayers for Facilities Staff

FISCAL YEAR 2022 Efforts were made in both major CIP funds to allocate as much as possible of the available fund balances to newly proposed projects. Fund balances have been building since 2018 when the number of new projects proposed each year declined. As existing projects were completed or cancelled any remaining balances were returned to fund balance, and transfers from the operating funds continued to be made in preparation for future projects. Fund 16 has a significant fund balance made up of various sources: several which have restricted uses. • • • •

General Fund – All funds transferred from the General Fund are unrestricted. Interest – Unless otherwise specified, interest earnings are unrestricted. Roadway Impact Revenue – The funds are restricted to use on projects defined in the most recent Roadway Impact Study. Luminant Community Benefit Contribution – a donation made from the power plant for community betterment. The majority of the $400,000 donation was used to build the

Fiscal Year 2022 Proposed Budget

126

•

• •

Liberty Hill Monument. The remaining $70,000 is proposed to partially fund the pavement study, the Justice Center security upgrades, and the Fire Station 1 remodel. Developer Escrows – These funds were made available when improvements with funds held in escrow were not completed by the developer. These funds are held for up to 10 years. In most cases, the city completed the improvements and transferred the funds to the CIP Fund. These funds are proposed to be used for the Comprehensive Plan and the Pavement Index Study. Payment in Lieu of Parkland Dedications – These funds are restricted to use on parks improvements. Both proposed park projects are funded from this source. Developer Contributions – These are generally restricted to use on specific developments. Most agreements result in any excess funds being returned to the developer; however, the city received an unrestricted $2,000,000 contribution in 2019. This is proposed to be used for future land acquisition and partial funding of a potential city hall annex.

The General Fund transfer to the Capital Improvement Program for the upcoming year will be $13,000,000. New projects for 2022 total $4,817,761. Of that amount, only $2,032,761 was unable to be funded from existing Fund 16 fund balance. This will leave a balance of $10,967,239 available to be used to cash fund projects currently being considered by the bond committee.

Fiscal Year 2022 Proposed Budget

127

UTILITY CAPITAL IMPROVEMENT FUND Beginning Fund Balance Revenue NTMWD Reimbursement Developer Contributions Interest Income Transfers In Utility Fund Water Impact Fund Sewer Impact Fund

Total Revenue Expenditures Construction in Progress

Fund Balance Transfers Out Utility Fund

Reserved for Future Projects Ending Fund Balance

Projected History 2020 Actual 2021 Budget 2021 Revised 12,254,044 10,776,415 11,206,435

Budget 2022 Budget % Change 7,063,133 -34.46%

2,616,746 2,900,000 13,361 5,530,107

5,000 5,000

175,360 1,500 176,860

500 500

-90.00% -90.00%

1,500,000 1,500,000

4,774,152 4,774,152

218.28% 218.28%

5,530,107

1,505,000

1,676,860

4,774,652

217.25%

4,717,825

7,770,000

5,820,162

7,779,000

0.12%

13,066,326

4,511,415

7,063,133

4,058,785

-10.03%

1,859,891 1,859,891

11,206,435

4,511,415

7,063,133

4,058,785

-10.03%

FISCAL YEAR 2021 The $175,360 North Texas Municipal Water District (NTMWD) reimbursement was the result of work done on behalf of the NTMWD as part of the upgrades to Pump Station #2. The project was closed early in the fiscal year. There are only two active projects at this time and no additional projects were proposed during the fiscal year. Therefore, the $1,500,000 transfer was used to fund projects proposed for Fiscal Year 2022.

FISCAL YEAR 2022 Fund 06 also has a significant fund balance made up of various sources. There are also restricted funds held in the fund balance in this fund. •

Utility Fund - All funds transferred from the General Fund are unrestricted.

Fiscal Year 2022 Proposed Budget

128

• •

•

Interest - Unless otherwise specified, interest earnings are unrestricted. Impact Fees – Revenue from impact fees collected for water and sewer improvements are restricted to use on projects listed on the most recent water and sewer impact studies. There were no eligible projects proposed for 2022 and the available sewer impact balance in the fund is around $1.6 million. Developer Contributions - These are generally restricted to use on specific developments. Most agreements result in any excess funds being returned to the developer; however, the city received a payment from Windmill Farms in 2017 for participation in the construction of Pump Station 2 in 2005. These funds were unrestricted and are proposed to be used for the Highway 80 Water Line Loop.

POTENTIAL GRANT FUNDING The City is eligible for $6,748,698 from American Rescue Plan Act authorized by the federal government. The city will receive half of this money in Fiscal Year 2022 and the remaining funds in Fiscal Year 2023. Possible uses for these funds include water and sewer infrastructure. The City Council will determine how these funds will be allocated.

The Utility Fund transfer to the Capital Improvement Program for the upcoming year will be $4,774,152. New projects for 2022 total $7,779,000. This will leave a balance of $2,409,460 available to be used to on future projects.

Fiscal Year 2022 Proposed Budget

129

TAX REINVESTMENT ZONE FUND The Tax Increment Reinvestment Zone was established in December 2008 by City Council and included approximately 1,730 acres of land. The Zone was created as an economic development tool that uses the tax generated by new valuations to help finance the cost of improvements needed to promote development within the Zone. The City contributes 85% of the taxes collected in the Zone (less taxes collected on the base value) to the TIRZ fund. The City entered into an interlocal agreement with Kaufman County to participate in the Zone by contributing 50% of the County maintenance and operations tax rate (less taxes collected on the base value) to the TIRZ fund. In September of 2019, the city included an additional 209 acres in the zone. In June of 2020, the city also included another 240 acres. The city contributes 85% of the taxes collected in both additions to the TIRZ fund; however, Kaufman County only participates in the original 1,730 acres of the TIRZ.

Budget

History

Beginning Fund Balance Revenues Property Tax Income Interest Income Transfers In General Fund

Total Revenue Expenditures Professional Services Developer Reimbursements Capital Improvements

Fund Balance Transfers Out Capital Improvement Fund

Ending Fund Balance

Fiscal Year 2022 Proposed Budget

2020 Actual

256,882

Budget

2021 Budget 2021 Revised 2022 Budget

% Change

401,261

470,602

101,202

1,209,380 9,341 1,218,720

1,009,157 1,009,157

1,630,000 600 1,630,600

2,000,000 1,000 2,001,000

1,218,720

1,009,157

1,630,600

2,001,000

98.28%

5,000 500,000 505,000

75,000 500,000 575,000

2,000,000 2,000,000

20,000 1,500,000 1,520,000

-73.33% 200.00% 164.35%

970,602

835,418

101,202

582,202

-30.31%

500,000 500,000

470,602

335,418

101,202

500,000 500,000 82,202

-74.78% 98.19% 98.28% -

-75.49%

130

FOX HOLLOW PUBLIC IMPROVEMENT DISTRICT In 2008, the City Council authorized the creation of the Villages of Fox Hollow Public Improvement District No. 1 (PID) to finance the cost of certain public improvements for the benefit of property in the PID. Only properties within the boundary of the PID include a special assessment the to be used for the reimbursement of public improvements.

Beginning Fund Balance Revenues PID Assessment Interest Income Transfers In General Fund

Total Revenue Expenditures PID Administrator Developer Reimbursements

Fund Balance Transfers Out Capital Improvement Fund

Ending Fund Balance

Fiscal Year 2022 Proposed Budget

Budget

History

2020 Actual

160,735

112,511 74 112,585

2021 Budget 2021 Revised 2022 Budget

30,375

33,862

120,000

105,000

175,000

120,000

105,000

175,000

% Change

11.48% 45.83% 45.83% -

112,585

120,000

105,000

175,000

45.83%

8,381 234,564 242,945

4,000 100,000 104,000

823 100,690 101,513

2,000 100,000 102,000

-50.00% -1.92%

30,375

46,375

33,862

106,862

130.43% -

30,375

46,375

106,862

130.43%

33,862

131

ECONOMIC DEVELOPMENT CORPORATION

Fiscal Year 2022 Proposed Budget

132

The Forney Economic Development Corporation (FEDC) is funded by a ½ cent local sales tax. The FEDC works to attract desirable new business and support existing businesses through business retention efforts. This is accomplished by working closely with the City of Forney through the City Manager’s Office alongside the other City departments, community organizations, and private sector entities. The Economic Development Corporation maintains two funds: ► Economic Development Corporation Operating Fund ► Economic Development Corporation Capital Improvement Fund

EDC FUND STATEMENT Beginning Fund Balance Revenue Operating Revenue Prior Period Adjustment Transfers In EDC Capital Improvements Total Revenue Expenditures Operating Expenses Debt Service Fund Balance Transfers Out Utility CIP Fund CIP Fund General Fund EDC Capital Improvements

Debt Service Reserve Committed for Future Projects Ending Fund Balance

Fiscal Year 2022 Proposed Budget

History

Projected

2020 Actual

2021 Budget 2021 Revised

5,193,495

Budget 2022 Budget

9,006,625

% Change

4,450,189

6,576,957

2,723,553

2,534,316

3,498,862

3,317,853

2,723,553

2,534,316

3,498,862

3,317,853

23,161 23,161

2,723,553

2,534,316

3,522,023

3,317,853

30.92%

933,629 80,778 1,014,407

1,007,542 176,528 1,184,070

791,917 176,528 968,445

1,010,700 182,278 1,192,978

0.31% 3.26% 0.75%

6,902,641

5,800,435

9,130,535

11,131,500

91.91%

325,684 325,684

123,910 123,910

96,000 96,000

-22.52% -22.52%

194,821 6,382,136

194,821 5,000,000 481,704

194,821 5,000,000 3,811,804

194,821 5,000,000 5,840,679

1112.50%

102.39% 30.92% 30.92% -

133

EDC FUND REVENUE Sales tax revenue makes up 98% of the Economic Development Corporation’s revenue. The remaining 2% is categorized as Miscellaneous and includes revenue from downtown property leases and sales of EDC owned properties. REVENUE SUMMARY Tax Revenue Interest & Penalty Miscellaneous Economic Development

Projected

History 2020 Actual

2,520,493 10,508 192,552 2,723,553

2021 Budget

2,424,106 10,000 100,210 2,534,316

Budget

2021 Revised

3,034,588 680 463,594 3,498,862

2022 Budget

3,247,009 1,000 69,844 3,317,853

% Change

33.95% -90.00% -30.30% 30.92%

Tax Revenue - $3,247,009 In May of 1994, Forney citizens approved an additional 1.00% sales tax for the purpose of creating and funding the Forney Economic Development Corporation (EDC) and property tax reduction. Half of the approved 1.00% funds the FEDC and the other half is retained by the City in order to offset property taxes. Estimates for sales tax collections are based on prior year collections and trends. Over the past five years, sales tax revenues have increased an average of 12% per year. This continued increase is indicative of a growing local economy, resulting from continued population growth within the city limits and the surrounding area, as well as increased commercial development. The Fiscal Year 2021 budget assumed no increase in sales tax revenue, and actual collections are trending toward an increase of 22% over the prior year. The 2021 budget was prepared cautiously with the expectation that COVID would decrease revenue and expenses would need to be lowered in order to offset the revenue loss. This has not proven to be the case and as citizens stayed closer to home and worked remotely, our sales tax reciepts have increased. The Fiscal Year 2022 budget remains conservative and projects a 7% increase over 2021 yearend projections. Interest & Penalty - $1,000 Interest revenues have decreased steadily since 2020. The Federal Reserve made two emergency rate cuts in March 2020 in response to the coronavirus pandemic, moving the federal funds rate to a target range of 0-0.25 percent.

Fiscal Year 2022 Proposed Budget

134

Miscellaneous - $69,844 Miscellaneous Income for the EDC includes lease income, sale of properties, and minor, onetime payments made for small events or training courses hosted by the Forney Economic Development Corporation. The Fiscal Year 2021 Revised budget assumes the sale of the building 215 S Bois D’ Arc, currently being leased by Eno’s restaurant, to the owner of that establishment. This reduces the 2022 Lease Income line item for Fiscal Year 2022.

EDC USE OF FUNDS Salary & Benefits make up 29% of the Economic Development department’s spending. As with all other city staff, a cost-of-living adjustment of 3% and a possible merit increase of 2% are included in the 2022 budget. Health insurance costs are budgeted at a 12% increase. Services & Supplies make up 30% of the total EDC expenses. This includes sales tax abatement agreements, the expenses associated with daily activities of the office and with trade shows and promotions. Maintenance & Repair expenses are 39% of the EDC’s spending and the category is composed of expenses associated with FEDC owned properties and programs that encourage and assist in local business development.

Expense Summary Salary & Benefits Services & Supplies Maintenance & Repair Miscellaneous Economic Development

Fiscal Year 2022 Proposed Budget

History 2020 Actual

223,266 220,134 425,799 64,430 933,629

Projected 2021 Budget

314,480 272,062 396,000 25,000 1,007,542

2021 Revised

112,418 227,725 410,000 41,775 791,918

Budget 2022 Budget

290,950 298,750 396,000 25,000 1,010,700

% Change

-7.48% 9.81% 0.31%

135

The Economic Development Corporation issued debt in Fiscal Year 2013 for the purpose of improving the downtown area. While the EDC’s debt was previously represented as being accounted for in a separate fund, in actual practice this debt is accounted for In the EDC’s operating fund as a separate department.

ECONOMIC DEVELOPMENT DEBT SERVICE

2013 Sales Tax Revenue Bonds

Original Issue Amount: $2,000,000 Original Date of Issue: September 19, 2013 Maturity Date: August 15, 2032

Series 2013 EDC Sales Tax Revenue Bonds Fiscal Year Principal Interest Total Payments 2022 110,000 72,278 182,278 2023 115,000 67,603 182,603 2024 120,000 62,715 182,715 2025 125,000 57,615 182,615 2026 130,000 51,990 181,990 2027 135,000 46,140 181,140 2028 145,000 39,728 184,728 2029 150,000 32,840 182,840 2030 160,000 25,340 185,340 2031 165,000 17,340 182,340 2032 175,000 8,925 183,925 1,530,000 482,513 2,012,513

Use of Bond Proceeds “Proceeds from the sale of the Bonds will be used (i) for the acquisition, improvement and equipment of land, buildings and facilities to lease or sell to businesses in downtown Forney and beautification improvements in downtown Forney, (ii) for funding a debt service reserve fund, and (iii) to pay the costs of professional services including the costs of issuance of the Bonds.” 211 South Bois D’ Arc Renovation – Groovy’s Boutique Total Project Cost: $171,312 2013 Bond Allocation: $147,312 Completion Date: December 2014

106 East Main Street Renovation Total Project Cost: $231,032 2013 Bond Allocation: $231,033 Completion Date: December 2015 215 South Bois D’ Arc Finish Out Total Project Cost: $247,615 2013 Bond Allocation: $247,615 Completion Date: March 2016

215 South Bois D’ Arc Renovation Total Project Cost: $217,859 2013 Bond Allocation: $175,859 Completion Date: February 2015 The Economic Development Corporation Capital Improvement Fund accounts for property purchases and improvements to existing EDC facilities and infrastructure. Fiscal Year 2022 Proposed Budget

136

No new capital projects are planned for Fiscal Year 2022.

ECONOMIC DEVELOPMENT CAPITAL PROJECTS

Beginning Fund Balance Revenue Miscellaneous Income Interest Income Transfers In Economic Development Fund 2013 EDC Revenue Bonds General Capital Improvement Fund

Total Revenue

History

Projected

2020 Actual

2021 Budget 2021 Revised

16,748

Transfers Out EDC Fund EDC Debt Service Reserve

Ending Fund Balance

Fiscal Year 2022 Proposed Budget

23,161

2022 Budget

% Change

6,413 6,413

6,413

Expenditures Construction In Progress Fund Balance

Budget

23,161

23,161 23,161

23,161

137