2025-064 Budget Workshop Responses August 15, 2025 Report No. 2025-064
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
FY 25-26 Budget Workshop Follow Up
BACKGROUND:
On August 9, 2025, the FY 25-26 Budget Workshop was held. During the session, City Council
Members requested additional information that required follow-up.
DISCUSSION:
General Fund One-Time Funding Priorities
During the Budget Workshop, each Council Member provided their priority ranking for one-time
funding considerations that were not included in the City Manager's FY 2025-2026 Proposed
Budget. The table below reflects the Council's cumulative ranking.
Staff will monitor the budget as we approach fiscal year-end. If funding becomes available through
operating and completed project savings, items will be funded according to the priority rankings
listed below.
Council Cumulative Ranking
Ranking One-Time Consideration Amount
1 Civic Center Pool Site Analysis and End of Lifecycle 55,000
Plan '
2 Expiring Incentive roll to Catalyst Fund 38,174
3 In-Kind Funding for special events 120,000
4 Campaign Finance Consultant 70,000
Total $283,174
August 15, 2025 Report No. 2025-064
Provide an overview of the Managed Vacancy Program
The Managed Vacancy Program is a strategic initiative designed to achieve a target of$3.0 million
per fiscal year in General Fund salary savings in the current fiscal year and upcoming fiscal year.
Rather than permanently eliminating positions, the program temporarily freezes positions as they
become vacant.This approach provides the City with maximum flexibility to manage its workforce
and service levels.
Oversight of the program is provided by the Vacancy Review Committee, composed of
representatives from Finance, the City Manager's Office, and Human Resources. This committee
meets monthly to review year-to-date salary savings and projections, as well as to evaluate
department requests to fill vacant positions.
The program prioritizes filling front-line and public safety positions to ensure essential services
are not impacted. All other vacant positions are reviewed on a case-by-case basis to determine if
they are critical to city operations. This includes a thorough review of the department director's
justification for each request.
Provide an overview of the proposed 4.5 Day Work Week
The City Manager has proposed a one-year pilot program for a 4.5-day work week, starting
tentatively on October 1, 2025. This initiative is focused on improving employee recruitment and
retention, a benefit seen in neighboring cities like Lewisville and Flower Mound that have already
adopted similar schedules.
This pilot will apply to City Administrative Offices, including but not limited to City Hall, City
Hall East (excluding Police Headquarters), and Development Services. Under the proposed
schedule,these offices will close at noon on Fridays. Forward-facing operations such as Customer
Service and Municipal Court currently have online systems to assist residents and customers
outside of business hours. Specific volume information by location will be provided to the City
Council along with a communication plan in early September.
A dedicated work group has been formed to finalize program details. This group will also establish
a system for collecting and evaluating feedback throughout the pilot year to assess its overall
effectiveness.
Is there an option to use available funding in a special revenue fund to lower the Interest &
Sinking (I&S) portion of the tax rate?
Following the Budget Workshop, further due diligence confirmed the Government Accounting
Standards Board (GASB) requires special revenue funds to be used exclusively for their specific,
intended purpose. Relocating prior-year funding could compromise compliance with GASB
standards.
August 15, 2025 Report No. 2025-064
While it is technically possible to reallocate a portion of the current year's revenue before it is
officially recorded, the timing of setting the I&S rate poses a risk. Given the unpredictable nature
of special revenue streams, this approach is not recommended since a reallocation could result in
the City not levying enough tax revenue to cover the debt service payment in the upcoming fiscal
year.
Provide the effect of tax-exempt properties on the City.
The FY 2025-26 City Manager's Proposed Budget includes a tax rate of $0.59542 per $100
valuation.
FExemption Category Exemption Value Tax Revenue Loss Description
Homestead
Own and occupy as a
(Includes over 65) 876,689,804 5,219,986 primary residence.
Homestead
100%Disabled
(Disabled Veteran) 8,115,308 48,320 Veteran
Charitable
Special 629,532,001 3,748,359 organizations
Religious or
Absolute 3,722,833,041 22,166,492 Government
Other 5,915,234 35,220 Childcare facilities
Total $5,243,085,388 S31,218,379
A$100,000 exemption represents $595.00
Why did the expenses decrease from the current year to the proposed year for the Legends
Municipal Utility District Fund?
The proposed budgeted revenue of$147,000 is tied to the projected number of new rooftops and
the construction timeline. Originally, the revenue forecast only included single-family homes.
Following a review, staff will update the budget to include multi-family units,which are expected
to bring in an additional $57,500 for a total budgeted revenue of$204,500 for FY 25-26.
August 15, 2025 Report No. 2025-064
• Multi-family units: An additional 230 units are forecasted for 2026, adding $57,500 in
revenue.
What is the sales tax generation from the proposed Ambassador boundary?
The data in the attached exhibit (Exhibit 1) presents monthly sales tax revenues from September
2024 through July 2025. These figures do not represent revenues from within the new proposed
boundary,which would only include the square proper.
The revenues reflect the approximate monthly sales tax generated, by category, from the original
Ambassador boundary, which is the boundary used to look at the impact of Denton Halloween.
This area runs from Carrol Blvd to Bell Street (East to West, extending past the DCTA Transit
Center) and from Quakertown Park to Sycamore Street(North to South, extending down to Eagle
Drive between Elm Street and the railroad tracks).
Please note that sales tax revenue is received two months after it is collected and remitted to the
state. The table is presented by category to comply with the confidentiality requirements of the
Texas Tax Code, sections 111.006, 151.027, and 321.2022.
Provide a list of the arrests within the Ambassador Program boundary.
From August 2024 to 2025 the City of Denton Police Department has made 267 arrests in the
existing Ambassador Program boundary (Exhibit 2).
What do delays cost us?
Delays to Street Fund projects can be costly, and who pays depends on the cause of the delay. The
actual cost of delay varies by project.
• If the City is at fault, we are responsible for costs such as material escalations, extended
general conditions, and re-mobilization fees. The City also pays more for project
management and inspection time.
• If the contractor is at fault due to nonconforming work or material issues, they are
responsible for the additional time and costs. If they exceed the project's contractual
deadline, the City can apply liquidated damages, which are deducted from their payment.
How do we determine when sidewalks should be replaced at the same time as a street?
The City determines when to replace sidewalks alongside a street by having the Project Manager
and a design engineer conduct a joint site walk during the project's design phase. They thoroughly
evaluate the condition of all sidewalks and ramps within the project area.
August 15, 2025 Report No. 2025-064
All ramps connected to a reconstructed roadway are required to be upgraded to ADA compliance.
The City evaluates the adjacent sidewalks for deficiencies, and any found to be in poor condition
are considered for replacement as part of the overall project, depending on the project budget.
Can the proposed Hotel Occupancy Tax Fund distribution be redistributed by Council?
Yes, the City Council can redistribute the proposed Hotel Occupancy Tax Fund distribution. The
distribution is a recommendation from the Community Partnership Committee, an advisory body
to the City Council. The Council has the authority to make changes with consensus, but any
redistribution must be given to organizations that submitted an eligible application for sponsorship
for Fiscal Year 2025-2026 (Exhibit 3).
ATTACHMENTS:
1. Exhibit 1 — Sales Tax Generation
2. Exhibit 2—Arrest Records
3. Exhibit 3 —Proposed Hotel Occupancy Tax Distribution
STAFF CONTACT:
Christine Taylor, Assistant City Manager
REOUESTOR:
City Council, Budget Workshop Follow Up
STAFF TIME TO COMPLETE REPORT:
5 hours
PARTICIPATING DEPARTMENTS:
Finance
City Manager's Office
Human Resources
Capital Projects
Transportation
Fire
Exhibit 1
Sales Tax Revenue
September 2024-July 2025; Original Ambassador Boundary
Category Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May- Jun-25 Jul-25 Total
25
Hotel & Food $41,076 $35,873 $37,246 $46,794 $33,041 $32,665 $30,522 $28,601 $34,518 $35,521 $35,130 $391,014
Services
Retail Trade 28,550 26,224 26,273 27,263 24,818 28,912 22,502 22,786 26,236 23,727 26,553 $283,845
Professional & 6,472 6,014 5,533 6,553 4,371 7,105 5,746 4,537 5,401 5,751 5,050 $62 533
Other Services '
Construction 5,932 4,632 5,271 5,782 6,256 3,492 1,798 1 2,981 1,322 14,563 1 9,028 $61,056
Wholesale & 2,248 2,506 2,496 3,438 2,570 4,349 1,147 2,533 3,500 2,819 2,885 $30 491
Related '
Manufacturing 1,863 918 460 1,199 442 549 424 304 1,224 830 1,462 $9,675
Telecom & 205 244 226 313 291 431 295 277 340 338 271 $3,230
Rentals
I
Finance Rentals 163 99 131 88 81 91 87 219 93 87 96 $1,236
Total 586,509 576,510 $77,635 $91,429 571,869 577,594 $62,522 $62,239 572,634 583,636 $80,474 $843,080
Exhibit 2
Ambassador Program Existing Boundary Map
Arrest within the boundary from August 2024 to 2025
Charge Totals
o Warrant Service 175
Driving While Intoxicated 60
Alcohol Public Intoxication 56
Criminal Trespass 42
E Assault Causes Bodily Injury Family Member 18
�y Drug Paraphernalia-Possess Drug Para 14
Assault Causes Bodily Injury 10
C
Public Intoxication Non Alcohol 8
s Poss CS PG 2<1G 8
° Resist Arrest Search or Transport 8
Theft Prop 41004750 8
Unl Carrying Weapon 7
Driving While Intoxicated Open Alch Container 7
Obstruction or Retaliation 7
Driving While Intoxicated 3rd or More IAT 7
Indecent Assault Health/Mental Provider IAT 7
D e n t 01) Driving W/Lic Inv W/PrevConv/Susp/W/O Fin Res 6
Theft Prop<$2,500 2/More Prev Conv 6
Violate Bond/Protective Order 2+Times W/In 121 6
Drug Paraphernalia-Marijuana 5
Driving While Intoxicated 2nd 5
Poss CS PG 1/1-B<1G 5
Public Intoxication W/3 Prior Convictions 5
Evading Arrest Detention 5
Assault Fam/House Mem Impede Breath/Circula 5
Asault by Contact 4
Fail to Identify Fugitive Intent Give False Info 4
Injury to Child/Elderly/Disable W/Int Bodily Inj 4
Reckless Driving-Class B 3
Poss Marij<20Z 3
Evading Arrest Detention w/Veh 3
Littering 3
Poss CS PG 1/1-B>1G<4G 3
Interference w/Public Duties 3
Disorderly Conduct Expose Genitals 3
Indecent Assault 3
Agg Assault W/Deadly Weapon 3
Unlawful Restraint 3
Man Del CS PG 2 or2-A>=4G<400G 3
Sexual Assault 3
AggSexualAssaultChild 3
S+ Theft Prop>=$2,500<$30K 3
Credit Card or Debit Card Abuse 3
DL No Driver's License 2
Criminal Mischief>41004750 2
Unauth Use of Vehicle 2
Discharge Firearm in Certain Municipalities 2
j �y Fail to Maintain Financial Responsibility 2
Legend �Mi�es Proh Substance/item in Corr/Civ Com Facility 2
Assault Peace Officer/Judge 2
a Pfoposed Boundary Harassment of Public Servant 2
W,MSk NA Lts,,s,RK to Cme gc ost Disregard No Turn on Red Light 2
272.03 Acres kk~TOW.%^F&U&W ak.bn•HIM.6 '"
f�o,re( bx,wpa*Lrm.[okW5,u(V~"Mrer, Railroad Enter or Remain on Railroad Property 2
Interfere W/Emergency Req for Assistance 2
Exhibit 3
Expenditures Request Recommendation Recommendation Recommendation(In- Total
(HOT) (HOT) (Cash) kind) Sponsorships
Black Chamber of Commerce $ 80,000 $ 48,000 $4,000 $ 14,140 $66,140
Black Film Festival Institute 62,500 62,500 12,000 - 74,500
Boil Buddies Bash - - 3,000 260 3,260
CVB-Discover Denton 1,964,250 1,964,250 - - 1,964,250
Cinco de Mayo 62,000 24,800 5,000 10,650 40,450
Denton Day of the Dead Festival 100,000 80,000 8,000 16,120 104,120
Denton Halloween 2026 250,000 250,000 - - 250,000
Denton Festival Foundation 140,000 84,000 20,000 70,800 174,800
Denton Holiday Festival Association 100,000 20,000 6,000 10,160 36,160
Denton Main Street Association 152,100 121,680 10,000 80 131,760
Denton Parks Foundation -Juneteenth 77,000 30,800 4,000 19,090 53,890
Greater Denton Arts Council - Public Art 100,000 70,728 - - 70,728
Greater Denton Arts Council -Operations 160,400 160,400 3,768 - 164,168
Kiwanis Youth Servies - - 26,800 16,020 42,820
North Texas State Fair Association 417,200 417,200 10,000 4,780 431,980
Tejas Storytelling Association 59,055 59,055 - 5,750 64,805
Denton Community Theatre 58,500 35,100 - - 35,100
UNT Basketball-Nightmare on Elm St - - 5,670 5,670
Expenditures Request Recommendation Recommendation Recommendation(In- Total
(HOT) (HOT) (Cash) kind) Sponsorships
Black Chamber of Commerce $ 80,000 $ 48,000 $4,000 $ 14,140 $66,140
Black Film Festival Institute 62,500 62,500 12,000 - 74,500
Boil Buddies Bash - - 3,000 260 3,260
CVB-Discover Denton 1,964,250 1,964,250 - - 1,964,250
Cinco de Mayo 62,000 24,800 5,000 10,650 40,450
Denton Day of the Dead Festival 100,000 80,000 8,000 16,120 104,120
Denton Halloween 2026 250,000 250,000 - - 250,000
Denton Festival Foundation 140,000 84,000 20,000 70,800 174,800
Denton Holiday Festival Association 100,000 20,000 6,000 10,160 36,160
Denton Main Street Association 152,100 121,680 10,000 80 131,760
Denton Parks Foundation -Juneteenth 77,000 30,800 4,000 19,090 53,890
Greater Denton Arts Council - Public Art 100,000 70,728 - - 70,728
Greater Denton Arts Council -Operations 160,400 160,400 3,768 - 164,168
Kiwanis Youth Servies - - 26,800 16,020 42,820
North Texas State Fair Association 417,200 417,200 10,000 4,780 431,980
Tejas Storytelling Association 59,055 59,055 - 5,750 64,805
Denton Community Theatre 58,500 35,100 - - 35,100
UNT Basketball-Nightmare on Elm St - - 5,670 5,670