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Below is a comparison of tax rates for FY22/23 through the proposed FY25/26:
<br />Year
<br />M&O
<br />Debt, _
<br />Total
<br />FY22/23
<br />$0.34377
<br />$0.09901
<br />$0.44278
<br />FY23/24
<br />$0.32176
<br />$0.15606
<br />$0.47782
<br />FY24/25
<br />$0.31292
<br />$0.14828
<br />$0.46120
<br />FY25/26
<br />$0.30773
<br />$0.16466
<br />$0.47239
<br />The proposed FY25/26 tax rate for the City of Paris complies with Senate Bill 2 (S132), also known as the Texas
<br />Property Tax Reform and Transparency Act of 2019, which limits how much cities can raise property taxes. While
<br />the law helps control tax increases, it also restricts a city's ability to grow revenues to support essential services.
<br />Therefore, it's recommended that the City responsibly use the allowed growth under S132 when necessary, to avoid
<br />falling behind on critical services, a gap that may be hard to recover from later. Additionally, the FY25/26 budget
<br />uses 97% of the estimated property tax revenue to balance the budget a realistic figure based on the City's historical
<br />collection rate, rather than the full 100%, which would likely result in a shortfall. This conservative approach has
<br />been used for several years.
<br />The City of Paris operates primarily from three key funds: the General Fund (01), Airport Fund (03), and Water &
<br />Sewer Fund (10). These are distinct from Special Purpose Funds, which will be discussed later. As of FY24/25, the
<br />Sanitation & Landfill Fund (45) is no longer an operating fund due to the outsourcing of solid waste services.
<br />Remaining related expenses have been moved to Department 44 of the General Fund. These operational funds are
<br />mainly supported by taxes, fines, fees, and utility rates, making it essential to keep them balanced. Each year, staff
<br />reviews historical data to refine the budget, improve efficiency, and maintain services while minimizing the property
<br />tax rate.
<br />The following table outlines the balanced budgets for each operating fund:
<br />Fund ��
<br />Revenue ..
<br />�..., Exgtenditure
<br />Net
<br />01
<br />— General Fund
<br />$35,467,110.00
<br />$37,569,125.00
<br />-$2,102,015.00
<br />01
<br />— General Fund Reserve
<br />$2J02A15.00
<br />Net
<br />$37,251,174.00
<br />$37,251,174.00
<br />$0.00
<br />03—Airport
<br />Fund
<br />$1,146,100
<br />$1,146,100.00
<br />-$93,700.00
<br />O1
<br />—General Fund Transfer
<br />93 700.00...............
<br />$0.00 ............w.n.... ..
<br />$.93,700.00
<br />Net
<br />$1,143,700.00
<br />$1,143,700.00
<br />$0.00
<br />10
<br />— Water and Sewer Fund
<br />$22,365,768.00
<br />$22,014,746.00
<br />$351,022.00
<br />The Proposed FY25/26 Budget presents a balanced plan for all three operational funds. To achieve this, a portion of
<br />the General Fund surplus available due to a healthy reserve has been allocated for essential one-time capital purchases.
<br />The budget includes the use of reserve funds to cover all General Fund capital purchases and an increase of $50.00
<br />per month City contribution for health insurance costs. It is important to emphasize that using surplus funds to support
<br />operational (recurring) expenses must be approached with great caution. The City of Paris is a continuing entity with
<br />ongoing, routine costs such as payroll, insurance, chemicals, and fuel that occur year after year. These types of
<br />expenses must be supported by stable, recurring revenue sources that are consistently available on an annual basis.
<br />Using finite surplus funds for recurring expenses is fiscally unsound. Because surplus funds are temporary and
<br />nonrenewable, relying on them for ongoing services creates a funding gap when those funds run out, jeopardizing the
<br />City's ability to maintain essential services.
<br />The Airport Fund (Fund 03) has no reserve, so the General Fund will transfer $93,700.00 to subsidize it in FY25/26.
<br />The Water and Sewer Fund (Fund 10) also lacks excess reserves for capital purchases; all expenses are supported by
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