City of Richland Hills, Texas FY23 Adopted Budget

Edward Lopez Mayor

Curtis Bergthold Mayor Pro Tem Place 3

Douglas Knowlton

Councilmember Place 1

GW Estep

Councilmember Place 5

Javier Alvarez

Councilmember Place 4

Travis Malone

Councilmember Place 2

MANAGEMENT STAFF

City Manager

Department Heads

Director of Finance and Administration Services………………………………. Patricia Albrecht

Director of Public Works................…………………………………………………...Scott Mitchell

Library Director…………………………………………………………..……….Chantelle Hancock

Chief of Police………………………………………………………………..…...Kimberly Sylvester

Fire Chief……………………………………………… …..…Russell Shelley

Director of Parks and Recreation……………………………………………………..Jason Brown

City Secretary…………………………………………………………………….Lindsay Rawlinson

City Manager’s Office

Assistant to the City Manager-Development Services ………..………….Logan Thatcher (Code Compliance, Permits, Planning, and Economic Development)

Assistant to the City Manager-Support Services…………………………….Sheena McEachran (Communications and IT Services)

Candice Edmondson

This document was prepared by the FINANCE DEPARTMENT

Patricia Albrecht Director of Finance and Administration Services

Bernadette Gendron Senior Accountant

The Finance Department expresses its appreciation to all City departments for their assistance and cooperation in the preparation of this budget document

BUDGET INTRODUCTION

An introduction to the Adopted Annual Budget is presented in a series of narrative sections designed to give the reader relevant information regarding the City of Richland Hills’ budget process and fiscal environment.

 City Manager’s Budget Message

 Budget Summary

 Financial Assessment

 Goals and Strategies

 Core Values

 Budget Process and Calendar

City Manager’s Budget Message

September 27, 2022

To the Honorable Mayor, City Council and Citizens of Richland Hills, When we started the budget process in April, the goal was to develop a budget that maintained the City’s strong financial position, addressed strategic goals and priorities, and supported quality service delivery for ongoing programs and services. I am pleased to present a budget that touches on all these initiatives and continues to advance our community forward through strategic, thoughtful development.

The FY 2023 budget represents a collaboration between our elected officials, city staff and citizens. Public input was sought throughout the process beginning with a budget public forum in January, during the Council budget workshop in April and thru the four (4) budget discussions and public hearings held in August and September. We appreciate everyone who took the time to share their thoughts and ideas on the proposed FY 2023 budget. City Council also guided the development of the budget by expressing their goals and priorities for the coming year. The message was clear that City Council wanted this budget to prioritize infrastructure improvements, economic development, strategic capital investments, community engagement and workforce development.

INFRASTRUCTURE IMPROVEMENTS

Routine maintenance and replacement of public infrastructure – streets, water, wastewater, and storm drain – has been a long-term goal for the City. In November 2018, Richland Hills voters approved a 3/8 cent sales tax dedicated to the repair, replacement and maintenance of municipal streets and sidewalks. The sales tax was reauthorized by the voters in May 2022 demonstrating the citizens’ desire for continued progress on street improvements Since the inception of the sales tax, ten (10) streets have been reconstructed including necessary upgrades to underground utilities.

The FY 2023 budget includes funding for three (3) more street improvement projects:

• Reconstruction of Dover Lane, including water and storm drain improvements, from Scruggs Drive to Vance Road

• Design and reconstruction of Norton Drive from Richland Road to Evergreen Road

• Design of Magnolia Park Drive, including water, sewer and storm drain improvements, from Rosebud Lane to Mimosa Park Drive

With an estimated annual collection of $1.3 million, the Street Improvement Fund will support ongoing street replacement efforts for years to come. Future street projects are selected during the annual budget process based on street and underground utility conditions as identified on previous pavement and water/wastewater assessment reports.

In addition to street improvements, the FY 2023 budget will make significant contributions to upgrading City water infrastructure. With funds received through the American Rescue Plan Act, the City will spend $1.5 million dollars to add auxiliary power to well sites. This will enable the City

of Richland Hills to provide water service to customers in the event power is lost at these sites. The improvements also bring the City’s water system into compliance with Texas Senate Bill 3 which requires water providers to maintain 20 psi system wide and the ability to provide a minimum of 24-hours of redundant power in the event of an electric grid failure.

The FY 2023 budget also includes implementation of an Advanced Metering Infrastructure System (AMI) to replace the City’s mechanical water meters. With the new Advanced Metering System, water meter accuracy will increase, apparent water losses will decrease and the need for staff to manually read meters should be nearly eliminated. In addition, the new software system will create better tracking of actual water usage and make billing more consistent. Funding in the amount of $2,406,753 is included in the Utility Fund for the AMI project.

ECONOMIC DEVELOPMENT

The main goal of economic development is to improve the economic well-being and quality of life in a community. When the local economy is strong, more jobs are generated, poverty decreases, tax bases increase, public services expand and quality of life improves. With this in mind, the City Council has placed a strong emphasis on economic development now and into the future. In FY 2023 the City will be initiating two (2) key planning projects.

The first project is a focused development plan for the Glenview Drive corridor. Glenview Drive is one of the City’s primary commercial corridors and a major thoroughfare connector for the region. In 2022, the City was awarded funding from Tarrant County to complete road improvements on Glenview Drive that would enhance mobility and connectivity. The Glenview Drive Corridor Master Plan will expand on the proposed road improvements by providing a strategy to create a marketbased revitalization plan within the corridor.

The second initiative is an update of the City’s Comprehensive Plan which was adopted in 2014. A comprehensive plan is a long-range planning document that expresses the overarching vision, goals, objectives, policies and strategies for the future development, growth, and preservation of a community. It allows a community to be proactive to issues and changes over time and provides the overall foundation for land use regulations. Comprehensive Plans should be updated every 10 years and more frequently if a community is experiencing significant economic, social, or demographic changes. An updated Comprehensive Plan will incorporate the most current population, economic and financial trends affecting the City to guide future development.

CAPITAL INVESTMENTS

The City Council understands the strong correlation between economic growth and quality public facilities. The FY 2023 budget provides the necessary funding to complete several capital improvement projects including:

• Renovations to the Animal Services Center

• Continued implementation of the parks master plan

• Improvements at City Hall, Richland Hills Public Library, Law Enforcement Center and The Link Event and Recreation Center

• Construction of a masonry fence at the Public Works facility

• Completion of a space needs assessment and design for future use of the Public Works facility and Fire Administration Building

• Expansion of broadband at city parks and facilities

Implementation of a new ERP system

With over $2.3 million dollars dedicated to capital improvements in FY 2023, the City is continuing its efforts to provide excellent facilities and services that enhance the quality of life in Richland Hills.

COMMUNITY ENGAGEMENT

A top focus area for the City is enhancing communication and engagement with the community. The FY 2023 budget supports several initiatives aimed at increasing communication and engagement for both residents and businesses. Over the course of the year, the City will be launching a new community brand, upgrading its website platform, creating a digital monthly newsletter, increasing communication using multiple channels and offering quarterly business networking opportunities. The City will also be hosting its first State of the City meeting to highlight past accomplishments and discuss priorities for the upcoming year.

One of the most significant community engagement initiatives the City will implement this year is its citizen survey. A citizen survey is used to gain residents’ perspectives on local issues such as quality of life, development/growth, services provided by the City and future priorities by asking residents to:

• prioritize the City services and benefits they care about most

• rate current services and benefits provided by the City

Results from the citizen survey will be used to refine the City’s comprehensive master plan, evaluate future projects, and shape the City’s annual budget.

WORKFORCE DEVELOPMENT

The services provided to the community are only as strong as the people providing the service. With a declining workforce and increased competition in the labor market, the City is doing a number of things in FY 2023 to attract and retain a qualified workforce Starting October 1, 2022, non-emergency city services will move to a compressed work schedule offering most employees a 4-day work week. The City will also be conducting a market survey to ensure our salaries and benefits are currently aligned with the City’s adopted compensation strategy. The FY 2023 budget provides for an increase in public safety salaries and offers certification pay for qualifying employees. The budget also supports staff training and development and the City’s tuition reimbursement program.

CONCLUSION

The FY 2023 adopted budget has been developed in adherence to the City’s established financial principles and with the City’s strategic goals in mind. It prioritizes infrastructure improvements and capital investments. It implements initiatives to provide for long-term planning and financial sustainability. It emphasizes the importance of communication and community engagement. It addresses employee compensation and benefits to ensure that Richland Hills continues to be an employer of choice. The staff looks forward to the new fiscal year and all the opportunities that it provides.

Sincerely,

Candice Edmondson City Manager

BUDGET PRIORITIES

The priority for this fiscal year has been to maintain quality service while observing prudent spending practices and providing employees with an equitable compensation plan. The following highlights for the upcoming year that will help us accomplish this are:

• A balanced budget, with total revenues equal to or greater than total expenditures

• Property tax rate reduction from $0.558551 to $0.538885 cents per $100 assessed value

• Total City budget $28 million

• General Fund budget $8.7 million

• Increased and sustained funding for facilities improvements

• Increased and sustained funding for employee compensation

• Budgeted supplemental funding of $1.6 million ($248,960 for 3 new positions and certification pay, $1.4 million for one-time costs) to accommodate citywide departmental needs and operating impacts from Capital Improvement Program

SERVICE LEVEL CHANGES

Despite the ongoing challenges due to the pandemic and supply chain issues, the City’s property tax base and sales tax revenues continue to be strong, and this budget is presented with no material service reductions. Overall, services have been maintained, and in some instances, expanded, while reducing the property tax rate from $0.558551 to $0.538885 cents per $100 of property valuation. Examples of service level increases include the addition of a full-time custodian, a parks maintenance technician, and an assistant to the City Manager in charge of IT and communications. The budget funds a total of 94 full-time equivalent (FTE) positions, a 5% cost of living adjustment for general government employees, market adjustments and step increases for sworn personnel, and significant funding for increased infrastructure maintenance. Most of these staffing and service level increases are to meet the demands of our growing population, operational impact due to capital projects and the city’s vibrant growing economy.

Pension Plan

Texas Municipal Retirement System: The city is required to contribute to the Texas Municipal Retirement System (TMRS). Effective January 1, 2023, the city’s new monthly contribution rate will be 16.40%, an increase from the current rate of 16.36%.

MAJOR OPERATING BUDGET ITEMS

The total budget for all funds is $28 million. As illustrated by the data below, personnel costs are a major budget item for the City of Richland Hills. As a local government, the city is a service business which is highly dependent on personnel to deliver services to the public Major budget items include:

CHANGES BETWEEN PROPOSED BUDGET AND ADOPTED BUDGET

The major changes between the general fund proposed budget and general fund adopted budget were increases in salaries for public safety to keep up with the changing climate in public safety salary costs in the Metroplex (Dallas-Ft. Worth). There were also some costs that were finalized for insurance coverage from the City’s carrier, Texas Municipal League, that came in after the proposed budget was presented. The total cost difference was a $317,864 increase. Other funds changed as follows: Enterprise Fund proposed to adopted increased by $1,261 due to adjustments to the new certification pay costs, the Crime Control District Fund had a change of $4,232 mainly due to certification pay adjustments The TIF fund had an increase to the budget of $90,000 due to the addition of backlit street sign program along Baker Blvd. The Road & Street Fund had an increase of $40,000 from the proposed to final budget due to finalized costs for several street projects.

The ARPA fund had a decrease from proposed to final in the amount of $171,768 due to finalized EOY projections; and the Strategic Initiative Fund had an increase of $215,000 in the adopted budget due to the addition of the Animal Shelter Parking Lot Project. All other funds remained unchanged.

FINANCIAL PROGRAM

Total Combined Revenues: The total combined revenue budget for fiscal year 2022-23 totals $26,330,571 which is a $4.7 million or 22% increase from the prior fiscal year and is due in large part to higher property tax and sales tax revenues, multi-year capital projects, which include their remaining life-to-date funding in the prior year (EOY) and only new funding in the current year’s budget and funding from the American Rescue Plan.

REVENUES

Total Combined Expenditures: The total combined expenditure budget for fiscal year 2022-23 totals $28,024,449, which is a $8,870,981 or 46% increase from the prior fiscal year and is due to budgeting of capital expenditures from the American Rescue Plan Funds and the newly created Strategic Initiative Fund. This total also includes multi-year capital projects which are due for completion in FY2023. Expenditures are budgeted to be $1,693,878 more than revenues, primarily due to use of unassigned fund balance for capital projects. Operating budgets are balanced for fiscal year 2022-23.

Additional information on these budgeted numbers can be found in the individual funds’ page summary.

*General Fund expenditures do not include transfers to other funds from fund balance.

EXPENDITURES

General Fund Revenues: General Fund revenues for fiscal year 2022-23 are expected to total $9,318,263, an 11% increase from last fiscal year primarily due to growth in property tax and sales tax base. More details can be found in the General Fund section.

General Fund Expenditures: The General Fund is the general operating fund of the City. General Fund expenditures for fiscal year 2022-23 are projected to be $8,716,929, which is a 15% increase from last fiscal year 2022 end of year estimates. The overall increase is primarily due to several personnel vacancies in the Streets and Community Development departments, as well as a 5% salary increase in FY23.

*General Fund expenditures do not include transfers to other funds from fund balance.

Property Tax

General Fund property tax revenues for fiscal year 2022-23 are forecasted to total $3,123,995, an 11% increase over prior fiscal year (EOY), due to growth in the assessed property valuation. According to the Tarrant Appraisal District, the 2022 certified taxable value for the City of Richland Hills is $791,107,294. This represents an 11% increase in valuation over the 2021 certified taxable value. The overall property tax rate was decreased from $0.558551 to $0.538885 cents per $100 of property valuation.

Sales and Use Tax

General Fund sales & use tax revenues for fiscal year 2022-23 are forecasted to total $4,712,216, an increase of 12% over the prior fiscal year (EOY).

The City imposes a local sales tax of 2% on all retail sales, leases, rentals of most goods, as well as taxable services. Out of the 2%, 1% is for general purposes.

The Richland Hills Development Corporation recognizes 25% of sales tax as revenue, with the Crime Control District receiving another 0.37% and lastly, 0.37% going to the Road & Street Improvement Fund.

Water and Sewer Fund

The Water & Sewer Fund expenses for fiscal year 2022-23 are projected to be $6,880,544, a 65% increase over fiscal year 2022 EOY estimates. This is primarily due to a major project that is set to commence during FY 23. The water meter replacement project was approved by Council during FY 2021-22 as a much-needed improvement to the City's water metering system. This water meter replacement project will cost approximately $2.4 million. More details on the Water and Sewer Fund can be found in that fund's summary page.

Water and sewer rates will remain the same and no rate increases are planned for next fiscal year.

Drainage Fund

The Drainage fund expenses are forecasted to be $929,714, a 10.8% decrease over FY22 EOY. This is primarily due to a capital equipment purchase during FY 22

No major drainage capital projects are projected for FY 2022-23 from this fund.

Capital Projects Fund

The Capital Improvement Program (CIP) is an indication of the City’s priority to fund capital projects, ensuring Richland Hills will be positioned to meet the demands of its population and economic investment in our community. The CIP project expenditures for fiscal year 2022-23 are projected to be over $8,461,141 and are expected to exceed $5 million over the next 5 years. Project funding will address such areas as street improvements, repairing and replacing aging water and sewer infrastructure, a city-wide water meter replacement program, and continued improvement of our parks. More information, including listing of CIP projects can be found in the Capital Projects section.

Strategic Initiative Fund

The Strategic Initiative Fund is a newly created fund during fiscal year 2022-23. Council approved the creation of this fund to designate General Fund balance reserves in excess of the City required fund balance level and using them for one-time expenditures, for one time projects, such as infrastructure improvements, strategic planning, technology and capital acquisition.

The Strategic Initiative Fund (SIF), is a part of the Capital Improvements Program. Several projects are slated to be funded from the SIF such as, City Hall improvements, a new City wide ERP system and re-design of the old fire administration building amongst others. Total project expenditures are projected to be $691,000 during FY 23.

ARPA Fund

The ARPA Fund was established during FY 2021 to manage and record revenues received via the American Rescue Plan Act. Several projects were approved by Council during FY21 that aligned with the ARPA funding goals such as water infrastructure improvements, premium pay for essential employees during the pandemic and broadband projects amongst others. Total project appropriation during FY 23 is $1,596,773.

FINANCIAL ASSESSMENT

The City of Richland Hills, Texas continues to be financially strong. Over the years, through sound fiscal management, the City has positioned itself well to cope with growth, create a positive atmosphere for its residents and employees, and provide greater flexibility on budgetary issues. The city can balance revenues and expenses and continue to maintain a high level of services.

FUND BALANCE

One measure of a city’s financial strength is the level of its fund balance. The City’s estimated fund balance in the General Fund is projected to be approximately $2.7 million as of September 30, 2023. This balance exceeds the City’s required fund balance reserve of 25% of total General Fund expenditures. The City’s Enterprise Funds (Water/Wastewater & Drainage) are projected to have a combined cash and investments balance of approximately $3.9 million at the end of fiscal year 2022-23. The cash and investments balance in the Water/Wastewater Fund exceeds the 90-day reserve requirement established by the City’s financial policies. All other funds, meet or exceed the reserve requirements as set forth in the financial policies.

BOND RATINGS

The City’s bond ratings are further evidence of its financial strength. The City has received AA ratings by Standard & Poor’s Rating Services.

DEBT MANAGEMENT PLAN

The City of Richland Hills enjoys favorable bond ratings due not only to solid fund balances, but also from adoption of, and adherence to, the debt management plan adopted by the City Council. The target length of maturity of the City’s long-term debt is not to exceed 20 years or the life of the asset In addition, the total debt service requirements in any fiscal year should not generally exceed twenty five percent (25%) of total expenditures/expenses. Details can be found in the Debt Service and Financial Policies section.

ECONOMIC GROWTH & OUTLOOK

The City of Richland Hills is enjoying the benefits of strong economic growth in the North Texas region and the state. Despite the uncertainty of the pandemic and supply chain issues, the City has continued to increase its sales tax and property tax revenues year over year. City staff worked hard to balance the budget and develop a fiscally prudent plan, which will continue to provide a wide range of quality public services for the community and continue with the commitment to quality of life through improvements to infrastructure and its parks system.

The City of Richland Hills, Texas enjoys an unmatched location. It is located in the highly sought-after, “MidCities”, in the middle of Dallas and Fort Worth. Encompassing approximately 3.14 square miles in Northeast Tarrant County, the city borders the NE corner of Fort Worth, is less than 20 miles from DFW International Airport and less than 30 miles from downtown Dallas. The city fronts State Highway 183, State Highway 121 and State Highway 26 Easy access is provided to each via Interstate 820. Railroad access is currently available to the city's largest industrial park and commuter rail connects Richland Hills to downtown Fort Worth and Dallas. Very few other communities in the Metroplex can offer this combination of intermodal access to the Dallas/Fort Worth Metroplex.

Quality of life, economic development, and a safe community are some of the most important elements for the City of Richland Hills. During fiscal year 2022, two new townhome developments were approved by Council along Baker Boulevard, the City’s Tax Increment Fund or TIF. The Baker Landing Townhome development is a 69 unit single-family development. Another townhome project is RC51 Townhomes. This project will include 51 single-family homes in the TIF. These new housing developments will bring additional property tax and water/sewer revenues to the City, in addition to providing a much needed “face lift” to the boulevard.

Several new businesses made their start in the City during the past fiscal year, including a new health manufacturing company, locally owned Mexican restaurant, a new donut shop and a locally owned laundromat. The City prides itself on the small town feel with big city convenience.

Major businesses within the City of Richland Hills

TOP 10 COMPANIES

Richland Hills is located within the Birdville Independent School District with one elementary school and one middle school serving Richland Hills residents.

MAJOR SOURCES OF REVENUE

Sales Tax Revenue Trends

One major source of revenue for the City is sales tax. The city has a healthy sales tax base due to manufacturing, industrial and retail businesses within Richland Hills. Below is an illustration of sales tax revenue for all funds for the last ten fiscal years. It shows it broken down by fund with an average increase of 11% year over year:

Following are the General Fund sales tax revenue trends for the last 10 fiscal years:

Sales Tax

*FY22 are budgeted numbers

Property Tax Revenue Trends

Another major source of revenue is property tax. The City has experienced tremendous growth in its property tax valuation. Situated in the northern part of the State of Texas, Richland Hills, joins other Texas cities in popularity of migration to the city from other states. Below is the last 10 years of total property tax revenue and total General Fund revenue:

General Fund and Interest & Sinking Fund

*FY2022 are budgeted numbers

Other Sources of Revenue

Other sources of revenue for the city include mixed beverage taxes, franchise fees and hotel occupancy taxes. The table below lists the actuals for the last 10 fiscal years, along with budgeted numbers for EOFY 2022.

LONG TERM FINANCIAL PLANNING

City Council adopted the City’s financial policy that includes long term financial planning. This document serves as a guideline for budgeting and for managing the resources of the City. It is essential to keep focus on the long-term financial plan to monitor and adjust fiscal policies as needed and plan for needed capital and service demands. City staff prepares and updates this five-year financial plan annually in preparation for developing suggested budget policies for City Council consideration and to ensure alignment with City Council goals. It is intended to provide a frame of reference to help evaluate the City’s financial condition and help assess financial implications of current and proposed budgets, programs, and assumptions. The City’s official financial policy is included in the Appendices section. The financial policy includes a section on the Capital Improvement Program. The Capital Improvements Program (CIP), a five-year plan, funds major capital improvements that will provide adequate infrastructure and facilities for new citizens and new business development.

CONCLUSION

As the City’s needs continue to grow, the focus remains on maintaining a long-range financial plan and managing the demand to the City’s operations. The budget for fiscal year 2022-23 is committed to Council’s policy of preserving Richland Hills’ strong financial position by maintaining strong fund balances and reserves, recommending a balanced budget, maintaining current programs, and making decisions within the context of our long-range financial capacity and debt management plan. The Fiscal Year 2022-23 Annual Budget highlights the City’s commitment to meet and exceed the community’s highest priority expectations while continuing to meet its citizens’ needs at the lowest possible cost.

VISIT US

Information on the City’s finances, budget, debt, performance, and other items can be found on the web https://www.richlandhills.com/170/Finance

Learn more about our city by also visiting us at: Facebook: https://www.facebook.com/RichlandHillsCityHall/

BUDGET PROCESS & CALENDAR

The City’s budget is a complex document and represents the culmination of months of preparation and discussion among Council, City Manager, Director of Finance and Administration Services, and the departments regarding the best ways to provide services to the community at the greatest value. This budget was developed to be consistent with the City’s high performing philosophy, which strives to simultaneously deliver high product and service quality, outstanding customer value and sound financial performance. City departments worked very closely with the Finance Department to draft a budget that fit within revenue expectations and key departmental goals.

As required by the City’s Charter, the proposed budget was provided to the city council by July 30th. Concurrently, copies of the proposed budget are made available to the public on the City’s website and on file at the City Secretary’s Office. The City Council considers the proposed budget and provides public hearings where public input regarding the budget programs and financial impact is heard.

The budget is formally adopted by the City Council during the regular City Council meeting in September. The budget goes into effect on October 1.

Budget Key Dates

Performance Measurement

The management of the City of Richland Hills believes that it is important to not only plan for and provide adequate levels of quality service, but to also provide a means of measuring and reporting the result of its efforts. The Finance Department provides monthly reports that discuss how each department is performing which ultimately can determine the value of programs and opportunities for improvements.

Due to the nature and complex operation of each department, it is next to impossible to provide a single or even a few statistical measures. However, funding comparisons provide a broad view of changes in level of service for the departments. Past year accomplishments and current FY23 Objectives are clearly stated in each department’s section.

BUDGET OVERVIEW

An overview of the Annual Budget is presented in a series of tables, charts and graphs designed to give the reader an overall understanding of the budget.

 Fund Structure

 Combined Budget Summary

 Fund Summaries

 Revenues, Expenditures and Fund Balances

 Where the Money Comes From – By Revenue Type

 Where the Money Comes From – By Fund Type

 Where the Money Goes – By Fund Type

 Where the Money Goes – By Function

 Property Tax Valuation and Tax Rates

 Major Revenues

FUND STRUCTURE

• Court Security Fund

• Court Technology Fund

• Crime Control District Fund*

• Hotel Occupancy Tax Fund

• KRHB Fund

• Tax Increment Fund

• LINK Operations Fund

• LINK Replacement Fund

• Emergency Mgmt. Fund

• Oil & Gas Fund

•Capital Projects Fund*

•Road & Street Fund*

•Vehicle Replacement Fund

•ARPA Fund

•Strategic Initiative Fund

April

*Indicates major fund, all others considered non-major funds

Governmental funds use the modified accrual form of accounting, while Enterprise Funds are full accrual funds.

COMBINED BUDGET SUMMARY-ALL FUNDS

FUNDS SUBJECT TO APPROPRIATION

All funds, both governmental and proprietary, are subject to appropriation. The City's financial policy requires a 25% reserve on expenditures for the General Fund and 90 days for the Water and Wastewater Fund. The fund balances for General Fund and Water and Wastewater Fund for FY 2022-23 are estimated to be $2,659,203 and $3,364,218 respectively. The unassigned fund balance for General Fund and Water and Wastewater Fund are $2,659,203 and $3,364,218. All projected changes in fund balances are considered as normal.

CITY OF RICHLAND HILLS ANNUAL BUDGET

COMBINED BUDGET SUMMARY-ALL FUNDS

FUND SUMMARIES

Major Governmental Funds

General Fund is the operating fund of the City. This fund is used to account for all financial resources not accounted for in other funds.

Debt Service Fund is used to account for the accumulation of financial resources for the payment of principal, interest and related costs on general long-term debt paid from taxes levied by the City.

Capital Projects Fund is used to account for the acquisition or construction of streets, facilities and other infrastructure projects being financed from general obligation bond proceeds, grants, impact fees, or transfers from other funds.

NON-MAJOR - Other Governmental Funds is a summarization of all non-major governmental funds and consists of Special Revenue funds, Richland Hills Development Corp., and Other Governmental Funds.

COMBINED SUMMARY OF REVENUES AND EXPENDITURES AND CHANGES IN FUND BALANCE

Fiscal Year 2022-23 Annual Budget (with Comparisons to 2021-22 Budget, 2020-21 & 2019-20 Actual)

FUNDS

*Adjustments are transfers out from fund balance

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

COMBINED

SUMMARY OF REVENUES AND EXPENDITURES AND CHANGES IN FUND BALANCE

Fiscal Year 2022-23 Annual Budget (with Comparisons to 2021-22 Budget, 2020-21 & 2019-20 Actual)

*Adjustments are transfers out from fund balance

Major Proprietary Funds

Water and Sewer Fund is used to account for the operations of the water and sewer system.

Drainage Fund is used to account for the operations of the drainage system.

REVENUES, EXPENDITURES & CHANGES IN FUND BALANCES

Changes in Fund Balance

General Fund- Management’s intention is to keep the fund balance above the reserve requirement of 25%. This fiscal year, Council approved a one-time transfer of $2.4M out of this fund balance into the newly created Strategic Initiative Fund. The $2.4M transfer out will not affect the minimum reserve requirement balance in the General Fund. More information is available in the individual fund descriptions.

Water/Sewer Fund- Council approved a transfer out from the Water/Sewer Fund balance in the amount of $1M to fund the water meter replacement project scheduled this fiscal year. Management strives to keep 90 days reserve in this fund as per City policy. This one time, transfer from fund balance, will not affect that requirement as this fund has more than 90 days cash in reserves.

Drainage Fund- slight decrease and no major expenses budgeted from this fund. This fund does have debt service payments budgeted.

Debt Service Fund- slight increase to the fund balance based on higher property tax collections for FY23.

Special Revenue Funds- a decrease in fund balance due to transfers out for capital projects in FY23.

Capital Projects Funds- increase in fund balances due to transfers in, mainly from general fund for the Strategic Initiative Fund However, as capital projects are completed, the fund balance will decrease significantly.

WHERE THE MONEY COMES FROM - BY REVENUE TYPE

FY2022-23 Total Revenues $30,321,062

Changes in Major Revenue Type

Property taxes and Sales and Use Taxes present an upward trend with the continued increase in property tax valuations and major sales tax payers within the City. More information regarding revenue trends can be found in each funds’ description section.

WHERE THE MONEY COMES FROM - BY FUND TYPE

Changes in Major Fund Type

**Total excludes transfers in/out

General Fund is the City’s operating fund. This fund provides a broad spectrum of programs and critical public safety services, such as police and fire. In addition, it provides funding for parks and recreation, public works and administrative services. Most of the revenue is obtained from property taxes and sales taxes. The 11% growth is due to an increase in property tax revenues and sales tax revenues.

Water/Sewer Fund provides water and sewer services to the city. Most of the revenues are obtained via charges for services. The 43% revenue increase is due to a $1,000,000 transfer in from fund balance for the Water Meter Replacement Project approved by Council.

Drainage Fund is for drainage fees collected through a customer’s water bill. The drainage fund provides funding for the maintenance of the City’s drainage system and for major capital items as necessary. The change is negligible.

Debt Service Fund is used to collect property taxes and to pay the City’s debt service relating to Certificate of Obligations, General Obligation Bonds and Tax Notes and any debt secured by property tax revenues. There is a slight decrease in revenues due to a lowered tax rate and lowered I&S rate. The rate was lowered to $0.125257 from $0.145257.

Capital Projects Funds are funds used to account for all major capital improvements that are financed by the City’s general obligation bonds, revenue bonds, intergovernmental grants, transfers from other funds and other designated resources. The 51% increase in revenues is due to an increase in transfers from other funds including, ARPA funding, the new Strategic Initiative Fund transfer in and remaining life-to-date budgets that were rolled over from the prior fiscal year. Funds include the Road & Street Fund, Oil & Gas Fund and others.

Special Revenue Funds include the Richland Hills Development Corporation (RHDC), Hotel/Motel Occupancy Tax fund, Crime Control District Fund (CCPD), Tax Increment Fund and others. The 8% increase is mostly due to an increase in sales tax revenue projections for the RHDC and CCPD Funds.

WHERE THE MONEY GOES - BY FUND TYPE

**Total excludes transfers in/out

Changes in Major Fund Type

General Fund – Expenditures increased by 15% due to increased personnel costs. A 5% COLA increase was approved for all civilian employees, and a three STEP pay increase was approved for sworn public safety personnel to keep up with market pay. In addition, there is a 3% medical insurance increase and several increases in supplies due to inflation.

Water/Sewer Fund – The 65% increase in this fund is due to the water meter replacement project which is budgeted to cost $2.4 million. This project is partly funded with the $1 million transfer from fund balance and the rest is financing via private lending. This fund also approved a 5% COLA increase and there are increased costs to supplies due to inflation.

Drainage Fund has a 10% decrease in expenses due to the lack of capital purchases this fiscal year.

Debt Service Fund has a 3% increase in expenditures due to an increase in debt service payments over last fiscal year. No new debt was issued last fiscal year.

Capital Projects Funds are funds used to account for all major capital improvements. Capital Funds include the Road & Street Fund, Oil & Gas Fund and others. Total increase is 167% over FY22 due to the continuation of ARPA funded water line improvements and the Strategic Initiative Fund projects. More information on these projects is available in the fund descriptions in the Capital Funds section.

Special Revenue Funds include the Richland Hills Development Corporation (RHDC), Hotel/Motel Occupancy Tax fund, Crime Control District Fund (CCPD), Tax Increment Funds (TIF) and others. The 26% increase over last fiscal year is due to transfers out for capital projects from RHDC, CCPD and TIF funds. More information on these projects is available in the fund descriptions in the Special Revenue Funds section.

WHERE THE MONEY GOES - BY FUNCTION

*Transfers total includes $1M transfer in from Enterprise Fund Balance (excludes Debt Service)

Changes in Major Functions

General Government- the increase in this function is mainly due to salary increases, where civilians received 5% increase, the addition of one position in the administration department (Assistant to the City Manager) that is split with two other funds, a Full Time Custodian, that is a shared expense with the Link Fund, and general increase in operations costs due to inflation.

Police - this includes the Crime Control District expenditures, and the increase is mainly due to increases in personnel costs. An increase of approximately 15% was budgeted for sworn officers to keep up with market pay in the Dallas-Fort Worth area. The rest are normal inflationary increases in operational costs.

Fire - Sworn personnel were allotted an approximate 15% increase in salaries to keep up with market pay in the Dallas-Fort Worth area. The rest are normal inflationary increases in operational costs.

Library – this department received a 5% salary increase along with general government employees.

Development – this function includes the RHDC fund’s costs along with the Community Development department. The 47% increase is mainly due to personnel vacancies in FY 22 and the addition of a Parks Maintenance Technician position that is shared with the Parks department.

Parks – the 12% increase is mostly due to the new Parks Maintenance Technician that is shared with the RHDC. It is also due to the 5% increase in pay to civilian employees.

Public Works - the large increase of 107% is due to the following:

• the creation of the Strategic Initiative Fund which includes funding for several capital projects

• water line improvements funded with ARPA funds

• continuation of capital projects that are carried over from FY22 which include street improvements and parks projects

• the water meter replacement program that was approved during FY22 and will be complete during FY23.

Transfers – During FY23, Council approved a transfer out from the General Fund to the newly created Strategic Initiative Fund (SIF) in the amount of $2.4 million. This is a result of an initiative by City Council to take excess, unreserved fund balance in the General Fund and utilize it in the new SIF fund for one-time expenses. It allows for excess funds to work as one time revenue to fund needed projects and avoid borrowing money for these projects. These projects can include such items as capital acquisition, community enhancements, infrastructure maintenance, renovations, and technology. The 506% increase over FY22 also includes transfers out from CCPD, RHDC and the Water/Sewer Fund for additional capital projects.

The pie chart shows the totals, and percentage of grand totals, by function The table below summarizes each function.

*Transfers total includes $1M transfer in from Enterprise Fund Balance

MAJOR REVENUE SOURCES

Major revenue sources, assumptions and trend analysis for all funds are provided in the following pages. The revenues in aggregate can be found in the Fund Summaries and the Revenues by Type pages.

PROPERTY TAX

The City’s property tax is levied based on appraised value of property as determined by the Tarrant Appraisal District. The Tarrant County Tax Assessor bills and collects the property taxes for the city.

The property tax rate for fiscal year 2022-2023 is $0.538885 per $100 assessed valuation, which consists of $0.413628 for operating and maintenance costs recorded in the General Fund and Tax Increment Fund (TIF) and $0.125257 to fund principal and interest payments on bond indebtedness recorded in the Debt Service Fund. The property tax rate is two cents lower that the fiscal year 2021-2022 rate of $0.558551. Historical rates and valuations are shown in the previous page.

Outlook

Total property tax revenues are projected to increase over the prior year by $319,391 or 11% primarily because of an 11% increase in certified values and new properties added, according to the certified tax roll from the Tarrant appraisal district. The outlook for future years is positive as more properties are built due to the two townhome developments currently in progress along with an increase in area certified values. Property taxes account for 34% of the City’s total revenue.

MAJOR INFLUENCES

Factors affecting property tax revenues include population, development, property value, tax rate and tax assessor appraisal

SALES AND USE TAX

The total sales tax collected in the City of Richland Hills is 8.25%. The City receives 2% of sales tax with the following allocations: 0.25% is allocated to the Richland Hills Development Corporation, 0.37% is allocated to the Crime Control Prevention District and 0.37% goes to the Street and Road Improvement Fund.

The city imposes a local hotel occupancy tax of 7 percent of the cost of a hotel room. The state hotel occupancy tax rate is 6 percent.

OUTLOOK

Sales and use tax revenues are projected to increase over the prior year by $495,807 or 12% because of increased sales in the industrial and commercial sectors within the City. Sales and use taxes account for 31% of the City’s total revenue. Growth is anticipated to continue in future years.

MAJOR INFLUENCES

Factors affecting sales & use tax revenues include manufacturing, retail sales, economy, and consumer price index.

FRANCHISE FEES

The City imposes a 5% franchise fee on utility companies for rights-of-way use. These include gas, electricity, telephone, and cable television. The City collects an 8% solid waste franchise fee from the current solid waste provider.

OUTLOOK

Franchise fees revenues are projected to remain stable for the foreseeable future and are dependent on each utility company’s annual gross revenues. Franchise fees account for 2% of the total City’s revenues.

MAJOR INFLUENCES

Factors affecting franchise fees include population, utility gross sales, rate of charges and weather fluctuations, which affect electricity, gas, cable tv and solid waste revenues.

LICENSES AND PERMITS

Licenses and permits are required of any business or person conducting certain activities within the city.

Major licenses and permits include building permits, fire code permits, building registration fees and electrical permits.

OUTLOOK

Licenses and permits account for 0.8% of the total revenues for the City of Richland Hills. The highest year for permits revenues, occurred in FY 2020 when an elementary school was built. The City anticipates an increase in building permits beginning in FY 2023 due to the two townhome developments that are slated to start construction in the latter part of the fiscal year.

MAJOR INFLUENCES

Factors affecting licenses and permits revenues include population, development, construction, rate of charges and other activities.

FINES AND FEES

Fines and fees include traffic and non-traffic fines, warrants, arrest fees, library fees, animal control fees and the school crossing guard fees used to pay for the crossing guard at the local elementary school.

OUTLOOK

Fines and fees account for 1% of total City revenues. Total revenues from fines and fees are budgeted to be lower by 4.9% due to a decrease in traffic fines. During fiscal year 2019 and 2020, there were more traffic citations issued than in subsequent years.

MAJOR INFLUENCES

Major factors affecting fees are population and traffic activities.

CHARGES FOR SERVICES

Charges for services in governmental funds include all charges for services provided by the City such as ambulance, reports, animal vaccinations, and other miscellaneous charges. Charges for services account for 1.16% of total city revenues.

OUTLOOK

Revenue from charges for services in budgeted to increase by 7% mainly due to an increase in EMS fees and a small grant that is projected to be received during FY23.

MAJOR INFLUENCES

Factors affecting revenues in this section are rate of charges, EMS runs, population and general activity levels.

INTERGOVERNMENTAL

Intergovernmental revenues are grants from other governmental entities. The City receives grants for public safety, including the school resource officer, bullet proof vest grant, STEP traffic grant and community development projects, as well as federal grants, such as the ARPA grant. Revenues are recorded in various funds.

OUTLOOK

Total intergovernmental revenues are projected to be $1.9 million during FY23. This is mostly due to the ARPA funds that were received during FY 21 and FY 22 and will be expensed and recorded as revenue during fiscal

2023. The ARPA grant is slated to cover water infrastructure and broadband projects, amongst other approved uses. Intergovernmental revenue accounts for 11% of the total City revenue during FY 23. This amount will vary from year to year based on available resources.

MAJOR INFLUENCES

Major factors affecting grants are availability, as well as funding from the different granting agencies.

TRANSFERS

Transfers are transactions between funds of the primary government. They are repayments from the funds responsible for the expenditures to the funds that initially paid for them. These repayments can include general and administrative fees, capital replacements, facility improvements/renovations, debt service requirements, grant matches, and subsidies for capital projects.

OUTLOOK

Total transfer revenues are projected to be $3,990,491 for fiscal 2023. This includes the $2.4 million transfer from the General Fund to the new Strategic Initiative Fund. More information about this fund can be found in that fund’s section in the budget. The rest of the transfers include transfers into the Capital Projects funds to fund the Law Enforcement Center remodel, the annual Link operations fund transfer, parks, and community projects as well as a transfer from the Water/Sewer fund for a masonry fence around the public works building in the amount of $80,000. The increase in transfers this fiscal year is due mainly to carryover of CIP projects from the previous fiscal year, the ARPA transfer for the commencement of the water line project, and the creation of the new Strategic Initiative Fund.

MAJOR INFLUENCES

Factors affecting transfers are capital projects, debt, and rates of charges.

The General Fund is the general operating fund of the City of Richland Hills. This fund provides for a variety of programs and critical services such as police, fire, library, parks and recreation, streets department, municipal court, animal control and administrative services.

The General Fund derives most of its revenue from property taxes and sales and use taxes along with other miscellaneous revenue described below.

 Fund Description and Summary

 Statement of Revenues and Expenditures

 Overview of Revenues and Expenditures

 General Fund Departments

GENERAL FUND DESCRIPTION AND SUMMARY

Fund Summary

The General Fund is the main fund of the city and is used to account for all revenues and expenditures not accounted for in other designated funds It receives a varied amount of revenues, and it finances a wider range of governmental activities than any other fund. The General Fund is primarily supported by property tax, sales & use tax, franchise fees, license and permit fees, and court fines. General Fund expenditures support the following major functions of the City: public safety, community development, public works, parks, library, and administration.

Statement of General Fund Revenues

Fiscal Year 2022 End of Year Financial Performance

The FY22 Adopted Budget compared to the EOY estimate shows an overall positive change in the amount of $735,413 or an 11% increase in budgeted revenue vs. EOY estimates. This is mostly due to an increase in sales tax revenues collected during the year, which exceeded budgeted revenues by $716,409. The increase in sales tax revenues is mostly due to commercial and industrial sales within the City. Sales tax forecasting for FY23 is equally positive with budgeted sales tax revenue and projections to increase by 12%. The industrial and commercial sales tax collections continue to rise year over year due to the construction industry and especially where electrical and plumbing suppliers are concerned.

Fiscal Year 2023 Budget

For the Fiscal Year 2023, total revenues for the General Fund are budgeted at $8.4 million. That is an increase of 11% over FY22 end of year estimates. The main reason for the increase is an increase of 11% in certified property values and a projected 12% increase in sales tax revenue.

Statement of General Fund Expenditures

Fiscal Year 2022 End of Year Financial Performance

End of Year (EOY) estimates for the General Fund Expenditures are 3.5% higher than the original budgeted

numbers. This is mostly due to the increase in overtime hours in public safety and an extra pay period that had to be accrued to FY22. General fund balance remains strong at year end at $4,918,360 which represents 65% of estimated expenditures. Current City policy requires a 25% fund balance.

Fiscal Year 2023 Budgeted Expenditures

For the FY 2023, the total budgeted expenditures are $ 8,716,929 or a 15% increase in expenditures as compared to FY 2022. The main budgetary items are a 5% salary increase to all civilian personnel and a 15% increase and adjustment to the STEP plan to all sworn public safety to keep the City competitive for public safety salaries as compared to surrounding cities. The General Fund also created three new positions for FY23:

Assistant to City Manager Dept. 12 Administration (funding shared with Water/Sewer Fund)

Parks Maintenance Tech Dept. 19 Parks Grounds (funding shared with RHDC)

Full time Custodian Dept. 30 Shared Services (funding shared with LINK Fund)

Transfers out to other funds total $2,860,491 are due to the creation of the new Strategic Initiative Fund ($2.4M) and other transfers out as shown below:

Fund balances at the end of FY2023 are projected to be $2,659,203 or 31% of budgeted expenditures. This is well above the 25% requirement per city policy.

GENERAL FUND DEPARTMENTS

 MUNICIPAL COURT

 ADMINISTRATION

 POLICE

 FIRE

 STREETS

 LIBRARY

 PARKS AND RECREATION

 PARKS - GROUNDS

 COMMUNITY DEVELOPMENT

 ANIMAL CONTROL

 LEGISLATIVE

 SHARED SERVICES

Mission Statement

The mission of the Richland Hills Municipal Court is to provide equal and impartial justice under the law; and to ensure that all defendants are treated in a professional, courteous, and efficient manner.

FY 2021-2022 Accomplishments

 Collected $406,931 in fines/court costs

 Filed 2,274 new cases; disposed 2,475 cases

 Issued 1,828 warrants; cleared 1,404 warrants

 Transitioned court operations from a remote environment back to an in-person environment

 Eliminated the backlog of cases due to COVID-19

 All required training completed by staff

 Completed destruction of closed cases filed prior to October 2021

 Significantly reduced collection cases by age purging, dismissing, and re-working cases

FY 2022-2023 Objectives

 Implement Tyler Payments merchant processing and reducing credit card fee expense

 All staff to complete required training

 Marshal to complete warrant audit

CITY OF RICHLAND HILLS - GENERAL FUND (FUND 001)

The Administration department consists of the City Manager’s Office (CMO), Human Resources and the Finance department Mission statements for each of the departments are below. Goals and accomplishments and staffing grids are presented as a whole department

Mission Statement-City Manager’s Office

The City Manager serves under the direction of the City Council and is responsible for making recommendations to the Council regarding programs and policies and developing methods to ensure an effective and efficient operation of City services. The City Manager’s Office is responsible for the following core services:

• Facilitate good governance and provide strategic leadership to the municipal organization

• Ensure a strong and sustainable financial condition for the City

• Promote citizen involvement and governmental transparency

• Develop a high performance organization

• Create an employee value proposition that supports the City's mission and strategic goals

Mission Statement-Human Resources

The City of Richland Hills Human Resources department is deeply committed to providing quality services to the community; creating a culture of professionalism, respect, dignity, and trust; and promoting honesty, integrity, commitment, and teamwork.

Mission Statement-Finance Department

The mission of the Finance department is to maintain the financial integrity of the City and to provide sound financial management and policies to internal as well as external customers and residents of the City of Richland Hills.

Director of Finance and Administration Svcs

Accounts Payable Tech (P/T)

Administration

FY 2021-2022 Accomplishments

 Successfully completed the implementation of new STEP program for sworn public safety personnel

 Successfully completed the new implementation of new pay plan for non-sworn personnel

 Awarded the Government Finance Officers Association (GFOA) “Certificate for Excellence in Financial Reporting” for the 11th consecutive year

 Achieved an unmodified (“clean”) opinion on the financial statements and single audit

 Implemented 50/50 benefits match for all dependent health insurance plans

 Maintained over 25% of fund balances in all funds

 Implemented and deployed “Employee Navigator” self-service portal for employees’ onboarding, open enrollments and updating employees’ files

 Begin design of new City website

 Begin City branding project

FY 2022-2023 Objectives

 Conduct new compensation plan study

 Issue RFP for new City-wide software (ERP)

 Begin implementation of new City-wide software (ERP)

 Award new bank depository contract to increase investment revenues

 Compile a comprehensive budget book/document and publish to the web

 Submit new budget book to GFOA for award

 Receive a “clean” audit for FY 2022

 Maintain high level of financial reporting to obtain the GFOA award for “Excellence in Financial Reporting” for FY 2022

 Maximize the City’s return on investments in accordance with adopted investment policies

 Complete City branding project and complete implementation

 Complete and implement new city website design

CITY OF RICHLAND HILLS ANNUAL BUDGET

FY2022-23

(Employee event-Food Truck Day)

Mission Statement

Our mission is to provide quality police services through partnerships with the community; to protect constitutional rights through ethical decision-making and to strive to provide leadership to the police profession because we believe in the dignity and worth of all people.

FY 2021-2022 Accomplishments

 Community Service Unit relaunched the Citizen Police Academy program and graduated Class #12.

 Several other community programs continued to grow such as Neighborhood Crime Watch, Texas Night Out, Police Week and CAPTURE (Citizens and Police Together Utilizing Resource Evidence).

 Continued management of the new Enterprise Fleet Management Program with the initial rollout of new vehicles in 2022.

 Hiring and recruiting efforts resulted in all positions being filled at the end of 2022

 Continued professional development of staff to include a graduate from ILEA

FY 2022-2023 Objectives

 Increase proactive traffic enforcement to reduce traffic collisions.

 Reduce property crimes by increasing proactive enforcement efforts

 Increase community engagement by focusing on community programming initiatives

 Develop community awareness on illegal narcotic activity and increase citizen reporting for enforcement

 Identify and reduce narcotic-related crime through enforcement and deterrence efforts

 Collaborate with local, county, state and federal partners to address crime-concerns and develop enforcement actions

 Enhance evidence-based policing through utilization of obtainable advanced technology

 Increase directed traffic enforcement to address and reduce citizen concerns

 Identify and reduce homeless-related concerns by partnering with local outreach programs

 Increase mental health outreach and social programming in collaboration with the Crisis Support Unit

 Address property/evidence storage intake and release by 40%

 Streamline Records Unit processing by using available technology resources

 Enhance citizen reporting process by creating online form reporting

 Enhance sex offender monitoring and accountability efforts using proactive measures

 Improve Animal Services functionality and citizen delivery of service by renovating existing space.

 Increase Animal Services proactive enforcement and education with the community.

 Increase citizen volunteer participation by community engagement and recruiting

 Seek re-accreditation through the Texas Police Chief’s Accreditation Program by maintaining and enhancing existing standards

 Enhance criminal investigation solvability and service delivery by increased citizen follow-up, enhanced technology and collaboration with area agencies

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

* Grades are part of STEP plan for sworn public safety employees

Mission Statement

To provide effective, efficient and equitable fire suppression, emergency medical service and all hazards mitigation response to the residential and business community of Richland Hills while demonstrating proactive community risk reduction through fire prevention practices and public safety education.

FY 2021-2022 Accomplishments

 New ambulance ordered and in construction

 Full replacement of both outdoor warning sirens

 Implemented a retired flag disposal box at the fire station in cooperation with a local Eagle Scout candidate

 Offered our fourth Citizen’s Fire Academy with nine graduates

 Fire Marshal Brock completed the Police Academy and became certified as a law enforcement officer

 Replaced both Fire Administration vehicles

 Completed all required inspections, cleanings, and maintenance of protective gear, fire hose, fire pumps, ladders, and SCBA’s

 Assisted Code Compliance briefly with high grass at commercial occupancies during their staffing shortage

 Inspected all businesses for fire safety

 Flushed and tested all fire hydrants

 Purchased 5 new fire hydrants

 Completed more than 80 CO Inspections for new businesses

 Added more than 50 Knox boxes to businesses across the city

 Added fire suppression systems and fire alarms to three large occupancies across the city

 Completed more than 3,500 hours of training

 Continued our participation in NEFDA

 Answered 1,736 calls for service

 Attended more than 50 PR events across the city and gave out more than 1,500 pieces of fire prevention materials

 Assisted staff at The Link with the purchase and implementation of two new automatic external defibrillators (AED’s).

 Responded and mitigated two significant flooding events

 Responded to more than 1,700 emergencies and maintained a response time below five minutes more than 90% of the time

FY 2022-2023 Objectives

 Restore part time firefighter program to 15 personnel for staffing coverage

 Develop and implement a hybrid EMS transport model

 Always maintain three personnel on Engine 291

 Prepare and teach our annual Citizen’s Fire Academy

 Convert our records management software to a new platform

 Implement a new SOP revision and training software

 Identify opportunities to enhance our fire inspection program for greater fire safety awareness of all business owners

 Maintain an average response time of five minutes or less on 90% or more responses

 Maintain a turnout time of 60 seconds or less on 90% or more of responses

 Complete a minimum of 4,000 training hours across the department

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

 Continue our fire hydrant replacement program

 Inspect all commercial occupancies for fire code compliance and overall fire safety

 Flush and inspect all fire hydrants

 Maintain replacement program for protective clothing

 Complete all required cleaning, inspection, and testing of SCBA’s, protective clothing, fire hose, ladders, and fire pumps.

 Maintain vehicle maintenance program including regular preventative maintenance

* Grades are part of STEP plan for sworn public safety employees

PUBLIC WORKS-STREETS

Mission Statement

The mission of the Public Works Department is to improve, maintain, and preserve the infrastructure and environment of the City of Richland Hills. We strive to protect the health, safety, and welfare of its residents, business community, and visitors by providing quality services in a reliable, responsible, and effective manner that enhances public trust and pride within the community.

The Street department falls under the supervision of the Director of Public Works and includes all public works staff.

FY 2021-2022 Accomplishments

 Reconstruction of 3100-3200 blocks of Rufe Snow

 Reconstruction (including underground) of 6900 block Magnolia Park

 Engineering/design for reconstruction of Dover Lane

 241 Potholes filled/repaired

FY 2022-2023 Objectives

 Actual reconstruction of the 3200 block of Dover Lane

 Re-pave 3700 block of Norton Drive (partnership with Tarrant County)

 Engineer/design 6800 block of Magnolia Park

 Increase Pothole Program

 Street sweeping

 New street signage

Public Works Director Streets Water Productioon/Distribution (Enterprise Fund)

WW Collection/Treatment (Enterprise Fund)

Drainage Fund

*In FY2023, the position of Director of Neighborhood Services will be changed to Public Works Director

Mission Statement

Enriching our community through information, ideas, and inspiration.

FY 2021-2022 Accomplishments

 Provided 105 library events and programs that educate, inform, and entertain

 Implemented new programming for ages 55+

 Partnered with Birdville ISD and 4 other cities for the 8th Annual Birdville Reads Summer Initiative and hosted the event in our City

 Partnered with 5 other cities to create the Metroshare Community of Libraries

 Library Director Chantele Hancock served as Local Arrangements Co-Chair for the Texas Library Association Annual Conference

 Partnered with AARP to provide Income Tax Filing assistance to 172, saving clients over $25,000

 The Annual Report to the State Library was submitted a requirement for accreditation with the Texas State Library & Archives Commission

 The Library was awarded accreditation with the Texas State Library & Archives Commission for 2023

FY 2022-2023 Objectives

 Complete migration to new print management software allowing the implementation of mobile printing

 Increase the number of circulating hotspots to meet community needs

 Continue to offer a wide variety of programs for all ages

 Collaborate with the City of Richland Hills Parks Department to install and maintain a “Trail Tale” along the Oncor easement Hike & Bike Trail

 Collaborate with the City of Richland Hills Recreation Department on a City 75th Anniversary Oral History Project

 Continue to collaborate with other City departments on large signature events

Crafts Day at the Library

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

* designates a part-time position

PARKS AND RECREATION

The Recreation Department was created to execute community programs and events, as well as to support The Link’s operations and the Park System in the City of Richland Hills. Community programs mostly include non-revenue generating or service-focused classes and events at The Link or in the Park System. The Recreation Department hosts the Easter Celebration, July 4th Patriotic Parade and Red, White and YOU!, Fiesta de Herencia, Tricky Treat Trail, a Link based Texas Night Out program, Veterans’ Day Ceremony, and the Christmas Tree Lighting events annually.

Mission Statement

The Recreation Department will use fiscally responsible principles to bring the community together and promote an evolved level in quality of life with programs in education, fitness, recreation, the arts, and sports. Our facilities, parks and events will offer residents, businesses, and visitors, opportunities that offer a balance of high-quality service, and perception of experience.

FY 2021-2022

Accomplishments

 Reestablished the pre-COVID attendance at Lunch Bunch; between to-go and dine in registrants

 Set attendance records at most events

 Brought back the in-person Easter Celebration after it being the last no-contact drive through event

 Expanded Fiesta de Herencia in its second year

 Partnered with area businesses for the highest number of sponsorships ever

FY 2022-2023

Objectives

 Continue to grow annual events to a higher attendance level up to 6,000 people

 Improve our number of partnerships and sponsorships - $7,500

 Bring a small music series to the city

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

City Halloween Event-Public Safety Booths

PARKS GROUNDS

The Parks Department manages six park areas, including the Hike and Bike Trail, as well as most city medians, rights-of-way, and turf and landscaping around city facilities. The Parks Supervisor works to ensure all managed areas stay well-groomed and aesthetically pleasing. The Parks Department manages contracts for mowing, landscape management, irrigation, arboreal work, herbicide, and insecticide, as well as water chemical maintenance and water feature maintenance.

Mission Statement

The Parks Department will use its resources to continue to improve our parks and beautify our city. Safety will be the first priority; however, aesthetics will continue to be a high priority as well. Additionally, all installations and improvements will be geared towards long-term sustainability and efficiency of maintenance and upkeep.

FY 2021-2022 Accomplishments

 Completed the city’s first Hike and Bike Trail as a part of the greater metroplex Veloweb

 Added restrooms to Kate Baker and Creek Trail Parks

 Added a Food Truck Area to Creek Trail Park

 Added a new Parking Lot to Kate Baker Park

 Striped existing lots at Creek Trail and Kate Baker Parks

 Re-Started the City’s Adopt-a-Park Program with three groups sign on and two more considering

o All-Pro signed for Rosebud Park

o Richland Hills Resident Page FB Group is planning to begin at Creek Trail Park

o Local Boy Scout/Girl Scout group is planning to help at Kate Baker Park

 Worked with the Library and city business OES to add Lil’ Libraries at the Parks

 Began planting wildflowers and pollinator attracters along the trail with two small planting events

 Re-wrote the parameters for the landscape and mowing contract for Re-Bid

 Replaced the missing blades and head for the windmill at Windmill Park

 Worked with Smith Lawn and Tree to trim trees at Rosebud both for improved safety and better aesthetics

 Won a TxDOT Green Ribbon grant for a Baker Blvd. Project to improve the eastern and western most medians

 Purchased new benches, picnic tables, trash cans, pet posts and park signs throughout the system

 Began an herbicide contract with resident business TruGreen

 Created a new Park Technician job description and position without expanding the city’s expenses. The position was funded by reallocating funds previously used by the landscape contractor. The work earmarked for those funds will now be done by the Parks Technician.

FY 2022-2023 Objectives

 Work with the council to continue improving the parks system with the next items on the park plan

 Increase park usage while maintaining a high level of cleanliness

 Expand the Parks Maintenance team with an additional entry level position

*Parks Maintenance Tech is a new position for FY2023 that replaces the PW Maintenance I position.

COMMUNITY DEVELOPMENT

The Community Development department includes permits, building inspections and code compliance along with planning and economic development Previously, Code Compliance was assigned to the Neighborhood Services Department.

Mission Statement-Development Services

Development Services strives to ensure the general health and welfare of the community through the administration of the Zoning Code, Building Codes and Comprehensive Plan as well as the Corridor Plan and Special Plan areas.

Mission Statement - Code Compliance

The mission of Code Compliance is to enhance and sustain the quality of life of citizens and the environment through effective and expedient enforcement and compliance with building, zoning, land development, environmental, and other codes and ordinances that protect public health, safety, welfare, and natural resources.

FY 2021-2022 Accomplishments

 Permit Technician completed Permit Technician Certification

 2 Townhome projects completed Zoning and have moved onto Building Permit Phase (121 Single Family lots added)

 Increase in businesses receiving Certificate of Occupancy

 Assistant to the City Manager received Certification in Economic Development Basic training and Basic Code Compliance

 Increased violation notices issued to residents

 Improved violation compliance rate

 Successful transition of new Code Compliance Officer from the Public Works Administrative Assistant position

 New officer successfully completed the Basic Code Compliance Officer training

FY 2022-2023 Objectives

 Compile resource information for senior and low-income residents to aide them in complying with City Code

 Merge Code Compliance with Community Development

 Work toward establishing a better working relationship with residents and the business community

 Develop a Multi-Family ordinance

 Amend Sign Ordinance

 Develop Comprehensive Plan

 Work towards better relationships with businesses by providing quarterly events and information

 Encourage all businesses to join the Chamber of Commerce

 Develop Short Term Rental Ordinance

 Market our New Building Improvement Grant for Potential Projects

 Increase BRE (Business, Retention, Expansion Projects)

 Develop new workflow processes

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

PLANNED DEVELOPMENT

ANIMAL SERVICES

Animal Services falls under the direction of the Richland Hills Police Department.

Mission Statement

The Richland Hills Animal Services department exists to provide humane shelter and care for companion animals in need of housing; promotes kindness and a clear opportunity for life by offering pets for adoption to the community

FY 2021-2022 Accomplishments

 Start of Animal Services building renovations: floors stained, new lobby and office millwork, improved lighting, new doors, painting of exterior and interior, stone repairs and added dog runs

 Second Animal Control Officer added to the Animal Services Center

FY 2022-2023 Objectives

 Expansion of the parking lot

 Repair drainage issues

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

LEGISLATIVE DEPARTMENT

The Legislative Department is comprised of the City Secretary’s office and provides services for the residents of Richland Hills and the City Council. Some of the services provided include administrative support, conducting city elections, records management, processing public information requests and more.

Mission Statement

The Richland Hills City Secretary's Office mission is to preserve the records of the past while innovating for the future.

FY 2021-2022 Accomplishments

 56 meetings attended

 160 documents created

 250 open records requests processed

 72 years of records digitally archived

 Conducted a General Election and one Special Election

 Initiated an online records repository in LaserFiche to allow public, web self-service

 Kicked off the Enterprise Vehicle Lease program and processed 20 new vehicle registrations

FY 2022-2023 Objectives

 Apply for and get awarded the TMCA Municipal Clerk’s Achievement of Excellence Award

 Inventory and catalogue city’s records to do a document destruction

 Continue to expand the availability of records available electronically in Laserfiche

SHARED SERVICES

The Building Services team falls under Shared Services and is comprised of four full time positions and three part-time positions, along with contractor support. Currently, Building Services falls under the Director of Parks and Recreation and is managed by the Parks and Facilities Supervisor. The accomplishments below were completed by the Director and one other position during the fiscal year 2022.

Mission Statement

The Shared Services department provides professional, technical and non-technical services for all city facilities to include areas that provide employee comfort and safety, energy management, facility maintenance and repair, and custodial services.

FY 2021-2022

Accomplishments

 Created a new Fulltime Custodian job description and position. The main goal of this position is to create some continuity and improve accountability across city facilities.

 Staff began doing some of the scheduled preventative maintenance that we were previously paying a vendor to do, specifically HVAC inspection, filter replacement and unit cleaning.

FY 2022-2023 Objectives

 Complete a facility inventory that results in producing a Dossier for each building outlining the specific equipment, fixtures, and preventative maintenance schedule for each building.

 Complete and distribute an emergency vendor contact sheet for each building to use when service is needed.

 Create a new task request system of incoming requests that will produce feedback, updates and results of each task request.

 Improve support, timeliness, communication, and accountability of city-wide tasks.

The LINK fund is a fund that is used to account for the revenues and expenditures of the LINK Recreation and Event Center. The LINK fund falls under the General Fund and is considered a Special Revenue Fund. The General Fund provides up to $200,000 in revenue via transfer at the end of each fiscal year. The goal of Council is to have the LINK Fund be self-sustaining in the near future. Revenues are derived from classes, recreational programs, after-school care, event rentals, memberships and other programs The LINK fund was constructed in 2016 and certificates of obligation were issued in the amount of $4,705,000. The debt service is shared by two funds: the HOT tax fund and the RHDC fund. Debt service schedules can be found in those funds’ respective sections.

The Director of Parks and Recreation oversees the LINK Fund.

Fund Summary

The LINK is a 28,000 square foot multi-purpose facility that hosts a gymnasium, track, fitness floor, locker rooms, group exercise, childcare, game room, a kitchen and multi-use community rooms. The Link was designed to be a partial cost recovery, with an annual General Fund subsidy of $200,000 or less as required. The Link staff is tasked with finding a balance between offering programs and events that bring the community together, all while maintaining a high level of fiscal responsibility to reach the stated financial goals.

Mission Statement

The LINK Event and Recreation Center will be an avenue for improved quality of life and fostering a sense of community. It will be a regional hub for recreational programming and hosting events that will be a benchmark for others to model.

FY 2021-22 Accomplishments:

 Got back to a pre-COVID level of revenue, by pivoting strategies and creating larger revenue streams in programs to off-set a decrease in memberships

 Had the two highest revenue months in the five-year history of The LINK

 Continued to serve more than just Link Membership with the monthly Lunch Bunch, local elections, vaccinations, and quarterly donation drives to local organizations

 Completed aquatics feasibility study with Counsilman-Hunsaker

 Installed two new fitness room mirrors

 Installed an electronic monument sign on Baker

 Finalized the installation of the indoor soft playground

 Reach agreements with the City of Haltom City and IDEA Achieve to program athletics together

 Hosted East Ft. Worth Montessori Academy in 5 areas (approx. 110 students) for 7 months while their building was being repaired

 Expanded the afterschool program off-campus with an agreement with BISD

 Expanded the summer camp program to include 6th graders and an extra 12 students each week

 Saw pickleball grow to 95 players

 Began an eSports program and partnered with BISD to host teams at city facilities

 Began offering outdoor recreation programming

 Expanded staffing by one fulltime and four additional employees without additional subsidy

 Managed a wage increase for staff without additional subsidy from the General Fund

FY 2022-23 Objectives:

 Increase annual membership revenue to $80,000

 Increase athletic programs to include co-hosting youth summer basketball and volleyball

 Increase overall daytime traffic at The LINK by members and guests

 Recruit weekday rentals throughout the school year by $2,500

 Host more events that have a positive impact on the Hotel Occupancy Tax

 Join the Texas Amateur Athletic Federation and begin bidding for tournaments

 Begin hosting an annual LINK Birthday celebration for members

 Begin hosting a back-to-school event to benefit our local public and charter schools

 Improve our communication and marketing to the community with more consistent posts and using community partners

 Start our Second Saturday Seminars that allow residents to come to The Link for free educational programming that revolves around house/car maintenance, gardening, personal finance, etc.

*Transfers in from General Fund

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

*At EOY Estimate FY22 there were outstanding invoices that were to be paid in FY23 with the ending fund balance of $73,996.

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

*All P/T positions are FTE

ENTERPRISE FUNDS WATER & SEWER FUND

Enterprise Funds are used to account for goods and services that the city provides to its customers.

Fund Summary

The Water & Sewer Fund is used to account for the water and wastewater systems of the city.

The fund consists of several departments:

Shared Services, Utility Administration, Water Operations & Distributions and Sewer Treatment

The Water & Sewer Fund also accounts and pays for its own debt service.

Mission Statement

The mission of the Water & Sewer Fund is to improve, maintain, and preserve the infrastructure and environment in the City of Richland Hills. We strive to protect the health, safety, and welfare of its residents, business community, and visitors by providing quality services in a reliable, responsible, and effective manner that enhances public trust and pride within the community.

FY 2021-2022 Accomplishments

 Maintained our Superior Public Water System status

 Submission and approval by City Council to participate in a Water Meter Replacement Program

 60,000 feet of sewer line cleaned

 Continuously provided quality service while operating at minimum staffing levels

 Replacement of all Public Works vehicles through Enterprise contractual agreement

 100 feet of sewer line replaced

FY 2022-2023 Objectives

 Fill all vacant positions within the department and work toward reducing the turnover rate

 Replacement of all water meters

 Obtain TCEQ (Texas Commission on Environmental Quality) licensing for all new hires

 TCEQ Upgrade for currently licensed personnel

 Establish a Wastewater Sampling Program

 Establish a Backflow Prevention Program

 Completion of the Public Works Standard Operating Procedures

The Water & Sewer Fund is responsible for maintaining 47 miles of water line, 355 fire hydrants, 60 miles of sewer lines, and billing and reading 3,076 customer meters. Other responsibilities include responding to customer requests; cleaning, inspecting, and repairing sewer lines; installing water/sewer services upon request; repairing water lines, valves, and fire hydrants; water/wastewater capital improvement projects, and other related services.

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

FY 2022-2023 BUDGET

The City does not follow GAAP when budgeting Enterprise Funds, however, it does present them according to GAAP in the annual financial statements.

The following are some major budget items for FY 2022-23:

Major Budget Item: The Water Meter replacement project was approved by Council on August 8, 2022. This project was approved in order to replace the aging water meters for every water customer in the City. The project’s total cost is $2,406,753 with the City providing the funding in the amount of $1,000,000 from cash reserves and the remaining amount of $1,406,753 being funded by a capital financing source. The debt service schedule is included in the section relating to debt.

Shared Services

The Shared Services department is used to account for services that are shared with the general fund and other departments. Expenses such as the City’s property and casualty insurance, IT vendor costs, website costs, building maintenance, the City’s utilities expenses and other costs are tracked in this department. There are no personnel in this department.

Utilities

The Utility Administration department accounts for the fund’s utility billing and administration costs such as postage and costs to mail out customer bills, personnel costs for one Utility Billing Administrator, billing software expenses, customer credit card fees, and other costs.

This department has one person budgeted in personnel; however, the fund contributes and shares costs with the General Fund for several other employees. These are: the City Manager, Director of Finance and Administration Costs, PW Director, HR Specialist, Communications Specialist, Senior Accountant, Accounts Payable Tech, Assistant to the City Manager (Support Services) and the City Secretary. The Utility Administration department falls under the direction of the Director of Finance and Administration Services.

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

Water & Sewer

The Water and Sewer departments fall under the direction of the Public Works Director. Public

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

During FY 2021, the cost of garbage collection was included in the amended budget and will continue to be budgeted in the non-departmental section of the Water and Sewer Fund. Transfers out to other funds are also included in the non-departmental section.

The $80,000 transfer out to the Capital Projects Fund is to fund a fence around the public works building. Debt

Over the years there have been several debt issuances that are paid out of the Water and Sewer Fund. Below is the debt service schedule for this fund:

Payments Remaining

CITY OF RICHLAND HILLS, TEXAS

$1,525,000 General Obligation Refunding Bonds, Series 2017

Total outstanding debt for Water & Sewer Fund as of 10/01/2022 $4,584,469.20

*Fiscal Year 22 data available from January 2022 through August 2022. Data not available for prior years due to the way the data was collected.

Public Works Staff

ENTERPRISE FUNDS DRAINAGE FUND

Fund Summary

The Drainage Fund collects a fee from property owners based on the amount of impervious area on their property. Funds are used for drainage planning, maintenance, improvements, stormwater runoff quality and implementation of the mandated EPA Phase II stormwater program. The Drainage Fund is the second enterprise fund of the City

The Director of Public Works oversees this fund. There is one employee in the Drainage Fund, however, this fund shares in the personnel costs for the following positions: Public Works Director, City Secretary, PW Operations Manager and Administrative Assistant as those positions contribute hours to the oversight and administration of the Drainage Fund.

FY 2021-2022 Accomplishments

 Heavy cleaned Faith Creek Channel

 Engineering of repairs for Latham drainage channel, lower water line obstructing Latham channel

FY 2022-2023 Objectives

 Repair erosion of Latham channel

INCOME STATEMENT

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

DRAINAGE UTILITY FUND (FUND 022)

The City does not follow GAAP when budgeting for the Drainange Fund, however, the annual financial reports follow GAAP. Any net loss on the income statement is covered by fund balance.

Debt

The Drainage Fund pays for its own debt service. The following tables show outstanding debt attributed to the Drainage Fund:

CITY OF RICHLAND HILLS, TEXAS

$5,730,000 Combination Tax & W/S Revenue Bonds, Series 2013 (DRAINAGE)

$2,865,000 Drainage Payments Remaining

CITY OF RICHLAND HILLS, TEXAS 2020 GO BONDS REFUNDING $1,730,000

FIRST NATIONAL BANK OF TEXAS

100% Drainage Supported - FUND 022

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

SPECIAL REVENUE FUNDS

The City of Richland Hills has several funds that are governmental funds and are classified as special revenue funds in the budget. The revenues for these funds are derived from restricted court fees, sales taxes, hotel/motel taxes and interfund transfers.

The following are Special Revenue Funds in the City’s budget:

 Municipal Court Security Fund

 Municipal Court Technology Fund

 Richland Hills Development Corporation (RHDC)

 Crime Control Prevention District Fund (CCPD)

 Hotel/Motel Fund

 Tax Increment Financing Fund (TIF)

 Link Replacement Fund

 Emergency Operations Management Fund

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

MUNICIPAL COURT SECURITY FUND

Fund Summary

The Municipal Court Security Fund is a restricted fund that is used to account for the security needs of the City of Richland Hills’ Court. Revenue is derived from citations and is kept in a restricted fund to be used only for court security expenses. This fund has no personnel costs.

MUNICIPAL COURT TECHNOLOGY FUND

Fund Summary

The Municipal Court Technology Fund is a restricted fund that is used to account for the technology needs of the City of Richland Hills’ Court. Revenue is derived from citations and is kept in a restricted fund to be used only for court technology expenses. This fund has no personnel costs.

RICHLAND HILLS COMMUNITY DEVELOPMENT FUND

Fund Summary

The Richland Hills Community Development Fund or RHDC, is a blended component unit of the City. It is a type B Economic Development Corporation. The residents of Richland Hills voted to create this community development fund by allocating .25% of the 2% sales tax received by the City on June 28, 1996. This sales tax revenue is used to promote infrastructure improvements, parks and park facilities and economic development within the City and the State of Texas in order to eliminate unemployment and underemployment and to promote and encourage employment and the public welfare of, for and on behalf of the City by developing, implementing, providing, and financing projects. Operation of the Corporation is funded by .125 percent sales tax approved by the voters. The sales tax was increased to .25 percent effective April 2019.

The Richland Hills Community Development Corporation does not have any full-time employees; however, the fund does contribute towards personnel costs on a cost allocation basis for the following positions: City Manager, Assistant to the City Manager-Development Services, and Parks Maintenance Technician I.

Major Budget Items for the fund: $75,000 for the Glenview Drive Corridor Master Plan and the personnel costs of the new Parks Maintenance Technician in the amount of 50% of costs ($29,453) shared with the General Fund and carry over $640,000 from FY22 for various parks projects and an additional $360,000 for the continuation of the Parks Master Plan Projects.

*Completed Projects Funding to FY2023 shown above

The fund’s revenue source is from sales taxes. Below you will find sales tax trends for the RHDC:

In 2016, the City entered into a contract to construct the LINK Activity Center which was funded partially by issuing $4,705,000 Certificates of Obligation. The RHDC shares the debt service with the Hotel/Motel Fund. The RHDC Fund pays for its own debt service. The debt service details are listed below:

CITY OF RICHLAND HILLS, TEXAS

$4,705,000 Combination Tax and Revenue Bonds, Series 2016 (EDC)

$3,240,000 - EDC Sales Tax Revenue Supported

Total outstanding debt for RHDC $3,226,506.

CRIME CONTROL PREVENTION DISTRICT FUND

Fund Summary

The Crime Control Prevention District Fund (CCPD) is a special district created in November of 2005 by a vote of the citizens of Richland Hills The District is dedicated to crime reduction programs. The City Council serves as the board of directors for the District. Operation of the District is funded by .325 percent sales tax approved by the voters.

The CCPD has a total of 8 authorized FTEs. They are all part of the Richland Hills Police Department and report to the Chief of Police.

The CCPD shares costs with the General Fund for one staff member who also serves as the public information officer for the City and police department.

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

CITY OF RICHLAND HILLS - CRIME CONTROL DISTRICT FUND (FUND 065)

Major Budget Items: A transfer out to the Capital Projects Fund for the Law Enforcement Center improvements $50,000, Flock Camera Grant Lease match $12,200, and Breaching/Shields Equipment $31,925.

*Public Information Officer/Asst. to the CM is budgeted in both the CMO budget and the CCPD The number of sworn positions in CCPD did not increase

Below is the sales tax revenue history and projections for FY 23 for the CCPD:

HOTEL/MOTEL FUND Fund Summary

The Hotel/Motel Fund accounts for the proceeds of a 7 percent hotel occupancy tax and expenditures related tourism.

There is only one FTE employee in the Hotel/Motel Fund. Costs of this position are shared with the General Fund while the fund builds up enough resources to fully fund this full-time position.

The Hotel/Motel Fund pays its own debt service derived from the hotel occupancy tax revenues. This fund shares the debt service with the RHDC fund. The following is the fund’s debt service schedule:

CITY OF RICHLAND HILLS, TEXAS

$4,705,000 Combination Tax and Revenue Bonds, Series 2016 (Hotel Occupancy Tax) $1,465,000 - Hotel Occupancy Tax Revenue Supported Annual

Total outstanding debt for Hotel/Motel Fund is $1,436,484

TAX INCREMENT FUND (TIF)

Fund Summary

The Tax Increment Fund or TIF is used to account for the receipts of the Baker Boulevard TIF zone and the green ribbon and intersection projects. In 2009 the City of Richland Hills established a Tax Increment Refinancing Zone (TIRZ) along the Baker Boulevard corridor. The purpose of the TIRZ is to dedicate the incremental tax increases generated within the Zone to the public improvements required to improve the appearance and accelerate economic development within the Zone.

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

The TIF fund derives its revenue mainly from property taxes that are transferred from the General Fund once per year and sales taxes also transferred in from the General Fund based on total sales taxes received for the fiscal year.

The TIF does not have personnel allocated to it. Major budget items are: Capital Projects $460,000 for the Animal Services Improvement project and $90,000 for backlit street signs along Baker Boulevard.

There is also $30,000 for a façade grant to businesses within the TIF.

Below are trends for the TIF fund for both sales tax and property tax revenues:

Businesses along Baker Boulevard

LINK REPLACEMENT FUND

Fund Summary

The LINK Replacement Fund is a new fund created during FY22. It was created to account for transfers in from the General Fund for the purpose of capital replacements in the LINK Event & Recreation Center. There are no personnel budgeted in this fund. The City expects to accumulate funds from year to year to pay for capital equipment or improvements necessary to keep the LINK center running.

EMERGENCY OPERATIONS MANAGEMENT FUND

Fund Summary

This new fund was created mid-year FY2022 to account for transfers in from the General Fund for expenses related to the Emergency Operations Center. The amounts will increase from year to year depending on circumstances such as winter weather and other severe weather occurrences. There are no personnel budgeted in this fund.

Capital Projects Funds are used to account for all major capital improvements that are financed by the City’s general obligation bonds, certificates of obligation, intergovernmental grants, interfund transfers and other designated sources

 Capital Improvements Plan

 CIP Budget Summary

 Impact of Capital Projects on Operating Budget

 Oil and Gas Fund

 Capital Projects Fund

 Road & Street Fund

 Vehicle Replacement Fund

 ARPA Fund

 Strategic Initiative Fund

Capital Improvements Program Description

Richland Hills is committed to improving its aging infrastructure. Unlike other cities to the north of the Metroplex, the City of Richland Hills is landlocked with its proximity to several other communities, including the City of Fort Worth. New development is forthcoming, however, not at the exponential rate that its neighbors to the north are experiencing. A critical component of growth management is providing adequate infrastructure and facilities for current residents as well as new citizens and new business development. The Capital Improvements Program (CIP), a five-year plan for funding of major capital improvements, is structured to meet those needs while maintaining a strong fiscal policy. In addition to the five-year plan, the City will begin forecasting debt capacity and operational cost over a ten-year period.

The Capital Improvements Program is developed by identifying and prioritizing capital project needs, then balancing those needs with available funding sources. Many projects are identified from previously approved master plans for water, wastewater, parks, streets, facilities, etc. Other projects are recommended by Council, citizen boards, staff, and community input.

CIP Financing

The Capital Improvements Program is funded from several sources, including General Obligation Bonds, Certificates of Obligation, Revenue Bonds, RHDC (4B) funds, grants, and contributions. The largest single source of funding is General Obligation and Certificates of Obligation Bonds. The City did not issue debt during fiscal year 2022, but plans to issue debt during the 2023 fiscal year to address issues with drainage and streets. The amount for those debt issues is under consideration.

Capital Project Funds

Various capital project funds have been created to account for proceeds from bond sales, transfers, specific grants, or other funds earmarked for capital projects. A description of capital project funds, associated projects and the annual budget element for each fund are listed on the following pages. Information on projects, funding sources and funding years is detailed in the CIP Five-year Financial

Plan at the end of this section. A current listing and map of CIP projects can be found on the City’s website here: CIP Projects

CIP Budget Summary

Impact of Capital Projects on Operating Budget

The City of Richland Hills prepares an operating budget and capital budget which are closely linked. The operating budget is prepared annually for the operational needs of the budgeted year. The capital improvement program (CIP) budget is for the acquisition, expansion, or rehabilitation of infrastructure, fixed assets, or productive capacity of city services. The CIP, unlike the operating budget, is a five-year financial plan and is updated annually. Only those projects with expenditures during the current year of the plan are financed and adopted as part of the City’s annual budget.

Many of the capital projects are non-recurring, or one-time projects, which will impact the city’s operating budget at some point in time. Each project in the plan is reviewed to assess the impact it will have on the operating budget. Projects providing new infrastructure will typically require additional

Screen Shot of CIP Projects on City’s website

expenditures each year for operation and maintenance. Projects that replace or rehabilitate existing infrastructure will typically reduce operating costs; however, this does not generally result in an overall reduction of operating costs as the other aging City infrastructure not replaced are progressively more expensive to operate and maintain. Below is the City’s 5 year Capital Improvement Plan.

RICHLAND HILLS 5 YEAR CIP PLAN

The majority of these projects are rehabilitative and therefore will have an overall decrease in expenses as it relates to impact on the general fund/water fund. The park improvement projects do include the addition of bathrooms which necessitates personnel to maintain them.

In FY23 one Park Maintenance Technician I was added and the total cost to the general fund and RHDC is $58,906 with an additional FTE projected in FY23-27 for a total impact of $559,110. The Water Meter Replacement Project in the Water/Sewer Fund has an operational impact of $365,767.

RICHLAND HILLS 5 YEAR CIP PLAN CONT.

*SIF- Strategic Initiative Fund TIF – Tax Increment Fund RHDC – Richland Hills Development Corporation

Control District

Rescue Plan

CITY OF RICHLAND HILLS ANNUAL BUDGET FY2022-23

Oil and Gas Fund

Fund Summary

The Oil and Gas Lease Fund is to account for the revenues derived from oil and gas leases that City of Richland Hills holds and for capital expenses approved by the City Council.

Major Budget Items include $95,000 earmarked for park improvements.

This fund does not have any personnel allocated to it.

Capital Projects Fund

Fund Summary

The Capital Projects Fund accounts for capital projects expenses and for capital lease payments related to the fire department. This fund receives most of its revenue through interfund transfers from the General Fund, RHDC, CCPD, intergovernmental contributions and grants.

Completed projects as of FY22

P01 Parks Hike and Bike Trail

B03 Police Station Covered Parking

PK03 2022 Green Ribbon Project

Projects in progress as of FY23

B05 Law Enforcement Bldg. Improv.

P05 2023 Green Ribbon Median Improvements

P06 Kate Baker Park Improvements

P07 Creek Trail Park Improvements

PW Masonry Fence (transfer from W/WW fund)

Current capital leases paid out of the Capital Projects Fund (Annual Payment):

Fire Engine $73,539 New Ambulance $$66,000 Opticom System: $18,772

There are no personnel allocated to this fund.

Project details, funding sources, budget, and fiscal years active can be found in the 5-year CIP plan section.

CAPITAL PROJECTS FUND (FUND 020)

Road and Streets Fund

Fund Summary

The Road and Streets Fund was established for the improvement and construction of roads and streets within the City. It is funded with a .375% sales tax. This is a restricted fund

Completed projects as of FY22 Projects in progress as of FY23

ST02-FY2022 Street Improvement Projects

ST03-Rufe Snow Reconstruction

ST04-FY23 Street Improvement Projects

Street projects for FY23 include construction of Dover Lane and Norton and design of Magnolia Park Drive

The Road and Street Fund has no personnel.

To view all past and current CIP projects you can click here: Street Projects

Vehicle Replacement Fund Fund Summary

The Vehicle Replacement Fund was established to account for the revenue generated by the sale of city vehicles, insurance claim reimbursements and the expenses related to the vehicle lease program.

The Enterprise Vehicle Lease program kicked off during the fiscal year 2022.

All city vehicles are included in this fund except for major equipment such as fire engines and ambulances that are accounted for in the fire department budget.

There is no personnel allocated to this fund. Revenues are derived from the sale of old city vehicles as they are replaced via leases. Starting in FY24, the General Fund and Water/Sewer fund and their respective departments will begin annual transfers into the Vehicle Replacement Fund to fund the capital lease payments. All lease payments are allocated to the respective department.

During FY22 a total of 17 new vehicles were acquired via leases from Enterprise.

VEHICLE REPLACEMENT FUND (FUND 030)

ARPA Fund

Fund Summary

The ARPA Fund is used to account for the funds from the American Rescue Plan Act that the City of Richland Hills was awarded. The funds were received in the summer of 2021 and 2022. The funds were to be used for aging water insfrastructure, premium pay for essential employees during the 2020 pandemic and broadband expansion. This is a restricted fund.

ARPA funds are not recognized as revenue until funds are expensed. The City plans to expense all funds by the end of fiscal year 2023 and shows the revenue for budgeting purposes.

There are no personnel allocated to this fund.

Projects started in FY22

W2201-Water Line Improvments

Projects in progress as of FY23

W2201-Water Line Improvements (cont.)

Equipment-City Hall Emergency Generator Broadband Project

Premium Pay (1st disbursement)

Premium Pay (2nd disbursement)

Strategic Initiative Fund

Fund Summary

The Strategic Initiative Fund (SIF) was created under the direction of City Council during the FY23 Budget Workshop. This is a designated fund in which the excess General Fund balance is transferred to at the end of each fiscal year The concept is simple: each year, staff will evaluate the required 25% unassigned reserve and “sweep” the excess into the new fund. Projects cannot include Water/WW or Drainage.

Major Budget Items:

ERP Implementation $111,000, City Hall Improvements $50,000, Strategic Plan $30,000, Fire Administration Building Design $20,000, Comprehensive Plan Zoning Update $225,000, Council Chamber Upgrades $40,000, and Animal Services Parking $215,000

There are no personnel costs in this fund.

Fund Summary

The debt service fund is used to account for the revenue of property taxes levied by the City. The resources in the fund are used for payment of principal, interest and related costs on general longterm debt incurred by the City.

 Debt Policies

 History of Ad Valorem Tax Rate and Components

 Debt Service Graphs

 Total Outstanding Debt

Debt Policies can be found in the City’s Financial Policy found in Appendix A

History of Ad Valorem Tax Rate and Components

History of Debt Service Payments

Debt Service Schedule Payable by Property Tax Next 5 Years

APPENDIX A - FINANCIAL POLICIES

INTRODUCTION

The intent of the following Financial Management Policies is to enable the City of Richland Hills, Texas (the “City”) to achieve a long-term stable and positive financial condition. The guiding principles of the City’s financial management include integrity, prudent stewardship, planning, accountability, and full disclosure.

The more specific purpose of this policy is to provide guidelines to the Finance Director and the City Manager in planning and directing the City's day-to-day financial affairs and in developing recommendations to the City Council.

The scope of these policies generally spans, among other issues, accounting, auditing, financial reporting, internal controls, operating and capital budgeting, revenue management, cash and investment management, expenditure control, debt management, and planning concepts, in order to:

a) Present fairly and with full disclosure the financial position and results of financial operations of the City in conformity to generally accepted accounting principles (GAAP) as set forth by the governmental accounting standards board (GASB), and

b) Determine and demonstrate compliance with finance related legal and contractual issues in accordance with provisions of the Texas Local Government Code, City Charter and other relevant mandates.

GENERAL IMPLEMENTATION AND COMPLIANCE GUIDELINES

A. FINANCE/AUDIT COMMITTEE. A committee designated as the Finance Committee, will be appointed annually by the City Council and will consist of two members of the Council, the City Manager and the Finance Director. The committee will meet quarterly, or as needed. The function of the committee will be:

1) Fiscal policy review,

2) Auditor selection recommendation,

3) Investment policy review and guidance, and

4)Long-term financial planning.

B. ANNUAL REVIEW. Based upon the results and recommendations of the Finance Committee review, the City will annually approve new or revisions to fiscal policies.

C. IMPLEMENTATION, COMPLIANCE AND REVIEW. The Finance Director will be accountable for implementing these policies and will to the best of his/her knowledge make the City Manager, Finance Committee and City Council aware of any variances in, practice from these policies or any other deviation from prudent financial practices in accordance with GAAP, state/federal laws and/or ethics of the profession. Any variances may be presented at quarterly meetings of the Finance Committee unless there is a need for a special meeting.

ACCOUNTING, AUDITING AND FINANCIAL REPORTING

A. ACCOUNTING. The City is solely responsible for the reporting of its financial affairs, both internally and externally.

B.AUDITING. An independent certified public accounting (CPA) firm will perform annual financial audits.

1) Qualifications of the Auditor. In conformance with Texas Local Government Code, Title 4, Chapter 103, the City shall have its records and accounts audited annually and shall have an annual financial statement prepared based on the audit performed by external independent accountants ("auditor").

2) Auditor Repute. The auditor must be a Certified Public Accounting (CPA) firm of good reputation and must demonstrate that it has the breadth and depth of staff to conduct the City's audit in accordance with generally accepted auditing standards and contractual requirements. The auditor must be registered as a partnership or corporation or certified public accountants, holding a license in the state of Texas, capable of demonstrating that it has sufficient staff which will enable it to conduct the City's audit.

3) Timing. The auditor's report on the City's financial statements will be completed within 180 days of the City's fiscal year end.

4) Management Letter. The independent CPA firm shall provide a management letter, if one is issued, no later than March 31 following the end of each fiscal year. The Finance Director shall respond in writing to the City Manager and City Council regarding the auditor's management letter, addressing the issues contained therein. The Council shall schedule its formal acceptance of the auditor's report upon the resolution of any issues resulting from the year-end audit.

5) Responsibility of Auditor to City Council. The auditor is accountable to the City Council and will have access to direct communication with the City Council if the City Staff is unresponsive to auditor recommendations or if the auditor considers such communication necessary to fulfill its legal and professional responsibilities.

6) Rotation of Auditor. The City will circulate requests for proposal for audit services at least every five years. Should the City Council be dissatisfied with the auditor's performance, it may request new proposals at any time. Year to year authorization to continue shall be done by no later than July 1st of each year.

7) Auditor Accountability to Staff. The auditor shall provide the Finance Director with copies of all work papers/support documentation and schedules upon completion of the audit. Originals will be maintained at the auditor’s office.

C. FINANCIAL REPORTING

1. External Reporting.

a. Scope. The Financial Report shall be prepared in accordance with generally accepted accounting principles (GAAP) as promulgated by the Government Accounting Standards Board (GASB).

b. Timing. The Report shall be presented to the City Council within 180 calendar days of the City’s fiscal year end. If City staffing limitations preclude such timely reporting, the Finance Director will inform the City Manager and Council of the delay and the reasons thereof.

c. Awards. Upon approval of the City Council, the Annual Financial Report may be presented annually to the Government Finance Officer's Association (GFOA) for evaluation and consideration for the Certificate of Achievement for Excellence in Financial Reporting. (Refer to Section XII, C for more detail).

2. Internal Reporting. The Finance Department will prepare internal financial reports, sufficient to plan, monitor, and control the City's financial affairs. Internal financial reporting objectives are addressed throughout these policies.

OPERATING BUDGET

A. PREPARATION. Budgeting is an essential element of the financial planning, control, and evaluation process of municipal government. The City's operating budget is the City's annual financial operating plan.

1.Scope. The scope of the budget includes all funds for which the City will adopt a formal budget, including Governmental Funds and Proprietary Funds.

2. Budgetary Process. The budget is prepared by the City Manager or his/her designee with the cooperation of all City Departments. The budget should be presented to the City Council at least 90 days prior to fiscal year end, and should be enacted by the City Council prior to fiscal year end.

The budget process is completed in several steps, and it is initiated by the City Manager. The first step is to calculate the year-end estimate of the current year. Departmental Directors/Managers begin the process by preparing estimates for the remainder of the year. Once the year-end estimates are completed, the departments begin preparing the proposed estimates for the upcoming fiscal year.

The second step is the calculation of the proposed base budget for the new fiscal year. This step is the proposed cost for maintaining current base operations and assumes no additional personnel or additional equipment. Activities which require additional resources to maintain the service due to growth, new facilities, new equipment, etc., are considered enhancements or supplemental requests to the base budget and must be explained and justified.

The third step is justification for any proposed new programs or enhancements/supplemental requests. This is defined as any proposed change in program emphasis, expenditures of funds, allocation of personnel or equipment which will result in a change in the level of service currently being delivered. Departments will have to describe the program, itemize all new costs, proposed personnel as well as the reason supporting the request. Each request is prioritized according to need as perceived by the departmental unit.

During the budget process, each department head will review and discuss their budgetary needs with the City Manager. Once all departments have finalized their base and enhancement proposals, the City Manager prepares a comprehensive report on all enhancements by priority and submits this information as part of the proposed annual operating budget to the City Council.

3.Awards. If feasible and approved by the City Council, the annual operating budget may be submitted to the GFOA annually for evaluation and consideration for the Award for Distinguished Budget Presentation.

4. Basis of Budgeting. The basis of budgeting will be the same as the basis of accounting; that is, budgets for the General Fund, Special Revenue Funds, Debt Service Funds and Capital Projects Funds are prepared on the modified accrual basis of accounting – this means that obligations of the City (for example outstanding purchase orders) are budgeted as expenses, but revenues are recognized only when they are actually received. Budgets for the Proprietary (Water-Wastewater and Drainage) Funds, on the other hand, are prepared on a full accrual basis – expenditures are recognized when a commitment is made, and revenues are also recognized when they are obligated to the City.

5. Financial Forecast. A five-year financial forecast shall be prepared annually projecting revenues and expenditures for all operating and capital project funds. This forecast shall be used as a planning tool in developing the following year’s operating budget.

6. Proposed Budget Format. A proposed budget shall be prepared by the City Manager with the participation of all of the City’s Directors/Managers. The budget shall include at least four basic segments for review and evaluation. These segments are: (1) personnel costs, (2) operations and maintenance costs, (3) capital and other (non-capital) project costs, and (4) revenues. A format should

be used such that prior year actuals, current year budget and revised, and next year proposed are all clearly shown.

8. Council Participation. The budget review process shall include Council participation in the development of each of the four segments of the proposed budget and a Public Hearing to allow for citizen participation in the budget process. The budget process shall span sufficient time to address policy and fiscal issues by the Council. The budget process will be coordinated so as to identify major policy issues for Council consideration prior to the budget approval date so that proper decision analysis can be made.

9 Filing and Adoption. Upon the presentation of a proposed budget document acceptable to the Council, the Council shall call and publicize a public hearing and adopt by Ordinance such budget as the City's Official (Adopted) Budget, effective for the fiscal year beginning. A copy of the proposed budget shall be filed with the City Secretary.

10. Amending the Official (Adopted) Budget. Council may amend the budget for municipal purposes in accordance with state law. The City Manager is authorized to make line-item and departmental budget adjustments during the year in order to avoid over-expenditures of particular line items. Adjustments do not require further Council action if the total appropriation of each fund as set forth in the adopted budget is not exceeded. Expenditures in excess of the adopted budget appropriations for each fund require budget amendments.

11.Encumbrances. Encumbrances outstanding at the end of each fiscal year shall expire at the end of the fiscal year, except for capital project funds. These shall be reflected as reservations of fund balance. Subsequent year's payments on previously encumbered capital project funds will be reflected as expenditures of the prior year with a corresponding decrease of the reservation of fund balance.

B. BALANCED BUDGET. The operating budget will be balanced with current revenues and other resources greater than or equal to current expenditures/expenses. Use of beginning balances and other reserves to balance operations will be disclosed in the document with the underlying rationale. The adoption of a balanced budget, where current resources (current revenues plus fund balance or unassigned fund balance) shall be required. Current resources will equal or exceed current expenditures for each individual fund.

C.REPORTING. Monthly financial reports will be prepared to enable the Department Managers/Directors to manage their budgets and to enable the Finance Director to monitor and control the budget as authorized by the City Manager. Such reports will be in format appropriate to enable Council to understand the budget status at a level of summary executive detail.

D. CONTROL. Operating Expenditure Control is addressed in Section VI.

E. ACTIVITY INDICATORS AND STATISTICS. Where appropriate, activity indicators and statistics will be used as guidelines and reviewed for efficiency and effectiveness. This information will be considered in the annual budgeting process and reported to the City Council when appropriate. The proposed annual budget shall also integrate performance measures, goals and objectives, service levels and productivity measures where appropriate.

F. OPERATING POSITION. The guidelines that the Town should be following to assure fiscal stability are those outlined in Section IX - Financial Condition/ Reserves/Stability Ratios.

REVENUE MANAGEMENT

A. ANNUAL ESTIMATES. Annual estimates of revenue in both the General Fund and Proprietary Funds shall be based on historical trends and reasonable expectation of growth. A conservative approach shall be observed in estimating revenues, so that revenue estimates will not be overstated. The City will strive for the following optimum characteristics in its revenue system:

1. SIMPLICITY. The City, where possible and without sacrificing accuracy, will strive to keep the revenue system simple in order to reduce compliance costs and to make it more understandable to the taxpayer or service recipient.

2. CERTAINTY. A knowledge and understanding of revenue sources increase the reliability of the revenue system. The City will understand its revenue sources and enact consistent collection policies to provide assurances that the revenue base will materialize according to budgets and plans.

3. EQUITY. The City shall make every effort to maintain equity in its revenue system structure; i.e., the City shall seek to minimize or eliminate all forms of subsidy between entities, funds, services, utilities and customers. The City shall require that there be a balance in the revenue system; i.e., the revenue base will have the characteristic of fairness and neutrality as it applies to cost of service.

4. ADMINISTRATION. The benefits of a revenue source will exceed the cost of collecting and administering the revenue program. The cost of collection will be reviewed annually for cost effectiveness as a part of the indirect cost and cost of services analysis. Where appropriate, the City will use the administrative processes of the State, Federal or other collection agencies in order to reduce administrative costs.

5. DIVERSIFICATION AND STABILITY. In order to protect from fluctuations in a revenue source due to fluctuations in the economy and variations in weather, a diversified revenue system will be maintained which has a stable source of income. This stability is also achieved by a balance between elastic and inelastic sources of revenues.

6. GRANTS AND RESTRICTED REVENUES. In order to maintain flexibility in the revenue system, restricted revenues will be kept to a minimum, and shall be pursued on a cost-benefit basis. All grants and other federal/state, and restricted funds shall be managed and accounted to comply with the laws, regulations, and guidance of the grantor.

The City will review all grant submittals requiring an in-kind match requirements to determine their potential impact on the operating budget, and the extent to which they meet the City’s policy objectives. If there is a cash match requirement, the source of funding shall be identified and approved prior to application. Prior to submission, all grant requests/applications shall be reviewed by the City Manager to ensure the benefits to the City exceeds the administrative costs incurred through the life of the grant.

The City will terminate grant-funded programs and associated positions as directed by the City Council when grant funds are no longer available, unless alternate funding is identified.

B.SOURCES OF REVENUES. The following considerations and issues will guide the City in its revenue policies concerning specific sources of funds:

1. COST/BENEFIT OF ABATEMENT. The City will analyze the benefit of any tax or fee incentives that are used to encourage development. Ideally, a cost/benefit (fiscal impact) analysis will be performed as a part of such analysis. Tax abatements may be offered on improvements to real property owned by the applicant. The abatement will not be ordinarily considered for projects which would be developed without such incentives unless it can be demonstrated that higher development standards or other development and community goals will be achieved through the use of the abatement.

2. NON-RECURRING REVENUES. One-time or non-recurring revenues will not be used to finance current ongoing operations. Non-recurring revenues should be used only for one-time expenditures such as capital needs.

3. PROPERTY TAX REVENUES. All real and business personal property located within the City shall be valued at 100% of the fair market value for any given year based on the current appraisal values supplied to the City by the Tarrant County Appraisal District. Total taxable valuation will be reappraised and reassessed in accordance with State statute, in order to maintain current market values. A 98%

collection rate shall serve each year as a goal for tax collections. All taxes shall be aggressively pursued each year by the City's appointed tax assessor/collector. Tax accounts delinquent July 1st shall be submitted for collection each year to an attorney selected by the City Council. A penalty shall be assessed on all property taxes delinquent in accordance with State law and shall include all court costs, as well as an amount for compensation of the attorney as permitted by State law and in accordance with the attorney's contract with the City.

4. SALES AND USE TAX REVENUE. The State Comptroller Office collects, administers and disburses this revenue each month. The Texas sales and use tax rate is 6.25%, but local taxing jurisdictions may also impose a sales and use tax up to 2% for a total maximum combined rate of 8.25%.

The City, through its Economic Development Corporation, will encourage and participate in economic development efforts to expand the City’s economy, to increase local employment and to invest in the community when there is a defined specific long-term return.

5. INTEREST INCOME. Interest earned from investment of available funds, whether pooled or not, will be distributed to the funds in accordance with the operating and capital budgets which, wherever possible, will be in accordance with the equity balance of the fund from which funds were provided to be invested.

6. USER-BASED FEES AND SERVICE CHARGES. For services associated with a user fee or charge, the direct and indirect costs of that service will be offset by a fee where possible. There will be an annual review of fees and charges to ensure that fees provide adequate coverage of costs of services. User charges may be classified as "Full Cost Recovery", "Partial Cost Recovery," and "Minimal Cost Recovery," based upon City Council approval.

7. UTILITY RATES. The City will review and/or adopt utility rates annually that will generate revenues required to fully cover operating expenditures, meet the legal restrictions of all applicable bond covenants (when applicable), and provide for an adequate level of working capital. This policy does not preclude drawing down cash balances to finance current operations. However, it is best that any extra cash balance be used instead to finance capital projects.

EXPENDITURE CONTROL

A. APPROPRIATIONS. The level of budgetary control is at the Department budget level in the General and Proprietary Funds, and at the fund level in all other funds. When budget adjustments within a department are necessary, these must be approved by the City Manager, provided the transfer amounts between general classifications of expenditures do not result in a net increase in total appropriations. When budget adjustments between funds are necessary, these must be approved by the City Council through a budget amendment.

All budget appropriations (except for capital projects) lapse at year-end (September 30). Any encumbered appropriations at year-end may be re-appropriated by the City Manager in the ensuing fiscal year. Such reappropriations shall be subsequently reporting to the City Council. Except in emergency situations, and only upon approval by the City Council, no department shall exceed appropriations.

B. AMENDMENTS TO THE BUDGET. The City Council shall approve any budget modification resulting in net increase in appropriations, or any proposed use of available funds.

C. CENTRAL CONTROL. Significant salary (vacancy) or capital budgetary savings in any Department will be centrally controlled and may not be spent by the Department without the prior authorization of the City Manager.

D.PURCHASING. All purchases should be in accordance with the City's purchasing policies as defined in the Purchasing Policy. The City’s procurement process is governed by state and federal law, as well as the City’s Purchasing Policy.

PROMPT PAYMENT. All invoices approved for payment shall be paid by the Finance Department within thirty (30) calendar days of receipt. Procedures will be used to take advantage of all purchase discounts where considered cost effective. However, payments will also be reasonably delayed in order to maximize the City’s investable cash, where such delays does not violate the agreed upon payment terms.

F. EQUIPMENT FINANCING. Equipment is accounted for at the original acquisition cost, which includes purchase price plus any costs incurred to place the equipment in service. Equipment may also be leased or financed when the unit purchase price is $50,000 or more and the useful life is at least three years.

G. RISK MANAGEMENT. The City will aggressively pursue every opportunity to provide for the Public's and City employees' safety and to manage its risks. The goal shall be to minimize and/or prevent the financial impact to the City due to claims or losses through risk transfer and liability insurance.

H. INTERGOVERNMENTAL RELATIONS. When feasible, the City will coordinate efforts with other governmental agencies to achieve common policy objectives, share the cost of providing government services on an equitable basis, support appropriate favorable legislation at the state and federal levels, share facilities and develop joint programs to improve service to its citizens.

ASSET MANAGEMENT

A. INVESTMENTS. The City shall invest funds in accordance with the provisions of the current Bank Depository Agreement and/or in any negotiable instrument that the Council has authorized under the provisions of the Public Funds Investment Act, and in accordance with the City’s Investment Policy.

B. CASH MANAGEMENT. The City's cash flow will be managed to maximize the cash available to invest. Such cash management will entail the centralization of cash collections, where feasible, including property tax payments, utility bills, municipal fines, building and related permits and licenses, and other collection as appropriate. Cycle billing will be used where appropriate.

C. FIXED ASSETS AND INVENTORY. These assets will be reasonably safeguarded and properly accounted for, and prudently insured. A fixed asset of the City shall be defined as a purchased or otherwise acquired piece of equipment, vehicle, furniture, fixture, capital improvement, addition to existing capital investments, land, buildings, or infrastructure. The cost or value of any such acquisition must be $5,000 or more within an expected useful life greater than two years. All departments with inventory are required to conduct a physical inventory under their control on at least an annual basis.

D. DEPOSITORIES. The City will enter into a depository agreement with one or more banks for a specified period of time and specified fess for banking services. The term of each depository agreement shall not exceed five (5) years unless otherwise approved by the City Council.

CAPITAL BUDGET AND IMPROVEMENT PROGRAM

A. PREPARATION. The City will endeavor to develop a capital budget which will include all capital projects and all capital resources. The budget will be prepared annually on a fiscal year basis. The capital budget will be prepared by the City Manager or designee with the involvement of all required departments.

Capital improvements for planning purposes shall be considered all land, land improvements, building projects, infrastructure (i.e., streets/drainage, water and wastewater improvements) and equipment.

B. CONTROL. All capital project expenditures must be appropriated in the capital budget. The Finance Department must certify the availability of such appropriations or the availability of resources so any appropriation can be made before a capital project contract is presented to the Town Council for approval.

C. PROGRAM PLANNING. The capital budget will include capital improvements program plans for future years. The planning time frame should normally be at least five (5) years. The replacement and maintenance

for capital items should also be projected for the next five (5) years. Future maintenance and operational costs will be considered, so that these costs are included in the annual operating budget.

D. INFRASTRUCTURE MAINTENANCE. The City recognizes that deferred maintenance increases future capital costs. Therefore, and when available, a portion of the appropriate fund's budget will be set aside each year to maintain the quality of the City’s infrastructure. The inclusion of infrastructure maintenance and replacement costs in the current operating budget places the burden of the costs and repairs on the current users of the systems.

E. REPORTING. Periodic financial reports will be prepared to enable the Department Managers/Directors to manage their capital budgets and to enable the Finance Department to monitor and control the capital budget as authorized by the City Manager. Summary capital projects status reports should be presented to the Council periodically.

FINANCIAL CONDITIONS AND RESERVES

A. OPERATIONAL COVERAGE -NO OPERATING DEFICITS. The City will maintain an operational coverage factor of 1.00, such that current operating revenues (plus approved fund balance appropriations) will equal or exceed current operating expenditures. Deferrals, short-term loans, or one-time sources will be avoided as budget balancing techniques. Reserves will be used only for emergencies or non-recurring expenditures, except when balances can be reduced because their levels exceed guideline minimums as stated in Paragraph B.

B. GENERAL GOVERNMENT RESERVES A key element of the financial stability of the City is to establish guidelines for fund balance. Unassigned fund balance is an important measure of economic stability. It is essential that the City maintain adequate levels of unassigned fund balance to mitigate financial risk that can occur from unforeseen revenue fluctuations, unanticipated expenditures and similar circumstances.

It is the goal of the City that the unassigned fund balance of the General Fund should be a minimum of 90 days (24.66%) of the General Fund annual expenditures. A fund balance reserve may be maintained for general governmental capital projects. The reserve will be funded with operating surpluses. The reserve will be used for major capital outlays related to unplanned/emergency projects. As soon as practicable after each fiscal year end when annual operating results are known, any General Fund operating surplus in excess of budget, not required to meet ending resource requirements, may be transferred to the reserve with the approval of City Council.

Use of unassigned fund balance/net position (unrestricted retained earnings) may be used in a combination of the following:

-One time expenditures that do not increase recurring operating costs;

-Major capital purchases; and

-Start-up expenditures for new programs undertaken at mid-year provided such action is considered in the context of multiyear projections of program revenues and expenditures.

Each Proprietary Fund working capital should be maintained at least at the 24.66% of total operating expenditures or the equivalent of 90 days.

Should the balances fall below the minimum level set as the objective for that fund, the City will take action necessary to restore the unrestricted fund balance/net position to minimal fund reserve required levels. Loans between funds are allowable to be used only on a temporary basis and only upon Council approval.

C. FUND BALANCE CLASSIFICATION – Governmental Funds

1. Governmental funds report aggregate amounts of five classifications of fund balance based on the constraints imposed on the use of these resources:

a. Nonspendable. Includes amounts that cannot be spent because they are either not spendable in form (such as prepaids or inventory) or are legally or contractually required to be maintained intact (such as endowment funds).

b. Restricted. Includes amounts restricted by external sources (such as creditors, laws of other governments, etc.) or by constitutional provision or enabling legislation.

c. Committed. Includes amounts constrained to specific purposes by a government itself, using its highest decision-making authority to be reported as committed. Amounts cannot be used for any other purpose unless the government takes the same highest level action to remove or change the constraint (such as a City Ordinance or Resolution)

d. Assigned. Includes amounts a government intends to use for a specific purpose; intent can be expressed by the governing body or by an official or body to which the governing body delegates authority. The City Council has the authority to assign amounts for specific purposes.

e. Unassigned. All amounts not included in other spendable classification.

2.Ending fund balances of the City shall be reported according to the following classifications:

DEBT SERVICE FUNDS:

010 Interest & Sinking Fund – Restricted

SPECIAL REVENUE FUNDS:

024 Court Security Fund – Restricted

026 RH Economic Development Corp - Restricted

039 Court Technology Fund - Restricted

065 Crime Control District Fund - Restricted

067 Keep Richland Hills Beautiful - Assigned

077 Hotel Occupancy Tax – Restricted

089 Tax Increment Financing Fund – Restricted

103 Link Replacement Fund – Assigned

104 Emergency Operations Management Fund - Assigned

CAPITAL PROJECT FUNDS:

012 Oil & Gas Lease Fund – Assigned

020 Capital Project Fund – Assigned

025 Road & Street Improvement Fund – Restricted

030 Vehicle Replacement Fund - Assigned 101 ARPA Fund – Restricted 107 Strategic Initiative Fund – Assigned

3. Order of expenditure -- When committed, assigned and unassigned resources can be used for the same purpose, funds shall be spent in the sequence of committed resources first, assigned second, and unassigned last.

4. When it is appropriate for fund balance to be assigned, the Council may delegate that authority to the City Manager.

D. CAPITAL PROJECTS AND DEBT SERVICE FUNDS

1. Items in the Capital Projects Funds will be completed and paid for within 36 months of receipt of bonds proceeds. Balances will be used to generate interest income to offset construction costs.

2. The City's policy and bond ordinance requirements are to maintain general bonded debt service reserves at the level of the average annual debt service. Total direct debt shall not exceed ten (10) percent of the assessed value of taxable property.

3. Revenue obligations will maintain Debt Coverage Ratios as specified by the bond covenants. The City is currently required to have net revenues in excess of average annual debt by 1.25 times. Net revenues must also exceed the maximum outstanding debt by 1.10 times. Both these tests must be met in order to issue additional bonds.

4. Obligations of the Richland Hills Economic Development Corporation Fund and the Hotel Occupancy Tax fund will maintain coverage ratios as specified by bond covenants, when applicable. If the City issues obligations partially secured by a limited pledge of the corporations’ sales tax revenues and/or hotel occupancy tax revenue not subject to the coverage ratios of the revenue bond covenants, coverage shall be maintained at no less than 1.25 times average annual debt service, and 1.15 times the maximum annual debt service. Both of these tests must be met in order to issue additional bonds.

TREASURY AND DEBT MANAGEMENT

A. CASH MANAGEMENT. Periodic review of cash flow position will be performed to determine performance of cash management. A detailed policy structure will be followed with respect to Cash/Treasury Management. The underlying theme will be that idle cash will be invested with the intent to 1) safeguard assets, (2) maintain liquidity, and 3) maximize return. Where legally permitted, pooling of investments will be performed.

B. INVESTMENTS. The City will adhere to the investments authorized through the Public Funds Investment Act and will additionally establish, review and approve a comprehensive Investment Policy and Investment Strategies on an annual basis. Such policy will clarify acceptable investment securities, brokers, terms and other pertinent investment information.

C. TYPES OF DEBTS

1. SHORT-TERM DEBT. Short-term debt shall be defined as debt requiring five (5) years or less to retire, and may be used to fund purchases of machinery, equipment (including office equipment) and vehicles.

2. LONG-TERM DEBT. Long-term debt will not be used for operating purposes, and the life of a bond issue will not exceed the useful life of a project financed by that bond issuance. A resolution of intent to issue bonds authorizing staff to proceed with the preparations shall be presented for consideration to the City Council when appropriate.

Certificates of obligation may be issued to finance permanent improvements and land acquisition if needed between bond elections. The life of the certificates of obligation issued to finance equipment shall match the life of the equipment, which is usually three (3) to five (5) years. Certificates of obligation may be backed by a tax pledge under certain circumstances as defined by law. They may also be backed by a combination tax and revenue pledge. When appropriate, self-supporting revenues will pay debt service in lieu of tax revenues.

The City shall obtain voter authorization before issuing General Obligation Bonds as required by law. Voter authorization is not required for the issuance of Revenue Bonds. However, at the City’s discretion, the City may elect to obtain voter authorization for Revenue Bonds.

D. FINANCING ALTERNATIVES. The City will explore all financing alternatives in addition to long-term debt including leasing, grants and other aid, developer contributions, impact fees and use of reserves of current available funds.

E. DISCLOSURE. Full disclosure of operations will be made to the bond rating agencies and other users of financial information. The City staff, with the assistance of financial advisors and bond counsel, will prepare the necessary materials for presentation to the rating agencies, will aid in the production of Offering Statements, and will take responsibility for the accuracy of all financial information released.

F. FEDERAL REQUIREMENTS. The City will maintain procedures to comply with arbitrage rebate and other Federal requirements.

G. DEBT STRUCTURING. The City will issue general obligation bonds with an average life of 20 years or less, not to exceed the life of the asset acquired. Total debt service requirements (principal and interest) in any fiscal year should generally not exceed twenty-five (25) percent of total expenditures/expenses. The structure should approximate level debt service unless operational matters dictate otherwise or if market conditions indicate a potential savings could result from modifying the level payment stream. Consideration of market factors, such as the tax-exempt qualification, minimum tax alternative, and so forth will be given during the structuring of long-term debt instruments.

H. DEBT ISSUANCE.

1. Bond Elections. Before a bond election, the City Manager, Finance Committee and City Councilmembers will be provided with competent debt capacity analyses, tax and user fee impact projections and other information as directed by the City Manager. The Bond Counsel and Financial Advisor will provide support during the process.

2. Method of Sale. The City will use a competitive bidding process in the sale of bonds unless the nature of the issue warrants a negotiated bid. In situations where a competitive bidding process is not elected, the City will publicly present the reasons why, and the City will participate with the financial advisor in the selection of the underwriter or direct purchaser.

3. Bidding Parameters. The notice of sale will be carefully constructed so as to ensure the best possible bid for the City in light of the existing market conditions and other prevailing factors. Parameters to be examined include:

• Limits between lowest and highest coupons

• Coupon requirements relative to the yield curve

• Method of underwriter compensation, discount or premium coupons

• Use of True Interest Cost (TIC) vs. Net Interest Cost (NIC)

• Use of bond insurance

• Original Issue discount bonds/Capital Appreciation Bonds

• Variable rate bonds

• Call provisions

4. Bond Issuance Costs. The City will be involved in the selection of all financial advisors, underwriters, paying agents, and bond counsel. The City shall evaluate the merits of rotating professional advisors and consultants and the kinds of services and fee structures available from independent financial advisors, investment banking firms, and commercial banks. The City will carefully itemize and scrutinize all costs associated with the issuance of bonds.

5. Bond Counsel Involvement. The Bond Counsel will issue an opinion as to the legality and tax exempt status of any obligations. The City will also seek the advice of the Bond Counsel on all other types of financing and on any other questions involving federal tax or arbitrage law. Bond Counsel is also responsible for the preparation of the ordinance authorizing issuance of obligations and all of the

closing documents to complete their sale and will perform other services as defined by contract approved by Council.

6. Financial Advisor. The City will seek the advice of the Financial Advisor when necessary. The financial advisor will be expected to provide planning and analytical services which extend beyond the issuance of debt. To ensure independence, the Financial Advisor will not bid on nor underwrite any City debt issues.

7. Ratings. The rating agencies will be notified either by telephone or through written correspondence when the City begins preparation for a debt issuance. After the initial contact, a formal ratings application will be prepared and sent along with the draft of the Official Statement related to the bond sale to the rating agencies. This application and related documentation should be sent several weeks prior to the bond sale to give the rating agencies sufficient time to perform their review. Meetings with representatives of the rating agencies should be scheduled every few years or whenever a major project is initiated.

8. Official Statement. Information for the Official Statement is gathered from departments throughout the City. The Finance Director will begin assembling the information needed to update the Official Statement. At least eight (8) weeks prior to an anticipated bond issuance.

I. DEBT REFUNDING – City staff and the financial advisor shall monitor the municipal bond market for opportunities to obtain interest savings by refunding outstanding debt. A proposed refunding debt, for interest cost savings, should provide a present value benefit as a percent of refunded principal of at least 5%.

INTERNAL CONTROLS

A. WRITTEN PROCEDURES. Written procedures will be established and maintained by the Finance Director for all functions and financial cycles including cash handling and accounting. These procedures will embrace the general concepts of fiscal responsibility set forth in this policy statement.

B. DEPARTMENTAL DIRECTORS/ MANAGERS RESPONSIBILITY. City administrators and manager/supervisors are charged with the responsibility for establishing a network of processes with the objective of controlling the operations of the City in a manner which provides reasonable assurance that:

1. Data and information published either internally or externally is accurate, reliable, complete and timely.

2. The actions of administrators and employees are in compliance with the City’s plans, policies and procedures and all relevant laws and regulations.

3. The City’s resources including its people, systems, data/information, assets and citizens are adequately protected.

4. Resources are acquired economically and employed effectively.

5. The City’s internal controls promote the achievement of plans, programs, goals and objectives. Each Department Director/Manager is responsible to ensure that good internal controls are followed throughout his/her Department, that all Finance Department directives or internal controls are implemented and that all independent auditor internal control recommendations are addressed.

STAFFING AND TRAINING

A.ADEQUATE STAFFING. Staffing levels will be adequate for the fiscal functions of the City to operate effectively. Overtime shall be used only when necessary. Workload shedding alternatives will be explored before adding staff.

B.TRAINING. The City will support the continuing education efforts of all financial staff including the investment in time and materials for maintaining a current perspective concerning financial issues. Staff will be held accountable for communicating, teaching, sharing with other staff members all information and training materials acquired from seminars, conferences, and related education efforts.

C.AWARDS,

CREDENTIALS

AND RECOGNITION. The City will support efforts and involvements which result in meeting standards and receiving exemplary recitations on behalf of any of the City's fiscal policies, practices, processes, products, or personnel. The City will strive to maintain a high level of excellence in its accounting policies and practices as it prepares its Annual Financial Report. If feasible, the report will be presented to the Government Finance Officers Association (GFOA) for review of qualifications necessary to obtain the Certificate of Achievement for Excellence in Financial Reporting. Additionally, the City will consider the submission of its annual budget to GFOA for consideration for Distinguished Budget Award.

ANNUAL POLICY REVIEW AND REPORTING

These policies will be reviewed administratively by the City Manager and Finance Director at least annually, prior to the preparation of the operating budget and will be presented to the City Council for confirmation of any significant changes.

The Finance Director will report annually to the Finance/Audit Committee on compliance with these policies.

History of Richland Hills

The City of Richland Hills was incorporated into the “town of Richland Hills” on September 23, 1950, by a total of 35 votes (34 votes for incorporation and 1 voided vote). The residents of Richland Hills named the town because of its rich soil, rolling land and hills. The location of the town was desirable because of its proximity to Highway 183 and the cities of Dallas and Fort Worth. However, the town of Richland Hills was sought after because it was far enough away from the big cities to provide with a quiet, country- like lifestyle.

Richland Hills was incorporated as a General Law city. On October 21, 1950, the citizens of Richland Hills elected its first Mayor, A. F. Gracy. Richland Elementary school opened on September 1, 1953 with a total student capacity of 480. In early September 1953, property from the Mathews subdivision (Diana Drive) was deeded to the Town for city usage and the first City Hall was constructed Richland Junior High School opened in 1956 with a total student capacity of 780.

On August 17, 1973, groundbreaking ceremonies began for the construction of a new 6,000 sq. ft. City Hall on Diana Drive. A Home Rule Charter was adopted in 1986 by the citizens of Richland Hills, which provides for a Council-Manager form of government. The Council is composed of a Mayor and five council members. Richland Hills is conveniently located near Fort Worth with 3 State Highways that pass through the City: Texas State Highway 183 (Baker Blvd.), State Highway 121 (Airport Freeway) and State Highway 26 (Boulevard 26). There are 6 parks in Richland Hills: Kate Baker Park, Rosebud Park, Creek Trail Park, LINK Plaza Park, Hike & Bike Trail and Windmill Park.

The City is served by the Birdville Independent School District. The City has a total area of 3.14 square miles.

As of the 2020 census, there were 8,621 people in Richland Hills.

(a)Non-Hispanic(10) data.census.gov

APPENDIX C – LONG TERM FINANCIAL PLAN

The General Fund Long-term Financial Plan accounts for the future operating needs of the General Fund. It is a planning document that serves as a guideline for budgeting and for managing the resources of the city. City staff prepares and updates this five-year financial plan annually in preparation for developing suggested budget policies for City Council consideration and to ensure alignment with City Council Goals and Strategies. It is intended to provide a frame of reference to help evaluate the City’s financial condition and help assess financial implications of current and proposed budgets, programs, and assumptions.

The General Fund Long-term Financial Plan takes into consideration increased operational demands because of Richland Hills’ anticipated population growth, as well as the operational impact of capital projects. Projections of future revenues and expenditures are estimated based on the City’s current sources of revenue and level of service at the time the plan is developed. Projections may not occur or may occur differently from the amounts planned because of changes to the many assumptions. Projections include five years of operational costs related to the Capital Improvement Program (CIP), which are listed in the Capital Projects section under Impact of Capital Projects on Operating Budget. Adjustments and other operating expenditures are also included, but endorsement of the plan for general management and financial purposes requires authorization by proper actions of the City Council.

Revenues for the plan are projected at conservative levels and are compared to expenditure increase estimates. The primary variables are the rate of increase in revenues, and new projects or programs planned during the projection period. The City’s General Fund revenue primarily comes from property taxes, sales tax, and franchise fees. The remainder comes from licenses/permits, charges for service, fines, and interest income.

This financial plan does not consider planned debt issuance. Council anticipates issuing debt during the FY2023 budget year; however, the final numbers were not available at the time this budget was prepared.

FIVE YEAR LONG TERM FINANCIAL PLAN

These projections do not take into account the issuance of new debt.

The long-term financial plan assumes that the property tax values will increase by 5%. Sales tax revenues are assumed to increase an average of 9% as has been historically. All other revenues are projected to increase between 3-5%. Expenditures per department consider the addition of positions that are affected by the addition of new capital projects. They do not consider the addition of any other personnel including public safety. Pay increases of 3% have been added to the projections. An average increase in operational costs of 8% is assumed across all departments, except for Shared Services which averages a 5% increase for 5 years.

These projections are subjective and will change from year to year as new positions are created and new debt is issued. A new five-year financial plan will be created as circumstances change.

APPENDIX D – AUTHORIZED POSITIONS

AUTHORIZED POSITIONS-FULL TIME EQUIVALENTS (FTE)

Last 5 Fiscal Years

APPENDIX E – ORDINANCES

APPROVED AND ADOPTED at a regular meeting of the Richland Hills City Council on September 26, 2022, by a vote of:

Douglas Knowlton, Councilmember, Place 1

Travis Malone, Councilmember, Place 2

Curtis Bergthold, Mayor Pro Tern, Place 3

Javier Alvarez, Councilmember, Place 4

G. W. Estep, Councilmember, Place 5

APPROVED: 11,4, -- 4:fi-

The Honorable Mayor Prc' Tem Curtis Bergthold

APPROVED- AS TO FORM:

James onovan, City Attorney

the City Council without the incorporation in this Ordinance of any such unconstitutional phrase, clause, sentence, paragraph or section.

SECTION 11.

This Ordinance shall be in full force and effect from and after its passage.

APPROVED AND ADOPTED at a regular meeting of the Richland Hills City Council on September 26, 2022, by a vote of 5 ayes, `.-) nays, and abstentions.

APPROVED:

APPROVED AS TO FORM:

Ja es Donovan, City Attorney

APPENDIX F – GLOSSARY AND ACRONYMS

Accounts Payable- A short-term liability account reflecting amounts owed to private persons or organizations for goods and services received by a government (but not including amounts due to other funds of the same government or to other governments).

Accounts Receivable -An asset account reflecting amounts owed by private individuals or organizations for goods and services furnished by a government.

Accrual Basis-Accrual basis accounting provides for recording revenues when earned and expenses when incurred.

Ad Valorem-A tax based on the value of real (land and buildings) and personal (equipment and furniture) property.

Appropriation- A legal authorization granted by a legislative body (City Council) to make expenditures and to incur obligations for designated purposes.

Arbitrage- The investment of bond proceeds in higher yielding securities, resulting in interest revenue in excess of interest costs.

Assessed Valuation- A valuation set upon real estate or other property by a government as a basis for levying taxes. Property values are established by the Central Appraisal District.

Assets- Resources owned or held by the City, which have monetary value.

Assigned Fund Balance- Represents resources set aside (“earmarked”) for an intended use established by the City Council or by their designated body or official.

Audit- The inspection of accounts and records by an independent certified public accounting firm designated by the City Council to ascertain the accuracy of financial statements provided by the City.

Balanced Budget- The expenses/expenditures do not exceed the budgeted revenue plus the unassigned fund balance.

Bond-A written promise to pay a specified sum of money, called the face value or principal amount, at a specified date or dates in the future, called the maturity date(s), together with periodic interest at a specified rate.

Budget- A plan of financial operation embodying an estimate of proposed expenditures for a given period and the proposed means of financing them.

Budget Amendment- To amend or increase the original adopted budget of the governmental entity by members of the governmental entity’s board or council.

CCPD-Crime Control Prevention District is a component unit that is funded with voter approved .37% sales tax dedicated to crime reduction programs.

Capital Expenditures/Outlays- Expenditures that result in the acquisition of or addition to fixed assets that are priced more than $5,000.

Capital Improvement Program (CIP)- The process of planning, monitoring, programming, and budgeting over a multi-year period used to allocate the City’s capital monies.

Capital Projects Fund- A fund created to account for financial resources to be used for the acquisition or the construction of major capital facilities or equipment.

CDB -An acronym for Community Development Block Grant, which is an annual federal grant that can be used to revitalize neighborhoods and expand affordable housing.

Certificates of Obligations (CO’s)- Similar to general obligation bonds except the certificates require no voter approval.

Committed Fund Balance- Self-imposed limitations set in place prior to the end of the fiscal period. These amounts can be used only for the specific purposes determined and approved by formal action of the City Council, which is the highest level of decision-making

authority for the City. The same level of formal action is required to remove the constraint.

Component Unit- Legally separate organization for which the elected officials of the primary government are financially accountable.

Contractual Services- The costs related to services performed for the City by individuals, business, or utilities.

Cost- The amount of money or other consideration exchanged for goods or services. Costs may be incurred even before money is paid; that is, as soon as liability is incurred. Ultimately, however, money or other consideration must be given in exchange.

Debt Service Fund- A fund used to account for the monies set aside for the payment of interest and principal to holders of the City’s general obligation and revenue bonds, the sale of which finances long-term capital improvements, such as facilities, streets and drainage, parks and water/wastewater systems.

Depreciation- All costs associated with the acquisition of fixed assets are amortized over the expected useful life of the asset.

Distinguished Budget Presentation Awards ProgramA voluntary awards program administered by the GFOA to encourage governments to prepare effective budget documents.

Encumbrances- Commitments related to unperformed contracts for goods or services. Used in budgeting, encumbrances are not GAAP expenditures or liabilities, but represent the estimated amount of expenditures ultimately to result if unperformed contracts in process are completed.

Enterprise Fund-A fund established to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges.

Exempt- Personnel who are not eligible to receive overtime pay and are expected to put in whatever hours are necessary to complete their job assignments. The respective department head, as partial compensation for overtime hours worked, may allow compensatory time off.

Expenditures- The actual outflow of funds paid for an asset obtained or goods and services obtained.

Fiscal Year- A 12-month period to which the annual operating budget applies and at the end of which a government determines its financial position and the results of its operations. The City’s fiscal year begins October 1st and ends September 30th.

FTE- An acronym for full time equivalent. A measurement of staffing. One FTE is a 40-hour per week position. A part-time position working 20 hours per week or a temporary full-time position working six months would be ½ FTE.

Fixed Assets- Long-lived tangible assets such as land, buildings, building improvements, machinery, and equipment.

Franchise- A special privilege granted by a government, permitting the continued use of public property, such as city streets, and usually involving the elements of monopoly and regulation.

Franchise Fee-A fee paid by public service utilities for use of public property in providing their services.

Fund- A fiscal and accounting entity with a selfbalancing set of accounts in which cash and other financial resources, together with all related liabilities and residual equities, or balances, and changes therein, are recorded and segregated to carry on specific activities or attain certain objectives in accordance with special regulations, restrictions, or limitations.

Fund Balance- The difference between governmental fund assets and liabilities, also referred to as fund equity.

Fund Balance Classifications- A hierarchy based primarily on the extent to which the City is bound to observe the constraints imposed upon the use of the resources reported in governmental funds in accordance with GASB Statement No. 54. Fund balance classifications, under GASB 54 are Nonspendable, Restricted, Committed, Assigned, and Unassigned.

GAAP- Generally accepted accounting principles as determined through common practice or as promulgated by accounting standard setting bodies.

General Fund- The fund used to account for all financial resources, except those required to be accounted for in another fund. The General Fund is tax supported.

General Obligation Bonds- Bonds backed by the full faith and credit of the issuing government. In issuing its general obligation bonds, the City pledges to levy whatever property tax is needed to repay the bonds for any particular year. Bonds cannot be issued without voter approval and are usually issued with maturities of between 15 and 30 years.

GFOA-Government Finance Officers Association. A professional association of state/provincial and local finance officers dedicated to the sound management of government financial resources

Governmental Funds- Those funds through which most governmental functions of the City are financed. The acquisition use and balances of expendable financial resources and the related liabilities are accounted for through governmental funds (General, Special Revenue, Capital Projects, and Debt Service funds).

Grant- A contribution by a government or other organization to support a particular function. Grants may be classified as categorical or block depending upon the amount of discretion allowed the grantee.

Infrastructure- Long-lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples include streets, water and sewer systems, public buildings, and parks.

Liabilities- Debt or other legal obligation arising out of transactions in the past, which must be liquidated, renewed, or refunded.

Maintenance- The upkeep of physical properties in condition for use or occupancy. Examples are the inspection of equipment to detect defects and the making of repairs.

Major Fund- The funds whose revenues, expenditures/expenses, assets, or liabilities (excluding extraordinary items) are at least 10 percent of corresponding totals for all governmental or enterprise funds and at least 5 percent of the aggregate amount for all governmental and enterprise funds.

Minor Fund- A summarization of all other governmental or proprietary funds that are not considered major funds.

Modified Accrual Basis- Under modified accrual basis, revenues susceptible to accrual are accrued. Revenues are considered to be susceptible to accrual if they are both measurable and available to finance governmental operations during the current fiscal year.

Non-Exempt- Personnel eligible to receive overtime pay when overtime work has been authorized or requested by the supervisor.

Non-Spendable Fund Balance- Fund balance that is (a) not in a spendable form such as prepaid items or (b) legally or contractually required to be maintained intact such as an endowment.

Operating Budget- Plans of current expenditures and the proposed means of financing them. The annual operating budget is the primary means by which most of the financing, acquisition, spending, and service delivery activities of the City are controlled. State law requires the use of annual operating budgets.

Ordinance- A formal legislative enactment by the governing board of a municipality. If it is not in conflict with any higher form of law, such as a state statute or constitutional provision, it has the full force and effect of law within the boundaries of the municipality to which it applies. The difference between an ordinance and a resolution is that the latter requires less legal formality and has a lower legal status. Revenue raising measures, such as the imposition of taxes, special assessments and service charges, universally require ordinances.

Personnel Services- The costs associated with compensating employees for their labor. This includes salaries and fringe benefits.

Proprietary Funds- A fund established to account for operations that are financed and operated in a manner similar to private business enterprises. There are two types of proprietary funds: enterprise funds and internal service funds. Enterprise funds provide goods or services to the general public for a fee. Internal Service Funds are used to accumulate and allocate costs internally among the City’s various functions.

Purchase Order- A document that authorizes the delivery of specified merchandise or the rendering of certain services and the making of a charge for them.

Restricted Fund Balance- Fund balance that consists of amounts that can be spent only on the specific purposes stipulated by law or by the external providers of those resources as approved by the City Council or by their designated body or official.

RHDC-Richland Hills Development Corporation is a component unit, a separate legal entity from the City, which is financed with a voter approved .25% sales tax The purpose of the RHDC is to promote infrastructure improvements, parks and parks facilities, and economic development.

Revenues- All amounts of money received by a government from external sources other than expense refunds, capital contributions, and residual equity transfers.

RFP- Request for Proposal.

Special Revenue Fund- A fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditure for specified purposes

Supplemental- A budget request submitted during the budget process for a new program or an increase to current programs or services above the current budget level.

Supplies- A cost category for minor items (individually priced at less than $5,000) required by departments to conduct their operations.

Taxes- Compulsory charges levied by a government for the purpose of financing services performed for the common benefit. This term does not include specific charges made against particular persons or property for current or permanent benefits such as to paying such charges as, for example, sewer service charges.

Unassigned Fund Balance- Represents the residual classification of fund balance and includes all spendable amounts not contained within the other classifications.

ACRONYMS

ACA- Affordable Care Act

ADA- Americans with Disabilities Act

BA-Budget Amendment

CCPD- CRIME CONTROL PREVENTION DISTRICT

CIP- Capital Improvement Program

CO- Certificates of Obligation Bonds

EEO-Equal Employment Opportunity

EMS- Emergency Medical Service

EOC- Emergency Operations Center

EOY- End-of-year

ERP- Enterprise Resource Planning

FTE- FULL TIME EQUIVALENT

FY-FISCAL YEAR

GAAP- GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

GFOA- GOVERNMENT FINANCE OFFICERS ASSOCIATION

GO- GENERAL OBLIGATION BONDS

IT- INFORMATION TECHNOLOGY

MG- MILLION GALLONS

MGD- MILLION GALLONS PER DAY

NCTCOG-NORTH CENTRAL COUNCIL OF GOVERNMENTS

OPEB- OTHER POST EMPLOYMENT BENEFITS

PCARD- PROCUREMENT CARD

PO-PURCHASE ORDER

PT- PART TIME

PW- PUBLIC WORKS

RB- REVENUE BOND

RHDC- RICHLAND HILLS DEVELOPMENT CORPORATION

SH- STATE HIGHWAY

SRO- SCHOOL RESOURCE OFFICER

TIF- TAX INCREMENT FINANCING

TXDOT- TEXAS DEPARTMENT OF TRANSPORTATION

YTD- YEAR TO DATE

APPENDIX G – TOP TEN LISTS

TOP TEN WATER CUSTOMERS

TOP TEN SEWER CUSTOMERS