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000476 JA August 17, 2007 Honorable Mayor Members of City Council City of Paris, Texas Enclosed are the 2006 -2007 fiscal year's General Fund, Water and Sewer Fund, Debt Service Fund, Special Revenue Funds, and other minor fund budgets that compr,se the City of Paris' Comprehensive Budget. The effective date of the budget begins on October 1, 2007 and ends on September 30, 2008. The overall economy of the region and City has been stable during the past year, as the property values have increased'.as well as the sales tax. Both taxes play a key role in the City's finances. The City has made significant improvement in the General Fund balance over the past two years, as a result of major reductions in certain operational areas. However, the Water and Sewer Fund continues to struggle to operate within the available resources, especially as a result of this year's cool and wet early- midsummer, which has had an impact on the available revenue for operational purposes. It is recommended that the City adopt the current tax rate that it currently has. The City must consider the effective tax rate that has been calculated under the law, which is approximately three (3) cents than the current tax rate. Maintaining the current tax rate will require the City to have at least two (2) public hearings under state statutes. The General Fund revenue estimates are covered on pages 1 through 4, and the expenditures are covered on pages 4 through 63. The estimated revenue increase for FY 2007 -08 is $874,080 (4.3 %) above the FY 2006 -07 approved budget. The estimated FY 2007 -08 expenditures increased by $1,055,552 (5.2 %) over the FY 2006 -07 approved budget. The General Fund is estimated to have a fund balance as of September 30, 2007 as follows: Estimated Fund Balance (9/31/07) $7,523,507 25% of the FY 07 -08 budgeted expenditures* for a reserve of - 5,314,430 Estimated funds available for other needs 2,209,077 Establishment of Equipment Replacement Fund ** - 1,250,000 Other Capital Projects: Street Rehabilitation - 250,000 Demolition of old structures - 100,000 Directional Signs - 20,000 Street sign upgrades - 25,000 Estimated funds available for other needs $564,077 P.O. BOX 9037 • PARIS TX 75461.9037 • 214 - 785 -7511