|
97% figure when balancing the budget rather than a 100% figure knowing it will produce a large revenue deficit by
<br />the end of the fiscal year. The $8,030,000.00 in the Proposed FY24/25Budget represents this 97% value.This has
<br />been the practice for several years.
<br />As inFY23/24, FY24/25 valuations from Lamar County Appraisal Districtcontained properties whose values were
<br />th
<br />still under protest.This year, as of July 25, there are still 249properties undergoing protest with LCAD.These
<br />protestsimpact our growth calculationsfor FY24/25. The figures we have used for taxable value are the most
<br />conservative available to us by LCAD.
<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–AirportFund,and 10–Water and Sewer
<br />Fund. In FY24/25, Fund45 –Sanitation and LandfillFund, will no longer be an operating fund as the City has
<br />outsourced its solid waste service and moved the remaining expenses to Department 44 of Fund 01.These threefunds
<br />make up the vast majority of the financial accountingand are what the City operates out of to perform its daily tasks.
<br />In addition, these threefunds are unique from other special purpose funds in that they are supported primarily from
<br />taxes, fines, fees, and utility rates, thus the importance to balance them.Each year, city staff carefully examinesthe
<br />historical trends behind each line item to focus the budget while capturing and repurposing available funds for
<br />efficiency and to become even more effective in the duties we are tasked with performingto maintain services, all
<br />while keeping the property tax rate as lowas possible.The following table shows the balancing of each of our operating
<br />funds:
<br />FundRevenueExpenditureNet
<br />01–General Fund$32,806,500.00$34,182,500.00($1,376,000.00)
<br />01–General Fund Reserve$1,376,000.00$0.00$1,376,000.00
<br />Net$34,182,500.00$34,182,500.00$0.00
<br />03–Airport Fund$984,681.00$1,060,407.00($75,726.00)
<br />01–General Fund Transfer$75,726.00$0.00$75,726.00
<br />Net$1,060,407.00$1,060,407.00$0.00
<br />10–Water and Sewer Fund$22,037,204.00$22,037,204.00$0.00
<br />The Proposed FY24/25Budget has all threeof the above Operational Funds balanced.To accomplish this, given our
<br />General Fund Reserve is healthy with some available surplus–primarily through better-than-expectedSales Tax and
<br />Interest payment receipts,wehave budgeted to access a portion of this surplusto help cover several needed equipment
<br />and/or one-time significant purchases so that we can meetour goal of a flat property tax levy this yearin the M & O.
<br />Wewent back to FY22/23(the last completed FY) and determined how much revenue above budget and how much
<br />expenditure below budget we had, net the two amounts, and determined this balance.This, in essence, is the amount
<br />that was forwarded to the reserve at the close of the FY22/23.It is always our goal to come in over revenue and under
<br />expense –this gives us the needed room to operate while allowingus to maintain a healthy reserve for unique situations
<br />andto further our services to the citizens via several important capital purchases that must occur. This use of the
<br />surplus puts the citizens’ tax money to work benefiting them, while still maintaining a healthy reserve.In addition,
<br />given restrictions under SB-2 as discussed above, use of surplus funds is also the only means of purchasing some
<br />capital items outside of ARPA and CARES (which are nearly gone).
<br />The use of surplus funding to help balance an operational budget must be done with great care. The City is not a finite
<br />entity; instead,it will continue to exist and therefore will have routine expenses year after year (ex: payroll, insurance,
<br />chemicals, fuel, etc.). These repeating expenses must be supported year after year with dedicated annual revenue
<br />streams, in other words, revenue that is reliably raised and available each year.To use surplus money in this instance
<br />would be inappropriate because it is a finite source of money and would eventually end. Should a repeating expenditure
<br />be supported by a finite revenue stream, a time would come when the neededrevenue would not be available to
<br />Page 3of 18
<br />
<br />
|