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rather than a 100% figure knowing it will produce a large revenue deficit by the end of the fiscal year. The
<br />$8,030,000.00 in the Proposed FY23/24 Budget represents this 97% value. This has been the practice for several years.
<br />In FY23/24, a number of factors have set in that have not occurred in recent years. Over the last three years since the
<br />beginning of SB -2, when the LCAD valuation is given to the City on July 25', there have been zero (0) properties
<br />still undergoing protest. In addition, there have been no instances of court appeals of valuation with the LCAD mid -
<br />fiscal year (following approval and implementation of a budget and tax rate). This year, as of July 251, there are still
<br />581 properties undergoing protest with LCAD and there were several court appeals of LCAD valuation mid -fiscal
<br />year for last year's valuation of certain properties. Both of these have played a role in impacting our growth
<br />calculations for FY23/24. The figures we have used for taxable value are the most conservative available to us by
<br />LCAD. As it turns out, maintaining the levy at $8,030,000.00 at the 97% collection rate, is just slightly beyond the
<br />3.5% growth allocation ($0.00255, or 1/5 of a cent). We do however still have unused growth from FY22/23 in the
<br />amount of $0.00681 that we can use to help bridge that gap. To accomplish a flat levy, which is recommended to
<br />accomplish the goals laid out in this memorandum, and given a 97% collection rate, we are proposing expanding the
<br />3.5% growth by $0.00255, thereby using up a portion of the unused FY22/23 growth allocation authorized under
<br />Texas Tax Code 26.04(c)(2)(B). This gives us a M & O tax rate of $0.32176 instead of $0.31921.
<br />The next key element typically of interest would be the balancing of the Operational Funds. The City of Paris has
<br />numerous Funds, the vast majority of which are Special Purpose Funds which will be discussed later in this
<br />memorandum. The Operational Funds are Fund 01 — General Fund, 03 — Airport Fund, 10 — Water and Sewer Fund,
<br />and 45 — Sanitation and Landfill Fund. These four funds make up the vast majority of the financial accounting and are
<br />what the City operates out of to perform its daily tasks. In addition, these four funds are unique from other special
<br />purpose funds in that they are supported primarily from taxes, fines, fees, and utility rates, thus the importance to
<br />balance them. Each year, city staff carefully examines the historical trends behind each line item in order to focus the
<br />budget while capturing and repurposing available funds for efficiency and to become even more effective in the duties
<br />we are tasked with performing to maintain services, all while keeping the property tax rate as low as possible. The
<br />following table shows the balancing of each of our operating funds:
<br />Fund
<br />Revenue ,....
<br />E"nditure
<br />Net,
<br />01
<br />—General Fund
<br />$29,616,550.00
<br />$31,051,550.00
<br />($1,435,000.00)
<br />—
<br />—General Fun Reserve
<br />'1,435,000 00 w
<br />'0.00
<br />...... w _...
<br />„00
<br />1 43$0.00
<br />, ww_ wwwwwwww W
<br />Net
<br />$31,051,550.00
<br />$31,051,550.00
<br />$0.00
<br />03
<br />—Airport Fund
<br />$1,007,041.00
<br />$1,037,041.00
<br />($30,000.00)
<br />03
<br />— Airport Fund Reserve
<br />$30 000.00
<br />'0.00 . .
<br />x`30 000.00
<br />Net
<br />$1,037,041.00
<br />$1,037,041.00
<br />$0.00
<br />10
<br />— Water and Sewer Fund
<br />$20,987,300.00
<br />$20,987,300.00
<br />$0.00
<br />45—Sanitation
<br />Fund
<br />$1,380,000.00
<br />$1,380,000.00
<br />$0.00
<br />The Proposed FY23/24 Budget has all four of the above Operational Funds balanced. To accomplish this, given our
<br />General Fund Reserve is healthy with some available surplus — primarily through better than expected Sales Tax
<br />receipts, I have budgeted to access a portion of this surplus to help cover several needed equipment and/or one-time
<br />significant purchases so that we can maintain our goal of a flat property tax levy this year in the M & O, which also
<br />happens to be limited by SB -2 restrictions. I went back to FY21/22 (the last completed FY) and determined how much
<br />revenue above budget and how much expenditure below budget we had, net the two amounts, and determined this
<br />balance. This, in essence, is the amount that was forwarded to the reserve at the close of the FY21 /22. It is always our
<br />goal to come in over revenue and under expense — this gives us the needed room to operate while allowing us to
<br />maintain a healthy reserve for unique situations and to further our services to the citizens via several important capital
<br />purchases that must occur. This use of the surplus puts the citizens' tax money to work benefiting them, while still
<br />maintaining a healthy reserve. In addition, given restrictions under SB -2 as discussed above, use of surplus funds is
<br />also the only means of purchasing some capital items outside of ARPA and CARES (which are finite).
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