General Fund Revenues

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.

REVENUE DETAIL

Tax Revenue Sales Revenue Court Fines Permits & Inspections Donations & Grants Parks & Recreation Interest & Penalty Miscellaneous Transfers In to General Fund

General Fund Revenue

History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 18,985,255 19,444,727 21,802,100 22,867,486 17.60% - 15,000 15,000 15,000 0.00% 197,433 180,560 182,560 181,100 0.30% 3,510,990 1,184,500 7,114,000 2,128,000 79.65% 306,407 - 1,634,717 - 0.00% 47,477 36,700 92,290 97,750 166.35% 3,117,026 250,000 67,200 50,000 -80.00% 458,903 50,000 74,424 79,500 59.00% 1,533,300 1,912,190 1,913,390 1,369,929 -28.36%

28,156,791 23,073,677 32,895,681 26,788,765 16.10%

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.

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

History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change

40101 Property Tax 40102 Property Tax Reduction

7,096,005 7,587,887 7,932,815 8,265,876 8.94% 2,451,488 2,424,106 3,034,588 3,247,009 33.95% 40106 Property Tax Penalties 27,570 15,000 34,000 15,000 40108 Delinquent Property Tax 79,582 15,000 70,000 15,000 40109 Fire Protection Income 717,931 1,116,522 1,116,522 1,305,583 16.93% 40110 Sales Tax 5,109,991 4,848,212 6,069,175 6,494,018 33.95% 40111 Mixed Beverage Sales Tax 50,137 58,000 45,000 45,000 -22.41% 40119 Franchise Tax 1,172,551 1,100,000 1,220,000 1,200,000 9.09% 40199 Payment in Lieu of Taxes 2,280,000 2,280,000 2,280,000 2,280,000 -

Tax Revenue 18,985,255 19,444,727 21,802,100 22,867,486 17.60%

$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.

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

6.25% 1.00% 0.50% 0.50% 8.25% 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 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

History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 40265 Payment Processing Fees - 15,000 15,000 15,000 -

Sales Revenue - 15,000 15,000 15,000 -

*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.

History Projected Budget

40300 Animal Control Income

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 9,805 8,500 10,500 9,000 5.88%

40301 Municipal Court Fines

165,756 150,000 150,000 150,000 40305 Local Traffic Fee 1,831 1,600 1,600 1,800 12.50% 40306 Unrestricted Time Pay Fines 2,111 2,000 2,000 2,100 5.00% 40307 Unrestricted DPS Warrant Fees 11,275 9,500 9,500 11,000 15.79% 40308 Unrestricted DPS Arrest Fees 5,683 7,000 7,000 6,500 -7.14% 40310 Judicial Support Fees 255 1,000 1,000 - -100.00% 40311 OMNI Fees 647 860 860 700 -18.60% 40313 Local Municipal Jury Funds 70 100 100 - -100.00%

Court Fines 197,433 180,560 182,560 181,100 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 Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change

40402 Inspection Income

28,544 20,000 30,000 30,000 50.00% 40410 Zoning & Platting Fees 116,358 50,000 205,000 85,000 70.00% 40411 Engineering Inspection Fees 409,159 80,000 650,000 80,000 40420 License & Registration Fees 8,520 6,500 7,500 7,500 15.38% 40421 Sign Permit Fees 15,100 10,000 12,000 13,000 30.00% 40423 Fence Permit Sales 3,375 2,000 2,000 3,000 50.00% 40424 Mechanical Permit Sales 9,400 6,000 9,500 9,500 58.33% 40425 Plumbing Permit Sales 9,800 10,000 12,000 10,000 40426 Sprinkler Permit Sales 15,760 20,000 45,000 20,000 40427 Swimming Pool Permit Sales 45,680 20,000 40,000 40,000 100.00% 40428 Miscellaneous Permit Sales 122,568 65,000 99,000 95,000 46.15% 40429 Building Permit Sales 2,580,736 750,000 3,500,000 1,000,000 33.33% 40430 Food Service Permit Sales 74,640 65,000 80,000 75,000 15.38% 40431 Fire Prevention Permit Sales 38,650 55,000 67,000 55,000 40432 Residential Fire Inspections 32,700 20,000 95,000 45,000 125.00% 40434 Rental Property Registration - 5,000 60,000 60,000 1100.00% 40435 Fire Marshal Plan Review - - 2,200,000 500,000 -

Permits & Inspections 3,510,990 1,184,500 7,114,000 2,128,000 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.

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

40601 Grants Received 40602 Donations Received

Donations & Grants

History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 298,519 - 1,627,972 - 7,888 - 6,745 - 306,407 - 1,634,717 - -

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.

History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change

40700 Parks - Miscellaneous 40701 Pavilion Rental 3,870 200 200 - -100.00% 4,365 8,500 10,000 9,500 11.76%

40702 Amphitheater Revenue 40703 Concession Rental

(322) 5,000 (10) - -100.00% - 2,600 2,600 40710 Adult Softball Lights 13,645 10,000 10,000 - -100.00% 40720 Adult Softball Tournament Fees 13,919 3,500 9,500 - -100.00% 40722 Baseball Tournament Fees - - - 8,000 40723 Youth Softball Tournament Fees - - - 4,000 40730 Adult Softball User Fees 12,000 9,500 60,000 1,500 -84.21% 40731 Youth Soccer User Fees - - - 35,000 40732 Youth Baseball User Fees - - - 16,000 40733 Youth Softball User Fees - - - 5,000 40734 Dek Hockey User Fees - - - 4,500 40735 Youth Football User Fees - - - 7,500 40736 Sand Volleyball User Fees - - - 2,400 40737 Tennis User Fees - - - 750 40738 Cornhole User Fees - - - 1,000 -

Parks & Recreation 47,477 36,700 92,290 97,750 166.35%

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.

Miscellaneous Income - $50,000

40802 Investment Discount 40805 Interest Income

Interest & Penalty

History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 308,260 - 7,200 - 2,808,766 250,000 60,000 50,000 -80.00% 3,117,026 250,000 67,200 50,000 -80.00%

History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change

40900 Miscellaneous Income

78,745 50,000 65,000 75,000 50.00% 40904 ESD #6 Other Income 26,832 - - 40905 Sidewalk Improvement Program 5,152 - 5,000 4,500 40911 Sale of Assets 22,090 - - - 40917 Insurance Reimbursements 325,684 - 4,424 - 40924 City Hall Paver Sales 400 - - -

Miscellaneous 458,903 50,000 74,424 79,500 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 Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change

Utility Fund Operating Transfer COVID-19 1,750,243 1,785,880 1,785,880 1,270,329 -28.87% (366,502) - - -

Building Security Fund Juvenile Case Manager Fund

2,400 2,400 3,600 3,600 50.00% 27,888 - - - Economic Development Fund 119,271 123,910 123,910 96,000 -22.52%

Transfers In to General Fund 1,533,300 1,912,190 1,913,390 1,369,929 -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.