FY2020 Annual Budget FY2020 Budget Revenue Forecast, Debt Modeling, and Five Year Tax Supported CIP FY2020 Annual Budget Agenda • General Fund Revenue Projections • FY2020 Assessed Value Trends • Debt Modeling/CIP Capacity FY2020 Annual Budget Sales Tax Projection • Sales Tax – Largest revenue in the General Fund at 22% of the budget. – Primarily driven by the retail, food, information, and manufacturing sectors. These sectors make up about 75% of total sales tax revenue. SALES TAX Wholesale Utilities 8% 1% Retail 46% Food 11% Information 8% Manufactu ring 10% Other 14% Real Estate 2% FY2020 Annual Budget Retail Sector Breakdown Building Material General Merchandise Stores 12% 25% Food and Beverage Stores 5% 5% Motor Vehicle and Parts Dealers 5% Clothing and Clothing Accessories Stores Miscellaneous Store Retailers 5% 21% 9% Electronics and Appliance Stores 13% Nonstore Retailers Other FY2020 Annual Budget Sales Tax Projection Total Sales Tax Growth (City Wide) $33.00 $31.00 $31.75 $29.00 $29.75 $27.00 Millions $27.25 $25.00 $23.00 $25.10 $23.44 $21.00 $19.00 $17.00 $15.00 FY2016 Actual FY2017 Actual FY2018 Actual FY2019 Projected FY2020 Budget FY2020 Annual Budget Sales Tax Projection • Sales Tax – FY2019 Budget: $28,312,400 – FY2019 Projection: $29,750,000 (5% increase) – FY2020 Budget: $31,750,000 (6.7% increase) • Continued strong growth in the core sectors • New development like Holt Cat, Wolf Crossing, and Academy Sports + Outdoors. FY2020 Annual Budget Sanitation Projection Sanitation Revenue $10.00 $9.80 $9.75 $9.60 $9.40 Millions • Sanitation Revenue represents 13% of total revenues. • Projected to finish FY2019 at budget. • FY2020 is budget at $9.75 million, an increase of 3% over FY2019 projections. $9.45 $9.45 FY2019 Budget FY2019 Projected $9.20 $9.00 $8.80 $8.60 $8.76 $8.40 $8.20 FY2018 Actuals FY2020 Base Budget FY2020 Annual Budget Return on Investment (ROI) • ROI Revenue represents 11% of total general fund revenues. • ROI is comprised of a transfer from the Electric, Water, and Stormwater funds. • ROI is projected to end FY2019 at $7.27 million, or 6.4% less than budget. – Staff is proposing transferring only $3.825 M from the Electric Fund instead of the full budgeted amount of $4.325 M. • FY2020 Budget: – Accounts for natural growth in Water and Stormwater (3% increase) – Continues to lower ROI transfer in Electric for FY2020 FY2020 Annual Budget Fire/EMS Revenue Projection • This revenue group represents 10% of the general fund. • It is comprised of ESD 8 Contract ($3.5 M), EMS transport revenue ($2.6 M), and SAFER & TASPP grants ($826,000) • FY2019 is projected to end less than 1% below budget due to slightly less grant revenue being received. • FY2020 is budgeted at a 4% increase over FY2019 projections due to an increase in the ESD 8 contract and growth in the EMS system. FY2020 Annual Budget Franchise Fees Projections Millions • Franchise Fees represent 8% of the general fund revenues. • The City collects franchise fees on electric, water, cable TV, gas, telephone (land lines), stormwater, and irrigation. • Franchise fees in FY2019 are projected to end 3% higher than budget. The FY2020 Budget totals $5.89 M, or an increase of 5% from FY2019 projections. Franchise Fees $6.50 $6.00 $5.89 $5.50 $5.00 $5.27 $5.43 $5.59 $4.50 $4.00 $3.50 $3.00 FY2018 Actuals FY2019 Budget FY2019 Projected FY2020 Base Budget FY2020 Annual Budget Development Revenue Projections Development and Permit Fees $4.00 $3.73 $3.50 $3.52 $3.31 $3.00 Millions • Development revenue represents 5% of the general fund revenues. • Dev. Revenues in FY2019 are projected to end 13% higher than budget due to a one time payment of Master Development fees from MUDs in FY2019 of about $400,000. • The FY2020 Budget totals $3.52 M and continues growth in permits and planning fees. • After normalizing for the one-time payment, development fees overall are budgeted to increase by 5% relative to FY2019 $2.50 $2.86 $2.00 $1.50 $1.00 $0.50 $0.00 FY2018 Actuals FY2019 Budget FY2019 Projected FY2020 Base Budget FY2020 Annual Budget Parks and Rec Projections • Parks and Rec revenues represent 4% of the general fund revenues. • FY2019 is projected to end at $2.7 M, a variance to budget of $251,000. The variance in primarily due to Garey Park revenue which is projected to come in $175,000 less than budget (1st year of operations) • The FY2020 Budget totals $2.83 million. FY2020 Annual Budget Property Tax Revenue • Property tax revenues represents 20% of the general fund revenues. • FY2019 is projected to end at budget. FY2020 Annual Budget Property Tax Process • Assessed Value is certified on July 25th by Williamson County Central Appraisal District (WCAD). • After the certification date, City Staff meets with the Tax Assessor Collector’s Office and verifies the Truth in Taxation form. – This form calculates the effective rate and the rollback rate. – State requirement and must be published in the local paper. FY2020 Annual Budget Truth in Taxation • The effective rate is the rate the City would need to charge in order to produce the same amount of property tax revenues as last year while using the new valuations of the current year. Typically, property values appreciate from year to year. In most years, the increased value of a property means a lower tax rate could produce the same amount of revenue. For example, a home valued at $100,000 with a tax rate of 42 cents would produce $420 in property tax revenue. If in the following year, the home is now valued at $105,000, the effective rate would be 40 cents to produce the same $420 worth of revenue. The effective rate enables the public to evaluate the relationship between taxes for the prior year and for the current year. • The rollback rate is the maximum tax rate the City can set before the taxpayers can petition for an election to reduce the tax rate. After adjustments for debt calculations, the rollback rate is equal to the effective rate times 8%, or in this example 43.2 cents. ISI ?7:48 FY2020 Annual Bud et GEORGETOWN Truth in Taxation (TNT) Ex'Stmg Decrease Assessed Rollback Rate Value Decrease Sales Tax Rollback Rate Debt Service Increase Rollback Rate Payments Frozen Increase Rollback Rate Payments Increase TIRZ Rollback Rate New Assessed Increase Rollback Rate Value -contro ed by City Council action FY2020 Annual Budget Market Value by Segment (in billions) 10.00 0.61 9.00 0.40 8.00 7.00 0.25 6.00 0.18 5.00 0.45 4.00 0.52 1.04 0.97 0.30 0.51 1.16 3.00 2.00 0.33 0.48 1.23 3.95 4.49 4.91 5.41 FY2015 FY2016 FY2017 FY2018 Commerical Land 0.51 1.33 0.55 1.46 5.90 6.35 FY2019 FY2020 1.00 - Residential Multi-Family FY2020 Annual Budget Market Value in Billions Fiscal Year Residential Commercial Land FY2015 3.95 0.97 FY2016 4.49 1.04 FY2017 4.91 1.16 FY2018 5.41 1.23 FY2019 5.90 1.33 FY2020 6.35 1.46 0.45 0.52 0.51 0.48 0.51 0.55 Multi-Family 0.18 0.25 0.30 0.33 0.40 0.61 FY2020 Annual Budget Property Tax Process • Beginning in late April, WCAD starts posting the Assessed Values for the City. (Open to the public) • Typically, protest are at their highest in late May Row Labels 2019 5-1 5-17 5-28 6-5 6-11 6-21 6-25 Not under ProtestUnder Protest 5,384,548,265 5,018,146,512 4,025,653,079 4,230,872,031 4,423,169,441 4,666,242,853 5,008,619,588 897,364,298 1,271,575,171 2,236,196,741 1,993,208,783 1,789,756,433 1,512,959,835 1,164,716,262 % Under protest 14.28% 20.22% 35.71% 32.02% 28.81% 24.48% 18.87% FY2020 Annual Budget What’s Changed Since Last Year? ***Not Certified Values*** Segment Taxable Value Tax Ceiling Value FY2019 FY2020 % Var. 5,434,192,282 5,652,225,161 4.01% 2,602,161,482 2,783,483,757 6.97% New Value 251,898,659 375,002,284 48.87% TIRZ Value 234,588,009 356,041,024 51.77% FY2020 Annual Budget Tax Impact Debt Model • Developed in FY2016, the Five Year Debt Model is a tool to better understand the impacts of issuing debt. • Allows for scenario testing and the adjustment of multiple variables including assessed value, sales tax, tax rate distribution, and debt service requirements. FY2020 Annual Budet TEXA How the Model Works Projected Tax Increase Year 1 Year 2 Year 3 Year 4 Year 5 Existing Debt I New Debt Revenue FY2020 Annual Budget Assumptions • Small changes can have big impacts. – Example: • • • • $17,000,000 in revenue. 1% variance is $170,000. $1 Million of Debt Capacity = $67,000 of debt service $170,000/$67,000 = 2.53 million of debt capacity. • Assumptions –$275 M – $200 M of new growth and 4 - 3% growth in AV. Combined growth is 5 to 6 % growth year over year. –3.5% growth in tax ceiling revenue –Distribution of O&M and I&S tax ceiling remains constant. FY2020 Annual Budget What’s Changed Since Last Year? • Last Year: – A fiscally constrained CIP which would not have a tax rate impact needed to be sized at $75 million over five years or about $15 million a year. • Current Year: – A fiscally constrained CIP with no tax rate impact would be $85 million over five years or about $17 million a year. FY2020 Annual Budget Project Name Leander Road (Norwood to South West Bypass) Southwestern Blvd. Public Safety Vehicles - Fire Intersection Improvements Regional Trail Development 2015 Road Bond Priority 1 - Sidewalks Austin Avenue Bridges Body Cam Northwest Blvd Bridge - ROW Public Safety Vehicles - Police San Gabriel Park Westinghouse & Scenic Lake Traffic Signal Cardiac Monitors GMC Remodel Neighborhood Park Development Public Safety Vehicles - Police New SCBA Replacement Parks Master Plan ADA Transition Plan Radio Replacement Tennis Center Pool Demolition Tax Supported Five Year CIP Row Labels Public Safety - Fire Department Public Safety - Police Department Streets Grand Total Category Funding Streets 2015 GO Streets 2015 GO Fleet CO Streets 2015 GO Parks CO Streets 2015 GO Streets CO Public Safety - Police Department CO Streets 2015 GO Fleet CO Parks CO Streets 2015 GO Public Safety - Fire Department CO Facilities CO Parks CO Fleet CO Public Safety - Fire Department CO Parks CO Parks CO Other CO Parks CO FY2020 3,200,000 2,650,000 2,200,000 1,400,000 1,275,000 1,000,000 1,000,000 814,038 750,000 740,200 600,000 600,000 290,000 250,000 250,000 246,000 225,000 200,000 150,000 129,000 70,000 18,039,238 Sum of FY2020 Sum of FY2021 Sum of FY2022 Sum of FY2023 Sum of FY2024 515,000 515,000 300,000 814,038 10,600,000 9,700,000 12,000,000 12,400,000 2,000,000 18,039,238 17,723,278 18,514,000 16,491,500 8,474,400 FY2020 Annual Budget Next Steps • Estimate on the effective and the rollback rate at the Budget Workshop. • Certified tax roll on July 25th. FY2020 Annual Budet TEXAS Questions?