HomeMy WebLinkAbout1986-1990
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CITY OF DENTON
LONG RANGE FINANCIAL FORECAST
1986-1990
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CITY MANAGER
G. CHRIS HARTUNG
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PREPARED 13Y THE DEPARTMENT OF FIN kNCE
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WrYofDEWON,TEXAS MUNICIPAL BUILDING / DENTON, TEXAS 76201 / TELEPHONE(817)566.8200
July 26, 1985
:he Honorable Mayor and
Members of the City Council
City of Lanton
P4 I respectfully submit this 1986-1990 Long Range Financial Forecast for your
conside•.ation. I believc the -oinrast will prove to be a valuable policy and
management tool in matte°s beating on financial planning.
Some particular benefits that can be expected from the forecast ares
o Ti,e attainment of a clear picture of the City's financial strengths
"4 and weaknesses for deliberations.
o Policy decisions may a made with recognition of long-term financial
7 impact,
o Significant trends in the financial condition of the City will become
w, apparent in time to take appropriate actions.
o Bond rating agencies will have the opportunity to note the extensive,
systematic financial planning performed by the City of Denton.
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I hope you find the forecast useful as you consider the financial issues
before you this fiscal year. {
Rea ect~fully subm fted,
0. Chris Hartung
City Manager
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LONG RANGE FINANCIAL FORECAST
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TABLE OF CONTENTS
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . page 1
- A. Table of Variable Values . . . . . , 3
II. FINANCIAL OUTLOOK . . . . . . . . . . . . . . . . . . . . . . . . 5
A. Forecast Detail . . . . . . . . . . . . . . . . . 8
8. Plots and Charts , , , , , , , , , , , , , , '
. 12
III. FINANCIAL STRATEGIES . . . . . . . . . . . . . . . . . . . . . 37
IV. REVENUE FORECAST . . . . . . . . . . . . . . . . . . . . . . . . . 39
A. Ad Valorem Tax , , , , , , , , , , , , , , , , , , , , 39
8. Other Tar, . . . . . . . . . . . . . . 42
C. Facility Fees. . . . . . . . . . . 48 !
D. Fines and Fees . . . . . . . . . . . . . . . . . 49
E. Licenses and Permits , , , , , , , , , , , , , , , , , , , , 50
' F. Miscellaneous Revenues , , , , , , , , , , , , , , , , , ,
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G. Intergovernmental Revenues , , . , , , , . . . 552
H. Other Fund Transfers , , , , , , , , , , , , 53
I. Interest Earred. , , , , , , , , , 60
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V. EXPENDITURE FORECAST . . . . . . . . . . . . . . . . . . . . . 61
A. Departmental Expenditures. , , , 61
B. Expenditures to other Agencies . , , , , , , , , 71
I, C. Miscellaneous Expenditures 76
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CITY OF DENTON
LONG RANGE FINANCIAL FORECAST -
INTRODUCTION
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CITY OF DENTON - J
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LONG RANGE FINANCIAL FORECAST
INTRODUCTION
This document is the product of both extensive research and the application of
techniques that have been proven in practice by other cities. The forecast is
submitted as a tool to be used to identify general financial trends, given a
field of reasonable assumptions, It is by no means a prediction of the
precise dollar-level of any financial category in any particular year.
The most importaat purpose of the forecast is to serve as r . "early warning
system" that allows citizens, policy makers, and managers sufficient time to
study potential financial problems and to then make informed choices,
I Assumptions
` The
financial projections in this forecast are based upon a network of
assumptions, a change in any one of which could render the projections
invalid. Particular assumptions are noted in the latter sections of this
document. General assumptions aral
1, City services will be maintained at current levels and only those new
Mi programs to which the City is presently committee will be adopted in
the future,
2. There will be no severe change in the local economy.
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3. There will be no major annexations.
4. Any change in assessed valuation of
change in the effective tax rate, property will not be offset by a
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5. Claims against unfunded liabilities will not exr.eed historical trends.
6. No new debt service obligations will be incurred and existing debt
will be retired on schedule.
These and other assumptions throughout the forecast are made solely for the
purpose of establishing a framework for projectiuns. They are not policy
_ recommendations. Most certainly, they are not attempts to infringe upon what
is in many cases the prerogative of the City Council.
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CITY OF DENTON i
LONG RANGE FINANCIAL FORECAST
INTRODUCTION
Page Two
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Methodology
Both revenue and expenditure projections have been developed in a systematic
manner,
Revenues for the past ten years were restated to fit the revenue categories _
used in the current accounting system. These sources were aggregated into -
revenue categories used in this document, then stored in a computerized data
base, and finally were subjected to various forms of analysis. Several
significant revenues were modeled using computer-supported statistical
techniques. Other revenues were projected by deterministic approaches and
expert judgement, The statistical approach, for example, was used for sales
tax revenues while the deterministic approach was used to project transfers
from other funds. Expert opinion was relied upon to project some volatile
revenues such as that from interest income.
Where the statistical approach was applied, many like items were forecasted in
total rather than individually because the practice, beyond being expedient,
generally improves accuracy because aggregate errors tend to cancel one
another. The variables used in this technique are listed, along with their
sources and projected values, at the table at the end of this section.
The expenditure projections employ only one of these variables, the Regional
Consumer Price Index, in their forecast method. Here the rate of projected
change in the CPI was converted to an inflation multiplier and applied to the
pertinent year's expenditures to obtain the base of the next year's
expenditures. An additional calculation accounted for incremental additions
of new costs and completed the projecton procedure. Here, it is essential
that a qualification be made clear if the forecast is to be understood.
Expenditures relfect only committed costa. Committed costa are defined as
those costs which are unavoidable if present planning and policy maadates are
continued. Mandates are viewed as deriving from Federal and State r~
legislation, Council action, or adopted City plans or policies.
In this respect, the expenditure estimates cannot be regarded as an attempt to ti
forecast total costs in the future, but rather, they must be considered
approximations of minimum future costs. 0
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2 CITY OF DENTON
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_ LONG RANGE FINANCIAL FORECAST
INTRODUCTION
Page Three
TABLE OF
VARIABLE VALUES
1985-66 1986-87 1987-88 1988-89 1989-90
Denton Pop. 58,731 59,512 60,243 60,974 61,709
Personal
Income D/FW 58 66 68 74 81
CPI D/FW 356 374 393 411 432
Inflation
Multiplier 1.045 1.051 1.052 1.046 1.051
Construction
Value 9505851207 78,379,254 76,1730301 83,9670348 94,5000,000
Sources and Comments
Population estimates were obtained from the North Texas Council of
Governments. Linear interpolation was employed to determine yearly values.
Personal income history for the Dallas/Fort Worth Standard 14etropolitaa
Statistical Area was obtained from the Commerce Department, Bureau of Economic
Anslyris. Projections of the rate of change were obtained from the State
Comptroller's Office of Revenue Estimating.
Consumer Price index history for the Dallas/Fort Worth SMSA was obtained from
the Department of Labor, Bureau of Labor Statistics. Projections were
obtained from the State Comptroller's Office of Revenue Estimating.
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Inflation multipliers were derived from rates of change in the CPI projections.
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CITY OF OENTON - 3
LONG RANGE FINANCIAL FORECAST -
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FINANCIAL OUTLOOK
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LONG RANGE FINANCIAL FORECAST
FINANCIAL OUTLOOK
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The 1986-90 Long-Range Financial Forecast projects the following operating
balancesi
1985-86 1986-1987 1987-1988 1988-1989 1989-1990
Revenues: :20,016,265 $2119060274 $23,687,416 $25,115,371 $26,380,539
Expenditures: 209016,265 21,892,418 234654,756 25,1040023 260358,203
Balance: $ -0- $ 13,856 $ 32,660 $ 11,348 $ 229336
The forecast reveals positive balanced for every year; therefore, the overall
forecast then indicates that revenues will keep pace with minimal
expenditures. However, major increases in the number of programs, level of
program services, or the amount of debt services will bring deficits unless
corresponding adjustments are made in either revenues or expenditures.
Revenues
Several characteristics of revenue component of the forecast are noteworthy.
First, Ad Valorem Revenue in Fiscal Year 1985-86 increases 27 percent above
that of the previous year. Such growth is attributable to the phenomenal
explosion in new building construction, the Appraisal District's estimate
! better reflecting actual appreciation in assessed valuation in Fiscal Year
1985-86 and the decreasing debt service obligation borne by the City.
Following 1985-86 Fiscal Year, we anticipate a sharp reduction in the growth
of Ad Valorem Revenue. The lowest percertage increase being 4.4, and the
highest increase among the years following the 1985-86 Fiscal Year projections
is 10.39. The reduction in the rate of increase is the result of expected
increases in dolt service.
In category of 0th±r Taxes, Sales Revenue is projected to have declining
growth. It peaks at 10.7 percent growth in Fiscal Year 1985-86 and then
gradually falling off to a 4.1 percent increase in the final year of the
projection.
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F,cility fee-related revenues are estimated to have a rather consistent growth
rate, Over the five (5) year projection, the percentage growth increases
remain between 11.1 and 16.6. The potential for increased revenue exist in
this category when one considers the additional funds which may be made
available as the Municipal Airport develops and as we improve the application
of fire inspections.
The Fines and Fees category demonstrated a significant increase of 20.4
percent in the first year of the forecast; however only marginal increases are
projected for the last four (4) years of the forecast. The reason for the
initial increase is t e expected improvements in the procedure we use to
collect Municipal Court fees.
CITY OF DENTON 5
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LONG RANGE FINANCIAL FORECAST
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Miscellaneous Revenue is expected to increase moderately, throughout the
forecast, with an average growth rate of about 8.7 percent per year.
Intergovernmental Revenue is projected to average a 12.8 percent annual growth
rate because the category demonstrated a significant increase in the 1985-86
Fiscal Year, however, absolute reductions in some categories and uncertainty .r
about funding levels in other categories produce a sharp decline in the growth
rate in following years.
The largest revenue category, Other Fund Transfers, demonstrates only marginal
annual growth rates. Although there are several reasons for the decreasing
growth rate in this category, the primary reason is the sharp reduction in
Revenue Sharing, decreasing growth in the cost of administrative services and
conservative estimates of future transfers from the Bond Fund.
Plots of historical and projected revenue trends are found at the end of this Fr
section. Immediately following the revenue plots are bar charts that
illustrate each major revenue category's proportion to total revenues over the
forecast period.
Expenditures
Growth among expenditure categories is not nearly so disparate as growth among
revenue categories because, in many cases, expenditure projections are driven
by inflation alone. This method provides generally uniform growth, but
significant exceptions occur in General Government, Finance, Police, and Fire
categories.
General Government increases beyond the rate of inflation are generally
attributable to th reorganization of other division coats (e.g. Building
Operations, Energy Management, Word Processing Center and Data Processing
Center) into the General Government category. The two exceptions here are an
increase in the service level of the economic development program and '
completion of Data Processing long range operational service plan.
The Finance Department anticipates a reorganization and an expansion of the
service base because of a change in the population, number of households and
etc, However, the above mentioned changes will only produce a marginal
increase in the growth rate of the department's expense above the general rate
of inflation.
Police expenditure growth rate fluctuates between 6.7 and 10.3 percent
throughout the forecast. Fire expenditures jump some 14 percent in Fiscal
Year 1986-87 and maintain that level until 1987-88. The last two years of the
forecast exhibit a drastic reduction in growth rate, The large increase in
the Fire Department's expenditures in 1986-87 and 1987-88 fiscal years is the
result of operational requtrements of a new fire sub-station. Otherwise,
growth in both department's expenditures is mostly driven by increase service
demands.
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LONG RANGE FINANCIAL FORECAST
The Parks and Recreation Department's expenditures exceed general
tuflation-rate growth because new facilities are sct.eduled for completion
(causing increased operating costs).
Plots and charts pertaining to expenditures are also found at the end of this
section immediately following those of revenues.
Forecast
_ A detailed reporting of forecasted revenue and expenditures begins on the next
page. Those categories which were forecasted in aggregate have a aeries of
four periods in place of itemized projections. Plots and charts close the
section.
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LONG RANGE FINANCIAL FORECAST =
REVENUE FORECAST
Revenue
Category 1985-86 1986-87 1987-58 1988-89 1989-90-
AD VALOREM TAXES
Current $5,477,655 $5,7689316 $6,38'1,932 560652,549 $79062,165--
Delinquent 175,000 191,815 2031561 215,308 227,053
Penalty and Interest 54,776 46,856 44,689 57,523 622356
TOTAL $50707,431 $6,006,787 $6,6319181 46,925,380 $7,3519574
OTHER TAXES
Sales $5,103,587 $5,686,181 $602980333 69781,484 $7,0720637,
Franchise-Lone Star Gas 230,000 326,182 3470823 369,463 3910104
Franchise- General Tele. 1359000 133,843 135,551 137,260 1379968,--
Franchise-Cable T.Y. 76,300 799637 84,287 880938 93,588
Franchise-Hank 45,500 46;429 47,358 48,287 49,216•
Mixed Beverage 72,800 750154 79,577 84,000 88,423
Hotel Occupancy Tax 278,900 328,687 366,234 403,782 441,329,
Bingo _11,000 14,848 17 0897 20,946 23,995
TOTAL $50953,087 $60690,961 $703779060 $7,9340160 $8,298,2600^
FACILITY FEES i j,
Swimming Pool Receipts $35,000 ' " "
Cemetery Fees 90000 " " " "
Community Building Rent 30,000 • " '
Airport 55,922
Recreation Program 310000
Athletic Program Fees 110000
Ambulance Feea 151,000 " " " " ~I'
Williams Square Fees 150600 • " " "
Fire inspection 529000 " "
TOTAL $390,512 $4559486 $520,656 $585,829 $6519000
PINES AND FEES
Municipal Court $792,000 ' • " ' " "
Animal Control 44,000 • " ' " "
Auto Pound 48,000 " " " "
Court Cost 0 .
Police Escort 91000
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TOTAL $ 8930000 $ 190120437 $19063,587 $1,144,737 $10166,887
CITY OF DLNTON
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REVENUE FORECAST
Revenue
Category 1985-86 1986-87 1987-88 198A-89 1989-90
LICENSES AND PERMITS
Zoning $ 122,000
Tax Certificates 12,000
Hine and Beer 5,000
Vital Statistics 140500
Building Permits 2500000
Miscellaneous Permits 18,000
Excavation Permits 17,000
Loading Zones 10000
Electric/Plumbing 160000
TOTAL $4559500 $ 527,549 S 566,678 f 5940448 s 6210899
MISCELLANEOUS REVENUES
Parking $ 11,000
Electric Inspections 47,600
Plumbing Inspections 750000
4 Street Cuts 350,000
Rents 10500
I Miscellaneous 1500000
Sale of Lend 0
Sale of Fixed Assets 109000
TOTAL $ 6450100 S 722,909 S 7690204 S 846,655 S 925,648
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1NTERCOVERNMENTAL REVENUE
County Contribution
Civil Defense $ 200815 S 160722 S 17,711 S 18,699 S 19,688
County Contr-Library 88,297 52,329 52,287 52,241 52,206 I
County Contr-Ambulance 183,508 203,304 220,489 237,674 254,861 II
Fed, Contr-Civil Defense 419630 38,537 40,749 42,960 45,172
Small Cities Contr-Ambu. 38,383 42,469 45,998 49,527 53,056
Grants 0 0 0 0 0
TOTAL $ 372,633 S 353,361 3 377,234 S 4010107 S 4240983
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CITY OF DENTON 9
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REVENUE FORECAST
Revenue
Category 1985-86 1986-87 1987-88 1988-89 1989-90 -
TRANSFERS FROM IYEHER FUtZS
Electric System Fund
Administrative Services 4 1,3140426 1,4550717 1 1,575,002 $ 1,698,287 $ 19813,572
Return on Net Investment 10689,280 1,797,053 108639635 10930,217 1,996,799
Water and Sewer System Fund
Administrative Services 793,298 857,585 902,009 946,432 990,856
Return on Net Investment 7190427 859,985 933,879 1,011,777 18081,667
Sanitation Operations Fund `
Administrative Services 245,000 2459000 246,939 2810884 298,828
Bond Fund 2701000 275,000 280,000 287,000 300,000
Revenue Sharing Fund 264,561 2720198 1901143 108,088 26,034--
TOTAL $ 5,2959992 $507621538 $5,991,607 $6,263,685 16,5070156
INTEREST EARNED
Interest Earned $ 303,000 $ 374,046 $ 3900208 $ 419,370 $ 432,532
TOTAL $ 303,000 $ 374,046 $ 390,208 $ 419,370 $ 432,532
GRAND TOTAL $2090160265 121,906,274 $23,687,416 $25,115,371 $26,380,539
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LONG RANGE FINANCIAL FORECAST
EXPENDITURE FORECAST
DEPARTMENT 1985-86 1986-87 1987-88 1988-89 1989-90
General Government $ 2,115,161 $ 29485,419 $ 2,612,175 $ 3,001,551 $ 33139,622
Legal 385,978 4149955 434,223 456,801 482,730
Personnel 314,167 3289409 345,158 363,106 379,809
Planning 335,154 350,236 368,098 387,239 4050052
Finance 194679597 1,551,571 1,669,537 1,777,381 1,859,769
Public Works 40097,729 4,282,127 4,500,515 4,734,542 500279745
Police 31494,669 3,856,248 4,114,711 404500160 41832,718
Fire 3,3549848 3,963,685 4,704,050 4,762,409 41748,954
Parks and Recreation 1,622,748 1,695,772 1,782,256 1,874,933 2,024,025
Library 6909995 7320958 781,761 834,429 885,381
TOTAL $171879,146 $19,661,380 $21,3120484 $22,642,552 $23,785,805
OTHER AGENCIES
Health $ 100,000 $ 104,500 $ 109,830 $ 1150541 $ 120,856
Community Agencies 131,807 137,738 144,763 152,291 1599296
Visitor Bureau 138,055 144,167 1510625 159,510 166,847
Cultural Confederation 138,055 1449267 151,625 1599510 166,847
Appraisal District 155900) 1610975 170,236 1790088 187,326
TOTAL $ 6'20917 $ 692,747 $ 728,079 $ 765,940 $ 801,172
MISCELLANEOUS EXPENSES
Financial Audit $ 40,000 $ 41,800 $ 439932 $ 460216 $ 489342
Bad Debt 150,000 156,750 164,744 173,311 181,283
Unemployment Benefit 40,000 41,800 43,932 46,216 48,342
Fire Insurance 90,000 94,050 98,847 1030987 108,770
Liability Insurance 220,000 219,900 241,625 254,189 165,882 G
Disability Insurance 70,000 73,150 76,881 80,878 84,599
Transfers Out 178,202 1860221 1950118 205,896 2150367
Contingency 50,000 50,000 50,000 50,000 500000
Salary Adjustment 625,000 653,125 686,434 722,129 7550347
Cost Allocation 89000 81360 8,786 90243 9,668
Revenue Study 0 0 0 0 0
Domino Hall 30000 31135 31294 30466 31626
TOTAL $1,474,202 $1,538,291 $1,614,193 $11695,531 $1,7710226
GRAND TOTAL $20 016 6 265 $21,892,418 $23,654,756 $15,104,023 $26,358,203
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R To be funded irom prior year retainage.
CITY OF DENTON 11
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LONG RANGE FINANCIAL FORECAST
Total Revenues and Expenditures
I L
27,000,000 (1986-1990 Estimated) .
y ~~yW~ r
261000000
t 25,COQCDO
24,0001000
23,000,000
41 22,O0Q000
20=0,000
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'W1D~J/r00+~
T-1_
17
64~00-
Revenues 44
13'000000 r r . Expenditures
=01000
t1~i0Dp00 ~
t
10,000,000
9.000,000
' +4 I
7,0001000 , I
6.000.000
s
5400,000
i
4.0001000 ----F---~---~
1976 1977 1978 1979 IM 1981 1982 1383 1984 1985 1986 1987 1988 1489 1990 ,
Year
12 CITY OF DENTON
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r ~ r Forecast
Total Revenues Actual
27,0006000
M0006000 r
25,OOaODO
ad.oOaooo ~
i 23,0006000
22,0006000 ~r
21,000,000
2c+;ooorooo ~
wpoaooo ~
IUM 000
17n00X0
16,0006000
14000=
13xc= E
II /20001000
rAOO~oOO
10,000,000
8,0006000
7XV00
6A00AOO
k 5,0004000
1976 1977 1978 1979 1990 198i 1982 1983 1984 1985 1986 1987 1988 1989 1990
Year 33
CITY OF OENTON
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LONG RANGE FINANCIAL FORECAST
M
Revenues: Ad Valorem Taxes - - Forecast
Actual
` 7=000
M ~
7,000,000
o
r dXQ000
I ,
6,000fJ00 ~
5=000 K4
f
5,000= 1
f
1
4.50 = 1
4.000000
i
3,5004000 of
3,ODO= E
2.90Q000 .1 {
:I
2.000 0
1,500A00 r.
,f
1„Oa01,000~ r
1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990
Year
14 CITY OF DENTON ~
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LONG RANGE FINANCIAL FORECAST
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Revenues: Other Taxes - • Forecast
Actual
8.500,000
8,000,000
7=000
?,000,000 ♦
♦
6,500;000
6,0OO=
5.5001000
- 6,000000
1
4,500,000
40001000 E
I I
3=000 ~
3,000,000
I
` 2=000
2,000000
%500000
1.000,000
9476 1977 1978 1979 1980 1981 1982 1983 1984 1985 1966 1987 1988 1989 1990
Year
CITY OF OENTON 15
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LONG RANGE FINANCIAL FORECAST
Revenues: Facility Fees - Forecast
=MEN. Actual _
660,000
640.000
620.000
600.004
500.000
560MO
540.000 ;
520,000
500,000
400.000 /
460.000
440.000
420.000
400.000',.
300.000
• 360,000 ~ ' +
340,000 o. k,
3p
0OA
3 00 f j
200,000
260,000
,a
240.000
220,000 + a
I
200WMW '
190.000
1604000 l
140.000
120.000 90.000
60.000 ---t I
4AWO
1976 1997 1979 1979 1984 1991 1992 1903 1994 1965 1986 1907 1480 1999 1990
Year
16 CITY OF OENTON -
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~ LONG RANGE FINANCIAL FORECAST
Revenues: Fines and Fees - • - Forecast _
Actual
1,200400
1,19],000 J
1,100,000
A♦
1.M ,
I R ,
900400 I
O/~D/,O/,
1 ~i~ ,
1 7=000
SN
s' 700,000
f1
6=0
600000 l
.5100=
a
450,000
y~ 400.000
k 350,000
300400
I
280,000
200M
18G,000 -i
1976 1977 V78 1999 1980 1981 1982 1983 1984 '1485 1986 1487 1988 19% 1990
Year
CITY OF DENTON 17
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LONG RANGE FINANCIAL FORECAST
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Revenues; Licenses and Permits - - Forecast
f Actual
640,000
620,000
600M _
580,000 40
560,000 ~ h+
540A00 ~ ~ ,i
520,000 ~
500= ►q
r!
4WIM
460= *1 E~
440.000
I
4200: 1
400=
3w= 1
330AW
340=
320=
300=
280,000
260000
240= ,
220=
•I
200,000
140.000
140.000 i
%N= ► a
100.000
80,000
dom
40.000
20.000 +---1
1276 1977 1478 1979 1980 1961 1982 9983 1964 1985 1986 1487 1988 1a84 1990
Year
18 CITY OF DENTON
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LONG RANGE FINANCIAL FORECAST
Revenues: Miscellaneous - - Forecast
actual
M 950,000
900,000
e50,oo0 ~
800.000 a 4f
750,000
700,000
I
650.000 0
~ . ~ 600,000
i_
j 558000
500.000
430,000
4D0,000
330000
300.000
i
230.000
200,000
160A00
100.000
1076 1977 1978 1979 1480 19e1 1982 1983 1994 1985 1986 1987 1968 1989 1990
Year
CITY OF OENTON 19
LONG RANGE FINANCIAL FORECAST -
Revenues: Intergovernmental - - Forecast
actual
440,000 ~420=00 i A .
400,000
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1
360,000 l
340=00 t
l
320,000 l . ,
l
300,000 l
280,000
260,000
240=00
220,000
200=00
180.000
160,000
140,000 +
I
%20,000
~t
100,000
80x000 .
60=00
40=0
20,000
1976 1977 '1478 1979 1980 1481 1982 1983 1984 1995 1996 1987 1988 1484 1940
Year
20 CITY OF DENTON
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LONG RANGE FINANCIAL FORECAST
r Revenues: Other Fund Transfer - - Forecast
Actual
6,600.000
6,200.000
` 6,OOOA00 ~r
- s~
s,eoo,ooo ~
_ 6,600,000 ,
12.
4,BOOA00
444=
41400.000
4XOA00
r
~ 4A~A00
3,800,000
3,600A00
3,400=
i 3,200,000
3AOOAW
2,800,000
r 2,6W=
2,b00A00
2,20UM
2,000,000
1,800,000
1
Umooo
v7d 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1981 1988 19tT9 1990
Year 21
CITY OF OENTON
cr
LONG RANGE FINANCIAL FORECAST
6.
Percent of Total Revenues
Fiscal Years 1985-1990
.a
Ad Valorem Taxes -
.a
Other Taxes
Facility Fees
Fines and Fees
License and Permits
FY 1985-86
FY 1986-87
❑ FY V87-88
FY 1988-e9,
Miscellaneous Revenue ® FY IM-90
Intergovernmental Revenue
other Fund Transfer
Interest Earned
0 2 4 6 e 10 12 14 16 19 20 22 24 26 29 30 32
22 CITY OF DENTON
LONG RANGE FINANCIAL FORECAST
Total Expenditures - • - Forecast
Actual
27,000.000
•
26,000.000
29,000.000 ,
24,000.000 ~l
23,000.000
2ZOO0Q000
I 4
=00.000
y 20AOO=
19,000.000
1800.000
nAGO,a~o
Y40=000
7sooo4000
14,0000
Ir 13, 000
r U=00O
II i
' 11,==
10.000=0
9=000
8,000.000
k 7, DDO
6=000
5,000.000
4,000.000 --T-+- 1 4----f !
1976 1977 1978 1979 1980 9981 1982 1483 1964 1485 1986 1997 1968 1989 1990
Year
CITY OF OENTON 23
LONG RANGE FINANCIAL FORECAST
Expenditures: General Government • Forecast
Actual
3.200AOO
i
3,1ooAOO
3,000,000 _
2.900000
2,8004000
2,7004000 ♦
2.6004000 -
Z5004000 P
aao0,o00 ♦
4300=
2.200,000
2,100AO0 ♦i
2.0004000
1,9004000
1,900AO0
1,7004000
1400AO0
1,5004000
%4OUW
1,3004000
1,2W=
9~9oa00o
140004000 . i i
9004000
9004000
700AOi0
600A00
I
6004000
400.000
300AM
200x000 --~-t 4
1976 99"17 we 1994 1920 1991 1962 1983 1994 1995 1996 1497 1989 1999 1990
Yoar
CITY OF OENTON
24
LONG RANGE FINANCIAL FORECAST
Expenditures: Legal - 0 - Forecast
Actual
5=000 480000
460M
I 440.000
I 420,000 ,
400,000
380,000 ~
360,000
1~ I
MOM
j 320,000
i
~ ! 300,000
280,000
264
240,000
220,000
200=
I
h i
t 140,000
~ V I
100/)00 r
1976 1977 '1978 1979 '1980 1981 1982 1983 1984 1985 1986 1987 19M 1989 1990
I
Year
CITY OF DENTON
i ! 25
i
LONG RANGE FINANCIAL FORECAST
Expenditures: Personnel - - Forecast
Actudl
380,000
360A00
I~
340,000 00 ♦ .
I
320AOD r
I
300.000
290„000
260,000
XOPD0
220000
200.000
WOOD
160000
140.000
120000
rl ~
100000
Bom
60,000
40000
20,000
1976 1977 1979 1979 1990 Vol 1992 1993 V04 '1995 1996 1997 1999 '1999 1990
Yeac
CITY OF DENTON
26
1
I
I
N
LONG RANGE FINANCIAL FORECAST
` Expenditures: Planning and Development
405,000 " * - Forecast
390,000 "f- Actual
~
375000 ,v
360M . '
345,000
60
330M r
315,000 ,
300.000 ,
285,000
270=
1 25UW
2401000
225,D00
I~ 210,000 (I
f M.1 0'3,000
100.000
165,000
f
'150'000 i
135,000
f ~ '105A00
+e 90400
i
mom
+ F
601000
1976 1977 1978 1979 1980 1991 9992 1483 1904 1995 1986 19e7 1988 1989 1990
Year
CITY OF DENTON _
27
i
LONG RANGE FINANCIAL FORECAST
N
Expenditures: Finance • • s Forecast
Actual
1900,000
1850,000 •
1,900,000
1750x000
1,700,000
165D= ,
M
1400,000
1,500000 ♦ ~ ~
'1450.000
,~/,~1 WTI
400.0000
1330,000
1,3=000
mm
1,200,000
1150=
1,100,000
1=000
1000,000 f
!I
950000 ~
900,000 I ~
8%000
eooaoo ,
750,000
700,000
650,000
1976 1977 1979 1979 1980 1981 1462 1963 1984 1985 1966 1987 1989 1989 1990
Yonr
28 CITY OF DENTON
I
I
i
I
i
i
I
4
LONG RANGE FINANCIAL FORECAST
Expenditures: Public Works Forecast
-f•• actual
5,200,DO0
5,000,000
4;BDOA00 ~ ~
4400M
I 4 .400,000
, X
_ a=oAoo
4AoDrDOO
3,800=
3,600,0DO
3.400M
3,200M
3,000,000
Z8DO=
2.600,000
2,4004100
8,200,000 I
2,000,000
1=000
1600,000
1,400.000
=000
1p00r000
eoaooo
1976 1977 1978 1979 1980 1981 1982 1983 1984 9985 1986 1987 1988 1989 1910
Yaar
CITY OF DENTON 29
LONG RANGE FINANCIAL FORECAST
I
Expenditures: Police - • - Forecast
Actual
5,000,000
4.800,000 r
4600,000
4,400.000 -
4,200M 064
4400400 ~ .
3.900,000
3.600,000 ♦ YA
3,400400
3,200,000
3400,000
2,800,000
2,600,000
?,400400 ,
`N 1
$200,000
i
2,000,000
1.900,000
,,6oD~ooo
1,400.000
1,200,000
!400400
1976 1477 1979 1979 1990 1981 1992 1983 1984 1985 1966 1987 1998 19,04 1990
Year
CITY OF DENTON
30
f
LONG RANGE FINANCIAL FORECAST
` Expenditures: Fire - - Forecast
-f+
` - 00J000 actual
4,9
4,6DOM ~
4,400,000
1
4,200= I
4AOO=
3,800,000
_3,d0O,000 ~
3.400,000
9,200,000
:=00O
2,800000
2,600.000
f Z400,A00
2,200,000
2,000=
1.900.000
1,600.000 i
~ fA0A0OO
r 1200.000
fA0DA0O
800.000
1976 1977 1979 1979 1990 1991 1992 1983 1994 1995 1996 1997 1999 1999 1990
a Year
CITY OF DENTON 31
a
I
J
LONG RANGE FINANCIAL FORECAST
M
.9
Expenditures: Parks and Recreation - • Forecast
Actual
2.100,000 -
2.000.000
I
1,900000
1,800,000
'
170U,000
s
1,600000 I
i
i
X500,000
,,400,000
1,300,000
1,200000
1,'100!)00 ,
1,000.000
'I
900000
i
r1
800,000 ►
f
700000
600,000
500,000
400=
1976 1977 1978 1979 1980 1961 1982 1983 1984 9985 1986 1987 1488 1989 1990
Year
32 CITY OF DENTON
I
i
!
M LONG RANGE FINANCIAL FORECAST
Expenditures: Library ' Forecast
Actual
- 900,000 ~
e5o,aoo ~
800,000
/
750,000
i
70OPOO
650,000
600,000
550`000
500,000
450000
400,000
350,000
300,000
2MOD0
200,000
150400 1-h--°-T-- --~---+--i
s 1976 1977 1978 1979 1980 1981 1982 1983 1964 1985 1986 1987 1988 1589 1990
Year
.y
CITY OF DENTON 33
t
f
ti
LCNG RANGE FINANCIAL FORECAST
Expenditures; Other Agencies - Farerest r
Actual
8506000
800,000
~I -
750.000
700,000 • I
6mow
600,000 /
5506000
500.000
450,000
400.000
3506000
300400
f
2506000
200400 F
.r
150,000
1001000
50.000 --a---
1976 1977 1978 1979 1980 1991 1982 1983 1984 1995 1986 1997 1988 1989 1990
Year
34 _ CITY OF DENTON
I
LONG RANGE FINANCIAL FORECAST
Expenditures: Miscellaneous - ♦ - Forecast
actual
1,9004000 •0
1,700.000
1,600,000 i Jr 00 0
1.500,000
1,40040=
1
1.300.000
_ I
1.2006000 I
f
1x100400
1,000.000
900,000
800,000
700,000
i
600,000
500.000
400.000
300.000
2004000
100400
1976 1977 1979 1979 1990 '%481 1992 1993 1984 1995 1986 1987 1988 1999 1990
Year
CITY OF DENTON 35
i
I
LONG RANGE FINANCIAL FORECAST -
Percent of Total Expenses ® FY 1985-86
Fiscal Years 1985-1990 FY 1986-87
❑ FY 1987-88
General Government ® FY 1968-89
® FY 1989-1990
Legal
Personnel
Planning and Development
Finance
Public Works
Police
V.
Fire
Parks and Recreation
Library
Other Agencies
Miscellaneous Expenses
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 16 19 20 21
36 - CITY OF DENTON
LONG RANGE FINANCIAL FORECAST
FINANCIAL STRATEGIES
f
I
i
I
r.
CITY OF DENTON
I
I`
I
1
L "I
LONG RANGE FINANCIAL FORECAST
FINANCIAL STRATEGIES
The strategies that follow have been adopted for the purpose of maximizing
General Fund performance and integrity. They are presented in this document
because, while their implementation may have immediate effect in some cases,
full benefits are expected to be realized only in the long term.
Growth
The City is presently experiencing a period of unprecidented growth both in
the number of new citizens and the amount of structural construction within
its boundaries. Prudence requires that the City adopt a strategy of
minimizing the financial burden such growth places upon public funds.
Rapid development of property near, but outside of current city limits also
requires that City staff carefully evaluate the fiscal impact that these
proximate communities will have upon the City. Where appropriate, annexation
may be considered to protect the City's physical and financial environment,
but in each case, careful review of the costs and benefits of annexation will
attend staff recommendations.
Bond Ratings
The City's financial structure and reporting system will be further developed
so that bond rating agencies will grant improved credit ratings for the City.
The objective of this strategy is to reduce the cost of debt service by
obtaining more favorable interest rates in future general obligation issues.
General Fund Balance
To preserve General Fund integrity, the Fund Balance should be maintained at a
level equivalent to approximately 8 to 10 percent of annual operating expenses.
Management Systems
Management systems will continually be reviewed for their impact upon
financial performance. In this light, the Energy Management/Operations
Analysis Division has been given responsibility for a comprehensive review of
City work processes. This at* fiscal year, the Division will conduct
productivity education programs, perform operational audits, and develop
measurement criteria for productivity evaluation. Each of which is expected
to contribute to cost containment and improved organizational effectiveness.
CITY OF D£NTON 37
I
LONG RANGE FINANCIAL FORECAST
STRATEGIES
Page Two
Financial-Management Information
The Finance Department will develop a financial fund monitoring system that
will identify current financial funds that threatened long range financial
ability. The system will employ various financial and environmental
indicators so that a broader financial picture may be observed than would
otherwise be possible.
The City will further develop its fixed asset accounting capability, Here, an
objective beyond improved control is the informed evaluation of the City's
infrastructural needs, both for new capital construction and for recovery from
deferred capital maintenance. Capability will also be developed to provide
detailed information on the "job-cost" of particular projects so that capital
productivity can be evaluated and cost recovery needs can be documented.
The City will implement the recently approved Fleet Maintenance Program, This
system will generate detailed, integrated financial information allowing
managers to control the operating and maintenance costs of the City's
vehicular equipment.
Employee B&:nefits
The Personnel Department intends to perform a comprehensive review of employee
benefits to ensure present programs make the best possible use of available
funds. Several innovations in the administration of benefit programs will be
reviewed. Two that offer strong promise of cost reduction are pre-hospital-
ization certification and post-hospitalization service auditing. These
programs are aimed at identifying unwarranted charges for health care services
by the providers of those services.
The recent Supreme Court ruling which determined that the Fair Labor Standards
Act (FLSA) shall apply to municipalities will have a definite financial impact ,i
r upon usl however, the magnitude of the decision cannot fully be measured at
this time. The Personnel Department is presently conducting an audit of our
staff in an attempt to identify employees who will be affected by FLSA,
Economic Development
In conjunction with the City of Denton Chamber of Commerce, the City has
I initiated a Strategic Economic Development Program, A principal objective of
the program is to encourage high quality commercial and industrial enterprises
to join the Denton community, thereby preserving the long tun vitality of the
Denton economy.
Elements of the programs are an introductory slide show, a City of Denton Fact
Book, and promotional messages to selected business audiences. Ia certain
cases, the City may also assist eligble applicants in their efforts to secure
relocation and construction capital by means of Industrial Revenue Bonds.
38 CITY OF DENTON
I
LONG RANGE FINANCIAL FORECAST
REVENUE FORECAST
l~
'i
~ I
I
I
r
i
I y
CITY OF DENTON
f
I
G I,
I
i
LONG RANGE FINANCIAL FORECAST _
REVENUE SUMMARY
I REVENUE
CATEGORY AD VALOREM TAXES - CURRENT
PROJECTED -
REVENUE I 1985-86 I 1986-87 I 1987-88 I 1988-89 f 1989-90
I 1$5,477,655 1 $5,768,316 156,382,932 1 $6,652,549 I $7,062,165 1
Description
All property, real personal, mixed tangible, intangible, annexations,
additions, and improvements to property located within the taxing unit's
jurisdiction shall be subject to taxation on January 1 of each year.
The City Council, following the final passage of the appropriations
ordinance shall set the tax rate and levy for the current fiscal year
beginning October 1 and continuing through the following September 30th.
The Council may each year, by ordinance, exempt taxes on automobiles from
the tax levy.
By September 1 or as soon thereafter as practical, the Council adopts a
tax rate for the current tax year. The annual tax rate must be set by
ordinance, resolution, or order depending on the method prescribed by law
for adoption of a law by the governing body. The Council may not adopt a
tax rate that exceeds the tax rate as calculated by Section 26.04 of the
1981 Tax Code by more than 3.0 percent until it has held a public hearing
on the proposed increase and otherwise complied with Section 26.06 of the
Code. A vote on the ordinance setting the tax rate must be separate from
the vote adopting the budget.
Assumptions
1. The tax rate will be 591 per hundred dollars valuation.
2. The delinquency rate will be 4.0 percent.
3. Exemptions will remain at the same level.
4. Assessed valuation will increase according to projection.
Methods
Assessed valuation projections were compiled by regression formula that
was driven by population and construction value estimates. Construction
value estimates were derived from trend-line analysis of historical
changes in construction value, adjusting for extraordinary growth in
fiscal years ending 1985 and 86. Having thus derived assessed valuation,
current tax revenue was taken as the product of assessed valuation, the
tax and collection rates.
CITY OF DENTON 39
LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY 1
RE EN E I
CATEGORY AD VALOREM TAXES - DELIN UENT
PROJECTED I I I
I REVENUE 1985-86 I 1986-87 I 1987-88 I 1988-89 I 1989-90 I
I I
I I $175,000 I $191,815 I $203,561 I $215,308 I $227 053 I
Description
Except as for provided by taxing units adopting the split-payment of taxes
method and the postponement of the delinquency date due to late mail out
of tax bills, all taxes are due on receipt of bill and are delinquent if
not paid before February 1 of the year following the year in which imposed.
The governing body of the taxing unit may adopt a procedure in conformance
with applicable statutes, a split-payment option for tax payment as
provided by V,T.C.A., Title I, Property Tax Code (1981) Section 31.03,
This option allows a taxpayer to pay one-half (1/2) of his property tares
before December 1, and pay the remaining one-half (1/2) of the taxes
without penalty or interest at any time before July 1 of the following
year. If this option is not utilized, taxes are due on receipt of notice
and delinquent as of February 1 of the year following the year in which
imposed.
Each year the collector for each unit shall prepare a cumulative and
current delinquent tax roll for the unit. A person's personal property is
subject to seizure for the payment of a delinquent tax, penalty and
interest he owes a taxing unit on his property. Such property may be sold
at a tax sale in accordance with the provisions of the State Property Tax
Code.
Assumptions
r
For the projection period, it is assumed that delinquent taxes will
continue to be recovered at a conservative percentage rate of the precious
year's tax levy.
Methods
The Recovery Percentage Rate was of the previous year's tax levy was
established by a trend-line analysis of the historical relationship
between annual tax levies and delinquent tax collection.
40 CITY OF OENTON
LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY
I REVENUE
I CATEGORY AD VALOREM TAXES - PENALTY AND INTEREST I
I PROJECTED
REVENUE I 1485-86 I 1986-87 I 1987-88 I 1488-89 I 1989-90
I I $54,176 I $46,856 I $44,688 I $57,523 I $62,356 I _
Description
A delinquent tax incurs a penalty of 6.0 percent of the amount of the tax
for the first calendar month it is delinquent, plus 1.0 percent for each
additional month or portion of a month the tax remains unpaid prior to
July 1 of the year in which it becomes delinquent. However, a delinquent
tax on July 1 incurs a total penalty of 12 percent of the amount of the
delinquent tax without regard to the number of months the tax has been
delinquent.
If a person who exercises the split-payment option as provided by the
Property Tax Code fails to make the second payment before July 1, the
second payment is delinquent and incurs a penalty of 12 percent of the
amount of the unpaid tax. A delinquent tax accrues at a rate of
1.0 percent for each month or portioa of a month the tax remains unpaid.
Assumptions
For the projection period, it is assumed that revenue from penalty and
interest on delinquent taxes will fluctuate due to the establishment of a
more efficient and effective collection procedures.
Methods
The estimates for this revenue category was derived from trend-line
projections and anticipated improvements in our collection system.
I
i
CITY OF DENTON
41
LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY
i REVENUE 1
I CATEGORY OTHER TAXES - SALES
I PROJECTED
REVENUE 1 1985-86 1 1986-87 1 1987-88 1 1988-89 1 1989-90
1 1 $5,103,587 1 35,686,181 I $6,298,333 I $6,781,484 1 0,072,637 1
Description
A general "sales tax" is levied on all persons and businesses selling
merchandise in the city limits on retail basis. Monies collected under
authorization of this tax is for the use and benefit of the city. No city
may pledge anticipated revenues from this source to secure the payment of
bonds or other indebtedness. In case of a delinquency of a taxpayer for
the local sales and use tax, the State Comptroller's Office shall notify
said city. The Comptroller acting through the Attorney General may bring
suit for the collection of delinquent sales tax. The city may join the
state in the suit or the city may initiate an individual suit for
collection on approval of the Attorney General's Office.
Assumptions
1. The relationship between the Dallas/Fort Worth Standard Metropolitan
Statistical Area (SMSA) personal income level, Denton population, and
sales tax revenue in Denton will continue along the same trend.
2. Personal -ucome in the Dallas/Fort Worth SMSA will rise at the rate
projected by the State Comptroller's Office of Revenue Eatimatiog.
3. Denton population will increase as predicted by the North Texas
Council of Governments.
4. The rate of inflation implicit in projected increases in personal "
income is insufficient to negatively affect demand for taxable goods
and services.
Methods
An econometric model was designed for use in projecting sales tax
revenue. A comparison of the Dallas/Fort Worth SMSA personal income
level, City of Denton population, and sales tax collections in the City of
Denton was executed using regression analysis. M4 s analysis showed the
variables were highly correlated, so personal income projections by the
State Comptroller were employed in the regression formula to estimate
sales tax revenues for the next five years.
42 CITY OF DENTON
I
i
I
1
I
LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY
- I REVENUE
I CATEGORY OTHER TAX - GAS FRANCHISE 1
I PROJECTED
1 REVENUE 1 1985-86 I 1966-87 I 1987-88 I 1988-89 1 1989-901
I 1
I 1 $230,006 $326,182 1 $347,823 I $369,463 1 $391,104 1
Description
The holder or grantee of any franchise may be requested, as :ompensation
for the rights and privileges enjoyed, to pay to the City each year such
f`I reasonable rim, which is not less than 2,0 percent of the gross receipts
of the business pursued by the holder of the franchise earned for services
rendered, or say the City Council may determine by ordinance, agreement,
and/or contract with such utility, This is a charge paid for the use of
City streets and public ways and ie in lieu of all other municipal
charges, fees, street rentals, pipe taxes or rentals, easement or other
like franchise taxes, inspection fees, and/or charges of every .:1nd except
only ad valorem and special assessment taxes for public improvemeats.
Assumptions
1. The relationship between the Dallas/Fort Worth SMSA Consumer Price
Index and the revenue from the gas franchise tax will continue along
I the same trend.
2. The historical relationship between population levels in the City and
gas franchise tax revenues will continue as well.
3. The Consumer Price Tndex in the Dallas/Fort Worth SMSA will rise at
the rate projected by the State Comptroller's Office nf Revenue
Estimating.
4. Population icu t-w City will increase at the rate predicted by the
North Texas Council of Governments.
Methods
!his revenue was projected by employing population estimates for the City
and CPI estimates for the Dallas/Fort Worth SMSA in a formula derived from
multiple regression analysis.
CITY OF DENTON 43
i
LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY
REVENUE I
CATEGORY OTHER TAX - TELEPHONE FRANCHISE
I PROJECTED I
REVENUE I 1985-86 I 1986-87 I 1987-88 1988-89 I 1989-90 I _
I I -
I $1350000 I $133,843 I $135,551 I $137,260 I $137,968
Description
The holder or grantee of any franchise may be required, as compensation
for the right or privilege enjoyed, to pay to the City such reasonable sum
(currently 2.0 percent) of the gross receipts of the business pursued by
the holder of the franchise earned for service rendered or as the Council
may determine by contract, agreement, and/or by ordinance with such
utility. This is a charge paid for the use of City streets and public
ways and is in lieu of all other municipal charges and taxes of every
kind, except only ad valorem atd special assessments for public
improvements,
Assumptions
1. The relationship between the DallaL/Fort Worth SMSA personal income
level and telephone franchise revenue in Denton will continue along
the same trend.
2. Personal income in the Dallas/Fort Worth SMSA will inr.rease at the
rate projected by the State Comptroller's Office of Revenue
Estimating.
Methods
This revenue category was projected with a regression formula, employing
predicted values of personal income in the region as the model determinant.
R,
44 CITY OF OENTON
_ LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY -
REVENUE I
CATEGORY OTHER TAX - TELEPHONE FRANCHISE
REVENUEED I 1985-86 I 1986-87 I 1987-88 I 1988-89 1989-90 I
I I -
$1350000 I $133,843 I $135,551 I $1310260 I $137,968 I
Description
The holder or grantee of any franchise may be required, as compensation
for the right or privilege enjoyed, to pay to the City such reasonable sum
(currently 2,0 percent) of the gross receipts of the business pursued by
the holder of the franchise earned for service rendered or as the Co,_ncil
may determine by contract, agreement, and/or by ordinance with such
utility. This is a charge paid for the use of City streets and public
ways and is in lieu of all other municipal charges and taxes of every
kind, exctpt only ad valorem and special assessments for public
improvements,
Assumptions
1. The relationship between the Dallas/Fort Worth SMSA personal income
level and telephone franchise revenue in Denton will continue along
the same trend.
2. Personal income in the Dallas/Fort Worth SMSA will inrrease at the
rate projected by the State Comptroller's Office of Revenue
Estimating,
Methods
This revenue category was projected with a regression formula, employing
predicted values of personal income in the region as the model determinant.
44 CITY OF DENTON
LONG RANGE FINANCIAL FORECAST
REVENUE SUN.MARY
1 REVENUE
CATEGORY OTHER TAX - CABLE TV FRANCHISE
PROJECTED
1 REVENUE 1 1985-86 I 1986-87 I 1987-88 I 1988-89 I 1989-90 I
i I
I I $76,300 I $79,637 I $84,287 I $880938 I $93,588 I
Description
The franchise granted by the City of Denton grants to the grantee or
holder of the franchise - the right and privilege to construct, operate,
and maintain in, upon, along, across, above, over, and under the streets,
alleys, public ways and public places now laid on or dedicated and that
all such extentions and additions thereto in the City; and poles, wires,
underground cables, conduits, manholes, and other television conductors
and fixtures necessary for the maintenance and operation of a CATV system
which shall provide for the interception, sale, transmission, and
distribution of television programs and other audio-visual electrical
pa signals and the right to transmit the same to the residents of the City,
' i
Assumptions
I~ For tho projection period it is assumed that revenues from this source
will increase moderately,
r±
j fJ
Methods
ra
Because of the lack of historical data for this revenue item, growth was
set as a conservative percentage increase per year.
CtTY OF DENTON 45
LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY
REVENUE I
CATEGORY OTHER TAX - MIXED BEVERAGE TAX
PROJECTED
REVENUE I 1985-86 I 1986-87 I 1987-88 I 1988-89 I 1989-90 I
I I $72,800 I $75,154 I $79,577 I $849000 I $88,423
Description
A tax at the rate of 20 percent is imposed on the gross receipts of a
licensee for the sale, preparation, or service of mixed beverages or from
the sale of ice or nonalcoholic beverages and consumed on the premises of
the permittee. This money is received from the State Comptroller
quarterly.
Assumption
1. The relationship between the personal income level in the Dallas/Fort
Worth SMSA and mixed beverage tai revenues in the City will continue
along the same tread.
2. The relationship between population in the City of Denton and mixed
beverage tax revenues will also hold.
3. Projections of personal income and population are accurate.
Methods
A multiple regression formula (drives by population estimates for the city 1{
and personal income estimates for the Dallas/Forth Worth SMSA) was used to
project this revenue item.
t.
{
d~
46 CITY OF DENTON
LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY
I
RE E I
CATEGORY OTHER TAX - HOTEL/MOTEL TAX
PROJECTED
REVENUE I 1985-86 I 1986-87 1987-88 I 1988-89 I 1989-90 I
I I $278,900 I 5328 b87 I !366,234 I 5403 782 I 3441 329 }
Description
A tax is levied upon the cost of occupancy of any room or space furnished $2.00 or by any hotel w authorizes a roomptaxyof Is at not*moreathanf7 0
percentoof
par day. The la
the consideration paid by the occupant of such room to such hotel.
Revenues from this tax are dedictated, by statute, to the following u3est
1. Promotion and encouragement of the arts
2. The acquisition of convention center facilities and related parking
3. The furnishing of facilities, personnel, materials for registration
of convention delegates
4. Promotional and tourist advertising of the City
5. Improvements to, enlargement, as well as, the repairing, operation,
and maintenance of convention center facilities, civic centers,
museums, auditoriums, and parking areas or facilities in the
immediate area of the convention facilities.
6. Historical preservation and restoration, and I
7. The pledge of tax revenues for the repayment of bonds issued for the
construction of civic centers, museums, libraries, and certain
recreational facilities.
Comments The City of Denton allocates 99 percent of these revenues to the
m er of Commerce and the Denton Cultural Council.
Assumptions
It is assumed that revenue from hotel and motel taxation will rise
aggressively during the forecast period.
Methods
Because this revenue is passed-through to other agenct.es, the projection
is based on a simple inflationary increase, with appropriate expenditure
items likewise expanded.
CITY OF DENTON 47
LONG RANGE FINANCIAL FORECAST _
REVENUE SUM.MY -
REVENUE
CATEGORY FEES FROM REVENUE PRODUCING FACILITIES I
PROJECTED 1
I REVENUE I 1985-86 I 1986-87 I 1987-88 I 1988-89 1 1989-90 I
I I
I $390,522 I $455,486 I $520,656 I $585,828 1 $6510000 I
Description
This revenue derives from fees charged for the use of the following City n.
facilitiess
Swimmivg Pool Recreation Program Facilities
Cemetery Athl.iic Program Facilities
Community Buildings Ambulances
Airport Williams Square Parking
Fire Inspections
Assumptions
1. The relationship between City population, inflation, and facility-fee
revenues will hold.
2. City population will increase at the rate projected by the North
Texas Council of Governments.
Methods
at
A regression formula, driven by population and inflation estimates, was
used to project this revenue class. I
e~
.
48 CITY OF OENTON
LONG FLANGE FINANCIAL FORECAST
REVENUE SUMMARY
r
REVENUE
CATEGORY FINES AND RELATED FEES I
PROJECTED I
REVENUE I 1985-86 1 1986-87 1 1987-38 I 1988-89 I 1989-90 I
I 1 3893,000 1 $1,012,437 ,063,587 1 $1,144,737 1 $10166,887 I
Description
This revenue derives from fines imposed by municipal court and fees
charged by related agencies. The list of sources for this revenue is:
Municipal Court Fines Police Escort Fees
Municipal Court Coat Fees Animal Control Fees
Auto Pound Fees
Assumptions
1. The relationship between the Dallas/Fort Worth SMSA Consumer Price
Index and revenues from City fines and fees will continue along the
same trend.
2, The relationship between City population and fines and fees revenue
will also hold.
M 3. The CPI projections for the Dallas/Fort Worth SMSA made by the State
Comptroller's Office of Revenue Estimating will prove accurate.
4. The City population projection by North Texas Council of Government
will prove accurate. 1
II
Methods
This revenue was projected by use of a regression formula that was driven
by CPI and population estimates.
I
CITY OF DENTON 49
i
l
I
P
LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY
1
J CATEGORY LICENSES AND PERMITS
J PR0IECTED I
REVENUE 1985-86 1986-87 1987-88 1988-89 1989-90 !
I $455,500 1 $527,549 I $566,678 $594 448
I $621,899 I
Description
This revenue is composed of license and permit fees of the following types:
Zoning Permits and Petitions Miscellaneous Permits
M Tax Certificates Excavation Permits
Wine and Beer Permits Licenses Loading Permits
Vital Statistics Electric/Plumbiag Permits
(Birth and Death Certificates)
Building Permits Vending Permits
Assumptions
1. The historical relationship between the coastuction value of
newly-permited sturctures is Denton, the rate of inflation, and
license and permit revenue will hold.
2. Consruction value projections by the Department of Finance will prove
accurate.
i
Methods
Revenue items in this class were projected by a regression formula that
used predicted construction values and inflation rates as determinants.
1
i
50 CITY OF CU9TON
I
i
I
I
i
I
T
LONG RANGE FINANCIAL FORECAST -
00
REVENUE SUMMARY
I
CATEGORY MISCELLANEOUS REVENUES
PRO ECTED
REVENUE 1985-86 I 1986-87 I 1987-88 I 1988-89 I 1989-90 I
I I $654,100 I $722,908 I 3169 204 I $846,655 I $925.648
I
Description
Revenue from this class is composed of the following souz:es:
Parking Pieter Fees Rent and Concession Fees
Electric Inspections Miscellaneous Revenues
'lumbing Inspections Sale of Land
;tt,et Cut License and Sale of General Fixed Aesests
:repair Fees
Assumptions
1. The relationship between personal income in the Dallas/Fort Worth
SMSA and revenues from this class will hold.
2. Personal income projections will prove accurate.
Methods
i
Revenue items in this class were projected by a regression formula that
used predicted construction values and inflation rates as determinants.
CITY OF DENTON ` 31
- LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY
REVENUE
CATEGORY INTERGOVERNMENTAL REVENUES I
PROJECTED T-
I REVENUE I 1985-86 I 1986-87 1 1987-88 I 1988-89 I 1989-90 I
I 1 $3620633 I $353,361 I $377,234 1 $4010107 ( $424,983 I
Description
This revenue is composed of revenues received from:
County Funding for Civil Defense
County Funding for Litrary
County Funding for Ambulance
Federal Funding for Civil Defense
Small City Funding for Ambulance Service
Refunds of FICA Payments
Grants
Assumptions
I 1. County funding for the library will continue 'without interruption r~
thru Fiscal Year 1990.
2. No refunds under the Federal Insurance Contributions Act will be 11
received. e4
3. Past trends in other-goverament appropriations for these activities ~i
will continue.
r
Methods P'
Continuing revenues in this class were projected at an annual growth rate
which varied from 5.0 to 7.0 percent. The ra a of growth was derived from
l trend-line projections.
r
I ~
52 - CITY OF DENTON
I
LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY
I
REVENUE
CATEGORY OTHER FUNDS TRANSFERS - ELECTRIC ADMINISTRATION
PROJECRD I I _ 'I__T , -I --------I
I_REVENUE I 1985-86 I 1986-87 1 1987-88 I 1988-89 1 1989-90
I
$11314,42b I $1,4550717 I $1,757.002_1 $1,698,298 1$1,813,572 1
Description
Aduiaistrative services' charges are allocated to all Er.terprise Fund
activities (Electric, Water/Sewer, and Sanitation) for indirect management
and administrative support given by General Fund departments. In this
particular case, the allocation charge is made to the Electrical /Utility
Fund and the corresponding payment is made to the General Fund.
Assumptions
1. The charge to the Electric Fund for the cost of administrative
services was sufficiently set to fully recover the cost of these
services in Fiscal Year 1985-86 by the cost analysis performed
by David M. Griffith and Assoicates.
i
Ii. increase in this revenue will therefore follow growth in the
cost of these services after Fiscal Year 1985-86.
Methods
i
This revenue was projected by applying the yearly average rate of growth
ih contributing departmental expenditures to the level of charge set by
the Griffith Study for Fiscal Year 1985-86.
i
CITY OF DENTON 53
.
LONG RANGE FINANCIAL FORECAST r
REVENUE SUMMARY
1 ~EEQENOS- I
CATEGORY OTHER FUND TRANSFERS - ELECTRIC RETURN ON INVESTMENT
PRO ECTED
REVENUE I 1985-86 I 1986-87 I 1987-88 T 1988-899 1989-90
$1,689,280 1 51,797,053 1 $1,863,635 1 $11930,217 1 $1,996,766 1
Description
Return on Investment involves the transfer of funds from the Utility
System Fund to the General Fund on a discretionary basis but shall not be
more than 6.0 percent of the net investment. The intent of the
discretionary transfer is to reimburse the citizeney by contributing
revenues to the General Fund, thereby easing the ad valorem tax burden,
Assumptions
1. Return on investment for any cu; ent year will be calculated by
applying the appropriate rate of re:urn to the value of the Electric
Fund's net plant in service during the previous year.
2. The value of net plant in service will increase each year by 70
percent of the value of capital improvements scheduled for
implementation in that year.
Methods ~i
This revenue was projected by the means 11,+ted -..bove. e~
sI
►i
t
` 54 _ CITY OF DENTON
I .
I
LONG RANGE FINANCIAL FORECAST
REVENUE Sl
I REVENUE
CATEGORY OTHER FUND TRANSFERS - WATER/WASTEWATER ADMINISTRATION
I PROJECTED +
REVENUE 1985-86 t 198b-87 1987-88 1988-89 1989-a0
I $793 298 I $857,585 I $902 OO9 I _$946,432
$990 836 I
Deacriptio~t
Administrative services, charges are allocated to the Utility Fund (Water
and Sewer) account in a cost allocation plan by a determined rate for
indirect management and administrative support given by General Fund
departments.
Assumptions
The miniaht
a
t aivet for the coat of
servi es Wwas ater/Was,evaterufficiently set Fund to fully recover the
cost of these services in Fiscal Year 1985-86 by the cost analysis
performed by David M. Griffith and Associates.
2. Growth in this revenue will therefore follow growth in the coat of
these services after Fiscal Year 1985-86.
Methods
This revenue was projected by applying the yearly average rate of growth I
in contributing departmental expenditures to the level of charge set by
the Griffith Study for Fiscal Year 1985-86.
i
I
CITY OF DENTON
55
LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY
REVENUE I w
CATEGORY OTHER FUND 'TRANSFERS - WATER/WASTEWATER RETURN ON INVESTMENT
'-'l'RUJECZ'6 i
REVENUE 1 1985-86 1 1986-87 1 1987-88 I 1988-89 I 1989-90 I
$718,427 $859,985 $933,878 $1,011,777 $1,081,667 I
Description
Return on Investment involves the transfer of funds from the Utility
System Fund to the General Fund on a discretionary basis but shall not be
more than 6.0 percent of the net investment. The intent of the
discretionary transfer is to reimburse the citizenry by contributing
revenues to the General Fund, thereby easing the ad valorem tax burden.
Assumptions
11 Return on Investment for any current Year will be calculated by
applying the appropriate rate of return to the ralue of the
Water/Wastewater Fund's net plant in service during the previous year.
2. The value of net plant in service will increase each year by 70
percent of the value of capital improvements scheduled for
implementation in that year.
Methods
This revenue was projected by the means listed above.
'4 k
~I
11
t
w
t
r
CITY OF DENTON
~k
f
I
r T-~
LONG RANGE FINANCIAL FORECAST
REVENGE SUMMARY
I
KEVENUE
CATEGORY OTHER FUND TRANSFER - SANITATION ADMINISTRATION
1 PROJECTED
I REVENUE I 1985-86 I 1986-87 1 1987-88 I 1988-89 1 1989-90
F- I
I $245,000 I $245,000 I $246,939 I ...$2919884 I $298,828 I
Description
Administrative charges for General "und personnel management and
supervision are sl'ocated to Sanitation Fund and subsequent division
activities.
payment for r the Gtneral
indirect management support and administrative
Fund is support.
Assumptions
For the projection period, it is assumed that the Sanitation Fund will
is rove its financial position such that it will be able to fully
reimburse the General Fund for the cost of administration services that it
receives.
Methods
This revenue was projected by applying the yearly average rate of growth
in contributing departmental expenditures to the level of charge set by
the Griffith Study for Fiscal Year 1985-86.
1
r
CITY OF DENTON 57
LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY 011 1
REVENUE
I_ CATEGORY OTHER FUND TRANSFER - BOND FUND
I PROJECTED I I I I
REVENUE I 1985-86 I 1986-87 I 1987-88 1.988-89 I 1989-90
I I 6270,000 I $275,000 I $260,000 I $287,000 I $300,000
Deacriptioa
These revenues are payments to the General Fund from the Bond Fund for
General Fund labor expenditures on bond-financed projects.
Assumptions
It is assumed that labor capitalization will continue at the same service
level.
Methods
The City Engineer's assistance was involved in projecting the revenue
numbers for this category.
i
rl
G~
PA
j
i
58 CITY OF DENTCN -
.-r
LONG RANGE FINANCIAL FORECAST
REVENUE SUMMARY
- I REVENUE
CATEGORY OTHER FUND TRANSFER - REVENUE SHARING
PROJECTED
REVENUE I 1985-86 I 1986-87 I 1987-88 I 1988-89 I 1989-90 I
I $264,561 E $272,198 1 $190,143 I $108,088 $26,034 I
Description
These revenues derive from a reallocation of federal taxes to state and
local governments. Present authorizations and appropriations expire
September 30, 1986.
Assumptions
For the projection period, it is assumed that Federal Revtaue Sharing will
continue.
Methods
This revenue source was projected to reflect, for the most part, gradual
decreases because of the uncertainty of future funding level.
I~
w CITY OF DENTON 59
r
LONG RANGE FINANCIAL FORECAST r
REVENUE SUhDIARY
REVENUE
CATEGORY INTEREST EARNED
PROJECTED I
REVENUE I 1985-E6 I 1986-87 I 1987-88 I 1988-89 I 1989-90 I
I $303,000 $374,046 $390,208 ( $419,370 5432,532
Description
Ln accordance with state statutes, hide are received by City Council for a~
the privilege of maintaining City's ge,.,ral revenues in a particular bank
account, From October 1, 1983 thru September 30, 1985 the First State
Bank of Denton Is the City's Depository (designated by Council action) and
the renewal of our contract with them is presently being renegotiated.
City monies maintained in time deposits (certificates of deposit) are c~
negotiated by the City with any an ocated within the city limits - ,
allowing First State Bank first and last refusal on rate. It is the
intent of the City to purchase certificates of deposit rather than
purchase government securities when, for a desired maturity date, the C.
D. interest rate is equivalent or higher than the market yield for the
proposed security.
City monies maintained in a sav_ 7ngs account are at the maximum allowed
(5.25 percent) by law - annually.
The City has the right to renegotiate repurchase agreements for
investments leas than 30 days. First State Bank will be given first and
last refusal on rate. Restrictions apply to interest revenue received
from the investment of indebtness funds. When deposits in the General
Fund exceed the required amounts, the City Manager and the Director of
Finance may invest such temporary excess funds in legally-authorized,
short-term investment instruments. °j
F~
i
Assumptions
For the forecast period it is expected that this revenue will increase
directly with the volume of cash flow.
Methods
To forecast this revenue category, expertise of the Finance Director was
the primary source of information. He projected the percentage change for
each of the years.
60 CITY OF DENTON
I
L
;
LONG RANGE FINANCIAL FORECAST
EXPENDITURE FORECAST
I
_ i
r
i
i
f
I
t i
I
w
I
i
CGTY OF DENTON-.._
i
I
ti
I
1
LONG RANGE FINANCIAL FORECAST
EXPENDITURE SUMMARY
I EXPENDITURE
I CATEGORY GENERAL GOVERNMENT _
I PRO ECTED -
---r-EXPENDITURE 1985-86 I 1986-87 t,gg7_88 1988-89
I_ 152,125,161 132,485,419 I $2,612,175 $3,001,551 1 $3,1399622 I
` Description
I
This category consists of:
General Government Administration
Building Operations
" Operations Analysis and Energy Management
Word Processing Center
Data Processing
Assumptions
1. New committed coats will be incurred by the Operations Analysis/
Energy Management Division to expand the scope of the City's
Productivity Program. Also, new committed costs will be incurred by
General Government Administration for economic development purposes.
The timing and incremental current cost of these changes will bet
a. Fiscal Year 1986-87 - $253,106
f b. Fiscal Year 1981-88 - 0
c. Fiscal Year 1988-89 - 2110000
d. Fiscal Year 1989-90 - 0
2. Except as listed above, service levels will be held constant,
3. Expenditure increases will be equivalent to contemporaneous increases
in the coat of goods and services in the Dallas/Ft. Worth SMSA, as
recorded in the Consumer Price Index, New committed costa, however,
will increase above their current coat by the compounded rate of CPI
increase experienced before their incurrence.
4. Consumer Price Index projections for the Dallas/Ft. Worth SMSA by the
State Comptroller's Office of Revenue estimating will prove accurate.
Methods
a
To forecast this expenditure category, multipliers derived from CPI
projections were applied to one year's expenditure to obtain the next
year's expenditure. Additionally, new committed costs were added to the
estimate of appropriate years, after first Increasing the current value of
the new coat by the compounded rate CPI increase experienced before their
incurrence. An inverse process was used to establish future value for
negative incremental costa.
CITY OF DENTON 61
LONG RANGE FINANCIAL FORECAST -
i
EXPENDITURE SUMMARY
1 EXPENDITURE
CATEGORY LEGAL 1
PROJECTED
EXPENDITURE I 1985-66 1 1986-87 1 1987-8f 1 1988-89 1 1989-90
1 1 5385,978 1 $414,955 1 $434,223 I $456,802 1 $482,730 1
Description
This category consists oft
Legal Administration
Municipal Court
Assumptions
1. New committed cost will be incurred by the Legal Department due to
the expected implementation of an automated legal research system.
The timing sad incremental current cost of these items will bet
as Fiscal Year - 1966-87 - $10,681
b. Fiscal Year - 1987-88 - (1,659)
C, Fiscal Year - 1988-89 - 0
d. Fiscal Year - 1989-90 - 3,910
2. Expenditure increases will be equivalent to contemporaneous increases
in the cost of goods and services in the Dallas/Fort Worth SMSA, as 4
recorded in the Regional Consumer Price Inoex.
3. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Office of Revenue Estimating will prove '
accurate.
Methods
To forecast this expenditure category, multipliers derived from CPI
projections were applied to one year's expenditure to obtain the next
year's expenditure. Additionally, new committed costa were added to the
estimate of appropriate years, after first increasing the current value of
the new cost by the compounded rate of CPI scresse experienced before
their incurrence. An inverse process was used to establish future value
for negative incremental costs.
M
62 CITY OF OENTON
eJ
i
i
LONG RANGE FINANCIAL FORECAST
EXPENDITURE SUMMARY
EXPENDITURE
I-
I
CATEGORY PERSONNEL
PROJECTED ---i---
I EXPENDITURE 1985-86 1986-87 I 1987-88 1988-89 1 191 89-90 _i
$314,261 3328,
409 3345 158 I $363,106 I !319,809 I
Description
This category solely consists of the Personnel Department.
I
Ass_ umptif,as
1. Service levels will be held constant.
2. No new ecmmitted coats will be incurred,
3. Expenditure increases will be equivalent to contemporaneous increases
in the cost of goods and services in the Dallas/Fort Worth SMSA, as
recorded in the Regional Consumer Price Index,
4. Consumer Price Index projections for the Dallas/Fort Worth SNSA by
the State Comptroller's Office of Revenue Estimating will prove
accurate.
Methods
To forecast this expenditure category, multipliers derived from CPI
projections were applied annually.
1
11r{` i
f ~
CITY OF DENTON 63
a
i
LONG RANGE FINANOIAL FORECAST
EXPENDITURE SUIoMy
I EXPENDITUR£
CATEGORY PLANNING AND COMMUNITY DEVELOPMENT 1
PROJECTED I
EXPENDITURE I 1985-86 1 1986-87 I 1987-88 J 1988-89 I 1989-90
I 3335 154 1 $350 236 ~JJJJ.366,096 I $387,239 1 $405,052 Description
This category consists solely of the Department of Planning and Community
Development.
Assumptions
1. Service levels will be held constant.
2. No new committed coats will be incurred. W
3. Expenditure increases will be equivalent to contemporaneous increases
in the cost of goods and services in the Dallas/Fort Worth SMSA, as
recorded in the Regional Consumer Price Index.
4. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Office of Revenue Estimating will prove
accurate.
Methods
To forecast this expenditure category, multipliers derived from CPI
projections were applied annually.
+i
r~
r~
Y.
64 CITY OF DEN?ON -
LONG RANGE FINANCIAL FORECAST
EXPENDITURE SUMMARY
EXPENDITURE
CATEGORY FINANCE
I PROJECTED 1
j °PENDITURF I 1985-86 I 1986-87 I 1987-88 1988-89 1 1989-90
I 1_51,467,597 1511551,571 1510669,537 131,777,381 1 $1,859,769
Description
This category consists solely of the Finance Department,
Assumptions
1. New committed costa will be incurred by the department to increase
services to levels mandated by current policies. The timing and
incremental current cost of these services will bet
a. Fiscal Year 1986-87 - 316,500
b. Fiscal Year 1987-88 - 34,000
co Fiscal Year 1988-89 - 179500
d. Fiscal Year 1989-90 - 530
2. For the Data Processing Department, no new committed costs will
incurred and service levels will be held constant,
3. Expenditure increases will be equivalent to contemporaneous increases
in the coat of goods sad services in the Dallas/Fort Worth SMSA, as
recorded in the Consumer Price Index. New committed costa, however,
will increase above their current coat by the compounded rate of CPI
Increase experienced before their incurrence,
4, Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Office of Revenue Estimating will prove
accurate.
Me t l,od s
To forecast this expenditure category, multipliers derived from CPI
projections were applied to one year's expenditure to obtain the next
year's expenditure. Additionally, new committed costa were added to the
estimate of appropriate years after first increasing the current value of
the new cost by the compounded rate of CPI increase experienced before
their incurrence. An inverse process was used to establish future value
for negative incremental costs.
CITY OF DENTON 65
LONG RANGE FINANCIAL FORECAST _
EXPENDITURE SUMMARY -
1
EXPENDITURE
CATEGORY PUBLIC WORKS 1
PROJECTED-I
EXPENDITURE 1 1985-86 1 1986-87 1 1987-88 1 1988-89 1 1989-90 i _
$4,097,729 1 t4,2Ct0127 54,500,515 $4,734,542 1$5,027,745
Description
This category consists oft
Public Works (proper)
PY
Emergency Management
Airport
h•
Assumptions
1. New committed cost will be incurred by the Public Works Department as
the Department complies with its mandate to establish an Animal
Control Advisory Board. The Department also anticipate additional
cost due to dc.eriorating public facilities and increasing service
area. The timing and incremental current cost of these items will bet
as Fiscal Year - 1989-90 - $60,000
L. Expenditure increases will be equivalent to contemporaneous increases
in the cost of goods and services in the Dallas/Fort Worth SMSA, as
recorded in the Regional Consumer Price Index.
3. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Offica of Revenue Estimating will prove
accurate.
Methods
To forecast this expenditure category, multipliers derived from CPI
projections were applied to one year's expenditure to obtain the next
year's expenditure. Additionally, new committed cost was added to the
estimate of the appropriate year, after first increasing the current value
of the new cost by compounded rate of CPI increase experienced before
their incurrence.
66 CITY OF DENTON
LONG RANGE FINANCIAL FORECAST
EXPENDITURE SUMMARY
EXPENDITURE
I CATEGORY POLICE
PROJECTED
EXPENDITURE 1 1985-86 1 1986-87 1 1987-88 1 1988-89 1 1989-90
1 $3,494,669 1$3,856,248 I $4,1141711 ( $4,4500160 1 $4,832,718 1
Description
This category consists solely of the Police Department.
Assumptions
1. New committed costs will be incurred by the Police Department as the
Department complies with its mandate to absorb the cost of a
phase-out of State Grant funding for Prevention, Narcotics and
Juvenile operations. Also, maintaining current service levels in a
growing city will necessitate additional personnel and patrol units.
The timing and incremental current cost of these items will be:
a. Fiscal Year 1986-87 - $188,000
b. Fiscal Year 1987-88 - 54,100
C. Fiscal Year 1988-89 - 1010100
d. Fiscal Year 1989-90 - 141,500
2. Expenditure increases will be equivalent to contemporaneous increases
in the cost of goods and services in the Dallas/Fort Worth SMSA, as
recorded in the Consumer Price Index. New committed costs, however,
will increase above their current cost by the compounded rate of CPI
increase experienced before their incurrence.
3. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Office of Revenue Estimating will prove
accurate.
k Methods
` To forecast this expenditure category, multipliers derived from CPI
projections were applied to one year's expenditure to obtain the next
year's expenditure. Additionally, new committed costs wete added to the
estimate of appropriate years, after first increasing the current value of
the new cost by the compounded rate of CPI increase experienced before
their incurrence.
CITY OF DENTON 67
1
I
LONG RANGE FINANCIAL FORECAST
EXPENDITURE SUMtARY
I EXPENDITURE I
I CATEGORY FIRE
PROJECTED II
EXPENDITURE 1985-86 1986-87 1987-88 1988-89 1989-90
I I I
I_ I $3,3540848 I $3,963,685 154,704,050 1 $4,762,409 I $4,748,954 I
Description
This category consists solely of the Fire Department.
Assumptions
1. New committed coats will be incurred by the Fire Department as the
Department complies with its mandate to operate a new fire substation
and to maintain current service levels in a growing city. The timing
and incremental current cost of these new expenidtures will bet
a. Fiscal Year 1986-87 - $421,300
b. Fiscal Year 1987-88 - 471,200
c. Fiscal Year 1988-89 - (155,000)
d. Fiscal Year 1989-90 - (185,000)
2. Expenditure increases will be equivalent to contemporaneous increases
in the cost of goods and services in the Dallas/Fort Worth SMSA, as
recorded in the Consumer Price Index. New committed costs, however,
will increase above their current cost by the compounded rate of CPI
increase experienced before their incurrence.
3. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Office of Revenue Estimating will prove
accurate. j
Methods
I
To forecast this expenditure category, multipliers derived from CPI
projections were applied to one year's expenditure to obtain the next
year's expenditure. Additionally, new committed costs were added to the
estimate of appropriate years, after first increasing the current value of
the new cost by the compounded rate of Cl'I increase experienced before
their incurrence. An inverse process was coed to establish future value
for negative incremental costs.
68 CITY OF DENTON
1
I _ LONG RANGE FINANCIAL FORECAST
EXPENDITURE SUMMARY
S EXPENDITURE
CATEGORY PARKS AND RECREATION
PROJECTED
EXPENDITURE ( 1985-86 1 1986-87 1 1987-88 I 1988-89 1989-90
I
I I 1 $1,622,748 ( $106950772 1 $1,782,256 1 $10874,933 1 $2,0240025
Description
This category consists solely of the Parks and Recreation Department.
Assumptions
1. New committed costs will be incurred by the department as the Parks
and Recreation Maater Plan is implemented. The timing and
'I incremental current cost of these items will bet
a. Fiscal Year 1.989-90 - $50,000
2. Expenditure increases will be equivalent to contemporaneous increases
in the cost of goods ar•,_ services in the Dallas/Fort Worth SMSA, as
recorded in the Consumer Price Index. New committed costs, however,
will increase above their current coat by the compounded rate of CPI
increase experienced before their incurrence.
3. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Office of Revenue Estimating will prove
accurate.
Methods f
To forecast this expenditure category, multipliers derived from CPI
111 projections were applied to one year's expenditure to obtain the next
year's expenditure. Additionally, new committee cost was added to the
estimate of the appropriate year, after first i++creasing the current value
of the new cost by compounded rate of CPI increase experienced before
1 their incurrence.
f .
I
CITY OF DENTON 69
II
r
LONG RANGE FINANCIAL FORECAST _
EXPENDITURE SUMMARY
EXPENDITURE
I CATEGORY LIBRARY
PROJECTED
II EXPENDITURE I 1985-86 1 1986-87 1 1987-88 1 1988-89 1 1989-90 1
I
1 I $690,995 $732,958 1 $781,761 1 034,429 1 $885,381 I
Description
This category consists solely of the Library. ti
Assumptions
1. New committed cost will be incurred by the Library as the
organization progress toward meeting the Texas Library Standards.
The timing and incremental current cost of these new expenditures
will be:
.J
a. Fiscal Year - 1986-87 - $10,000
b. Fiscal Year - 1987-88 - $10,000
c. Fiscal Year - 1988-89 - $10,000
d. Fiscal Year - 1989-90 - $10,000
2. Expenditure increases will be equivalent to contemporaneous increases
in the cost of goods aid services in the Dallas/Fort Worth SMSA, as
recorded in the Regional Consumer Price Index.
3. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Office of Revenue Estimating will prove
accurate.
Methods
To forecast this expenditure category, multipliers derived from CPI r~
projections were applied to one year's expenditure to obtain the next
year's expenditure. Additionally, new committed costs were added to the
estimate of appropriate years, after first increasing the current value of
the new coat by the compounded rate of CPI increase experienced before
their incurrence.
70 CITY OF DENTON
I
N
I
LONG RANGE FINANCIAL FORECAST -
EXPENDITURE SUMMARY
EXPENDITURE I
CATEGORY OTHER AGENCIES - HEALTH I
PROJECTED
EXPENDITURE I 1985-86 I 1986-87 I 1987-88 I 1988-89 I 1989-90
I I $100,000 I $104,500 I $1090830 I $115,541 I $120,856 I
I
Description
This category consists of contributions to the joint City-County Health
Unit.
Assumptions
4 1. Service levels will be held constant.
2. No new committed costs will be incurred.
3. Expenditure increases will be equivalent to contemporaneous increases
in the cost of goods and services in the Dallas/Fort Worth SMSA, as
recorded in the Regional Consumer Price Index.
4. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Office of Revenue Estimating will prove
accurate.
Methods
To forecast this expenditure category, multipliers derived from CPI
projections were applied annually.
~ I
r -1
CITY OF DENTON 71
1
LONG RANGE FINANCIAL FORECAST
EXPENDITURE SUMMARY
W
EXPENDITURE I
CATEGORY OTHER AGENCIES_: COMMUNITY AGENCIES 1 "
I PROJECTED
I EXPENDITURE I 1985-86 i 1986-87 I 1987-88 I 1988-89 1 1989-90
I .V
I 3131,801 I $137,738 1 $144,763 3152,291 1 $159,292
` Cescription M
` This category consists of contributions to:
Fred Moore Day Care Denton City-County Day Care
Friends of the Family Handi-Hop
SPAN United Way
RSVP Domino Hall
Human Resources
Assumptions
1. Service levels will be held constant.
2. No new committed costs will be incurred.
3. Expenditure increases will be equivalent to contemporaneous increases
in the coat of goods and services in the Dallas/Fort Worth SMSA, as
recorded in the Regional Consumer Price Index.
4. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptrollers Office of Revenue Estimating will prove
accurate,
i
Methods
1 To forecast this expenditure category, multipliers derived from CPI
projections were applied annually,
f
12 CITY OF DENTON
d.
1 ,
V
- LONG RANGE FINANCIAL FORECAST
EXPENDITURE SUMMARY
j EXPENDITURE
j CATEGORY OTHER AGENCIES - VISITOR /CONVENTION BUREAU
j PROJECTED
` EXPENDITURE 1985-86 1986-87 1 1987-88 1 1988-89 1989-90 -
j 1 1138 055 j X144 267 1 3151 625 I 1159 510 1 $166 847 1
I
Description
This category consists of contributions to the Visitor/Convention Bureau,
Assumptions
1. Expenditures will equal 49.5 percent of Hotel/Motel Tax revenue.
2. Hotel/Hotel Tax revenue will increase according to projection.
Methods
This projection was obtained by applying 49.5 percent to Hotel/Motel Tax
revenue projections.
N
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I
1
CITY OF DENTON 73
LONG RANGE FINANCIAL FORECAST
LXPENDITURE SU1K RY
I EXPII~DITURE 1
CATEGORY OTHER AGENCIES - CULTURAL CONFEDERATION
{ PROJECTED II
EXPENDITURE I 1985-86 I 1986-87 1 1987-88 1 1988-89 1989-90
{ 1 $138,055 1 $144,267 1 $151,625 1 $159,510 1 $166,847 f
Description
This category consists of contributions to the Cultural Confederation.
f tq
Assumptions
1. Expenditures will equal 49.5 percent of Hotel/Motel Tax revenue.
2, Hotel/Motel Tax revenue will increase according to projection. t'
w
Methods
This projection was obtained by applying 49.5 percent to Hotel/Motel Tax
revenue projections.
i
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I G' 1
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74 CITY OF OENTON
i
LONG RANGE FINANCIAL FORECAST _
EXPENDITM SUDMY
i
I CATEGrdY OTHER AGENCIES - APPRAISAL DISTRICT 1
I--rROT TED
I EXEENDITURE 1 1985-86 I 1986-87 1 1987-88 I 1988-89 1 1989-90 1
I 8155,000 1 $161,975 I $170,236 1 5179,088 I $167,328_1
Description
This category consists of a fee paid to the county-Wide Tax Appraisal
District.
Assumptioas
1. Service levels will be held constant.
2. No new committed costs will be incurred.
3. Expenditure increases will be equivalent to contemporaneous increases
Consumer services Price t Indexllae/Fart Worth 5MSA, as
in the cost of goods Regional and
recorded in the
Comptrollers projections ofr Rethe venue11Estimati Estimating prove
4. the Consumer State Price
accurate.
Methods
To forecast this expenditure category, multipliers derived from CPI
projections were applied annually.
i
- CITY OF DENTON 75
J
/ I
LONG RANGE FINANCIAL FUAECAST
EXPENDITURE SUMMARY
EXPENDITURE
1
+
I CATEGORY MISCELLANEOUS EXPENSES -FINANCIAL AUDIT
I PROJECTED
EXPENDITURE 1985-86 ( 1986-87 I 1987-88 1 1988-89 I 1989-90
$40,000 I $41,800 I $43,932 1 546,216 I $48,342 f
Description
This category consists of fees paid for the yea 1T financial audit lad
related studies.
r.r
Assumptions
1, Service levels will be held constant.
2. No new committed costs will be incurred.
3. Expenditure increases will be equivalent to contemporaaeous increases
in the cost of goods and services in the Dallas/Fort Worth SMSA, as
recorded in the Regional Conaumer Price Index.
4. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Office of Revenue Estimating will prove
accurate.
i
Methods
To forecast this expenditure, multipliers derived from CPI projections .w
were applied annually.
rl !
f
1
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i
76 CITY OF DENTON
M
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f
h`
I
k LONG RANGE FINANCIAL FORECAST
EXPENDITURE SUlRkRY
I
I 1
CATEGORY MISCELLANEOUS EXPENSES - BAD DEBT
PROJECTED
4 EXPENDITURE I 1985-86 1 1986-87 1 1987-88 I 1988-89 I 1989-90
1 $1500000 1$1569750 1 $1641744 I $173,311 1 $181,283 _I
Descri tion
This category consists of had debt and other miscellaneous expense,
Assumptions
f 1. Service levels will be held constant.
2. No new committed costs will be incurred.
3. Expenditure increases will be equivalent to contemporaneous increases
in the cost of goods and services in the Dallas/Fort Worth SMSA, as
recorded in the Regional Consumer Price Index.
4, Consumer
will prove
State rComptrolleprojections
Office ofr Rethe venuelLEstimati Estimating M
the
accurate.
h Methods
To forecast this expenditure category, multipliers derived from CPI
projections were applied annually.
1
a
- - CITY OF DENTON 77
I
--------rte
LONG RANGE FINANCIAL FORECAST
EXPENDITURE SUMMARY
EXPENDITURE
I
CATEGORY MISCELLANEOUS EXPENSES - UNEMPLOYMENT INSURANCE
I EXPENDITURE 1985-86 I 1986-87 I 1907-88 I 1988-89
I 1984-90 I -
I__ I $40,000 I $41,800 I _$431932 I 3460216 J $48,342
I
Description
This expense is the amount paid by the City for Unemployment Insurance. F,
Assumptions +
1. Service levels will be held constant,
2. No new committed costa will be incurred.
3, Expenditure incresses will be equivalent to contemporaneous increases
in the cost of goods and serv!%;es in the Dallas/Fort Worth SMSA, as
recorded in the Regional Consumer :rice Index,
4. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Office of Revenue Estimating will prove
accurate,
Methods
To forecast this expenditure category, multipliers derived from CPI
projections were applied annually.
r .i
f
78 CITY OF OENTON
fLONG RANGE FINANCIAL FORECAST
EXPENDITURE SU1IMARY
EXPENDITURE
CATEGORY MISCELLANEOUS EXPENSES - LIABILITY INSURANCE _
EXPENDITURE 1985-86 1986-87 1987-88 I 1988-89 1989-90
I
$2200000 I $2290906 I $2410625 I $2540189 I $2650885
Description
This expense is the amount paid by the City for Liability Insurance.
Assumptions
1. Service levels will be held constant.
2. No new committed costs will be incurred.
3. Expenditure increases will be equivalent to contemporaneous increases
in the cost of goods and services in the Dallas/Fort Worth SMSA, as
recorded in the Regional Consumer Price Index.
4. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Office of Revenue Estimating will prove
accurate.
Methods
To forecast this expenditure category, multipliers derived from CPI
projections were applied annually.
i
CITY OF DENTON 79
LONG RANGE FINANCIAL FORECAST
r
EXPENDITURE SUi9MARY
I T
1 CATEGORY MISCELLANEOUS EXPENSES - DISABILITY INSURANCE 1
PROJECTED
I EXPENDITURE I 1984-85 1 1985-8 1986-87 1 1987-88 1 1988-89 -F I 1
1 I I.,
I 570,000 1 $73L150 1 $76,881 1 $80,878 1 $841599
Description
This expense is the amount paid by the City for Disability Insurance.
Ass I tioas
.R
1, Service levels will be held constant.
2. No new committed coats will b9 incurred,
3, Expenditure increases will be equivalent to contemporaneous increases
in the coat of goods and services in the Dallas/Fort Worth SMSA, as
recorded in the Regional Consumer Price Index.
4. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Office of Revenue Estimating will prove
accurate,
E
Methods
To forecast this expenditure category, multipliers derived ftom CPI
projections were applied annually,
R 1
r:.
80 - = CITY OF DENTON
M
f
LONG RANGE FINANCIAL FORECAST
W EXPENDITURE SUMMARY
I CATEGORY EXPENDITURE
MISCELLANEOUS EXPENSES - TRANSFERS OUT I
I PROJECTED
II EXPENDITURE 1 1985-86 I 1986-87 1 1987-88 I 1988-89 I 1989-90 II
I $178,202 $186,221 J1950718 $205,896 $215,367 I
Deacriptiou
This expense item consists of contributions to the t'•eneral Project Fund
for planned capital projects.
Assumptions
I.
1. The level of service shall remain constant for the next five (5)
years and only inflationary adjustments will have to be made.
2. CPI projections for the Dallas/Fort North SMSA by the State
Controller's Office of Revenue Estimating will prove accurate.
Methods
i
To forecast this expenditure category, multipliers derived from CPI
j projections were applied annually.
I
{j
* $325,615 of the 1984-85 transfer will be funded from prior year
retainage, making this year's net transfer from operating funds
equivalent to $177,000.
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a
CITY OF DENTON 81
J
I
i
LONG RANGE FINANCIAL FORECAST
EXPENDITURE SUMMARY
I GAY ~
CATEGORY MISCELLANEOUS EXPENSES - SALARY ADJUSTMENTS I
PROJECTED
EXPENDITURE 1985-86 I 1986-87 _ 1987-88 I _1988-89 } 1989-90 _I
6625,000 $653,125 I $686,494 I 5722,129 I 37551347 I F1
Description
Mtl
This expense consists of the coat of proposed increases in employee wages
and benefits.
k{
Assvnptions 11
1. The proposed increase will be adopted.
2. Service levels will be held constant.
3. The current incremental addition to wages and benefits will be
increased throughout the projection period at a rate equivalent to
contemporaneous increases in the cost of goods and services in the
Dallas/Fort Worth SMSA, as recorded in the Regional Consumer Price
Index.
4. Consumer Price Index projections for the Dallas/Fort Worth SMSA by
the State Comptroller's Office of Revenue Estimating will prove
accurate.
Methods
To forecast this item, multipliers derived from CPI projections were
applied annually.
82 CITY OF DEN1ON
f
i
LONG RANGE FINANCIAL FORECAST
EXPENDITURE SUIOMY
EXPENDITURE
CATEGORY MISCELLANEOUS EXPENSES - CONTINGENCY RESERVE I
EXPENDITURE I 1985-86 I 1986-87 I 1987-88 I 1988-89 I 1989-90 _
h I I $50,000 I $50,000 I $50,000 I $50,000_ I $50,000 I
Description
This expense item consists of revenues set aside to provide for unexpected
expenditures,
N
Assumptions
1. Priposed expenditure levels will be appropriated.
2. The above amount will be sufficient to cover unplanned expenses
during the projection period.
Methods
The proposed funding level for the item in Fiscal Year 1985-86 was carried
forward throughout the forecast.
Ir
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3
CITY OF DENTON 83
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OF
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