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Home My WebLink About2025-024 Budget-In-BriefJanuary 24, 2025 Report No. 2025-024 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Budget In Brief Document EXECUTIVE SUMMARY: To complement the existing Annual Program of Services, staff has produced a “Budget-in-Brief” document which summarizes the budget and highlights its main points. DISCUSSION: The Government Finance Officers Association (GFOA) recommends producing a budget-in-brief document as a best practice. The budget document is very important, since it identifies the services to be provided, funding sources, and the rationale behind key decisions. Due to the time required to read and understand the entire budget document, a concise summary that captures these elements is helpful to readers. The budget-in-brief document is an additional tool to help promote enhanced financial transparency. The Budget-in-Brief is available on the Finance page of the City’s website. https://www.cityofdenton.com/402/Finance ATTACHMENTS: 1. Fiscal Year 2024-25 Budget-In-Brief STAFF CONTACT: Jessica Williams Chief Financial Officer jessica.jwilliams@cityofdenton.com (940) 349-8244 REQUESTOR: Staff Initiated STAFF TIME TO COMPLETE REPORT: 30 Minutes Denton,TEXAS Inclusion | Collaboration | Quality Service | Strategic Focus | Fiscal Responsibility city of BUDGET IN BRIEF FY 2024-25 Page: 3Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief City of Denton, Texas FY 2024-25 Budget in Brief City Leadership.......................................................................................................................... City Manager’s Message........................................................................................................... City Finance............................................................................................................................... Budget Overview....................................................................................................................... Budget Highlights...................................................................................................................... Operating Funds........................................................................................................................ General Fund............................................................................................................................. Water / Waste Water................................................................................................................. Solid Waste................................................................................................................................ Electric....................................................................................................................................... Grants........................................................................................................................................ 4 5 6 8 12 14 18 22 26 28 30 Page: 4 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief The City of Denton has a Mayor and six-member Council elected in non-partisan elections. Their terms of service are for two years. Gerard Hudspeth Mayor Brian Beck District 2 Joe Holland District 4 Paul Meltzer District 3 Vicki Byrd District 1 Brandon Chase McGee at large, District 5 sara hensley city Manager Jill Jester At Large, District 6 CITY OF DENTON FISCAL YEAR 2024-25 City Leadership Page: 5Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief It is my pleasure to present to you this Budget in Brief document, which offers a condensed summary of the FY 2024-25 Adopted Annual Program of Services (Budget), as adopted by the City Council on September 17, 2024. This budget was prepared with a focus on the City’s adopted strategic goals: inclusion, collaboration, quality service, strategic focus, and fiscal responsibility. The City’s annual budget process begins in February and ends in September with the adoption of the budget by the City Council. The process includes opportunities for City Council and public involvement through public meetings and workshops. The adopted budget includes a tax rate of $0.585420 per $100 of valuation, an increase over the previous year attributed to the voter-approved 2023 Bond Program. The adopted budget was developed to meet the City Council’s strategic goals and the needs of our growing community. The City of Denton continues to experience population growth, creating opportunities and challenges. I am committed to strategically and responsibly planning for future generations while simultaneously making strides in necessary infrastructure replacement and enhancements. The adopted FY 2024-25 budget continues to emphasize resources for public safety to support a healthy and safe community. The City continues to see a competitive labor market and inflationary pressure on operating expenses including contract pricing increases, as reflected in the adopted budget. The adopted FY 2024-25 budget was developed within the context of a five-year financial plan and the long-term infrastructure needs of the community. This approach aims to provide a long-term and financially sustainable perspective for decisions in the coming fiscal years. The FY 2024-25 budget for all funds is $2.35 billion and includes 1,982 full-time equivalent (FTE) positions. This document is prepared to provide a simplified view of the City’s adopted budget. The full budget, the City’s financial transparency program and the City’s audited financial statements may be found on the City’s website. I sincerely thank the members of the Denton City Council for their hard work and dedication to the residents of Denton. With your support, and the dedication of our capable staff, we will ensure that quality services are provided to the City. Sincerely, Sara Hensley City Manager CITY OF DENTON FISCAL YEAR 2024-25 City Manager’s Message Page: 6 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief The City’s Finance Department consists of the following divisions: Finance, Accounting, Treasury, Grants and Other Funding Sources, Enterprise Resource Management, Procurement and Budget. The Department works year-round to manage all financial transactions of the City. Notably, the Department publishes the City’s audited financial statements in the form of the Annual Comprehensive Financial Report and the City’s Budget. The Department also manages the City’s annual budget cycle, producing the Annual Program of Services and the City’s Capital Improvement Program. The City has received national recognition for both its Annual Comprehensive Financial Report and its Adopted Budget from the Government Finance Officers Association of the United States and Canada. The Department manages the City’s financial transparency program and participates in the State of Texas Comptroller’s Financial Transparency Stars Program. Annually the program evaluates whether the City has published data in a manner consistent with the requirements. Additional information on the program may be found here. The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to the City of Denton, Texas for its annual budget for the fiscal year beginning October 1, 2023. This award highlights the City’s commitment to fiscal responsibility and quality service. It is intended to be a guide for City spending and should be used as a policy document, as an operations guide, as a financial plan, and as a communications device. This Budget in Brief highlights portions of the City’s budget, however the document, in its entirety may be found here. CITY OF DENTON FISCAL YEAR 2024-25 City Finance Page: 7Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief The City’s budget process begins in February and completes with Budget Adoption in September. For the 2024-25 fiscal year, the City followed the schedule to the right. This schedule incorporates internal and external stakeholders and creates time and space for public feedback on all proposed budget items. Page: 8 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief The Adopted Budget serves as the legal framework that allows the City to levy and collect taxes. State law mandates that the City must adopt a budget and set a property tax rate annually, no later than September 30. Additionally, the City is required to adopt a balanced budget, which ensures that total operating revenues, combined with other funding sources, are equal to or exceed total expenditures. Operating Revenues +=Total Expenditures* Other Funding Sources The City’s total adopted budget for FY 2024-25, including the capital improvement program, totals $2.35 billion. $2.35B City funds: Revenues are collected by the City from property taxes, sales tax, user fees, fines and other sources. These revenues are then deposited into a series of funds. City funds are regulated based on the source of funding received. The City complies with all required accounting rules, regulations, statutes and funding restrictions. Major funds (governmental and business type): General Fund, Debt Service Fund, Electric Fund, Water Fund, Wastewater Fund, Solid Waste Fund, Airport Fund. Special revenue funds: Community Development Block Grant (CDBG), Catalyst, Sustainability Framework, Police Confiscation, Tourist and Convention, Street Improvement, Gas Well Revenues, Citizens’ Park Trusts, Roadway Impact Fees, Tax Increment Reinvestment Zones (TIRZs), Donations. Internal service funds: Technology Services, Materials Management, Fleet Services, Facilities Services, Risk Retention, Health Insurance, Engineering Services, Environmental Services, and Customer Service. *= to or greater than CITY OF DENTON FISCAL YEAR 2024-25 Budget Overview Page: 9Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief Property Taxes: Property Taxes in Texas are collected by counties, cities, and school districts. In Denton, property taxes are levied by the City and collected by the County on the City’s behalf. These taxes are calculated based on every $100 of appraised property value and are used to fund essential services such as police and fire departments, as well as to cover portions of general obligation and certificate of obligation debt. The property tax rate is designed to collect funding for maintenance and operations and for debt service payments, referred to as interest and sinking. Below you will see the City of Denton’s tax rate from 2019-2025. Fiscal Year Operations and Maintenance Interest and Sinking Total Rate/$100 Rate/$100 Tax Rate % Change 2019-20 $0.385360 $0.205090 $0.590450 -4.84% 2020-21 0.380360 0.210090 0.590450 0.00% 2021-22 0.350440 0.215370 0.565810 -4.17% 2022-23 0.356432 0.204250 0.560682 -0.91% 2023-24 0.354780 0.205902 0.560682 0.00% 2024-25 0.334780 0.250640 0.585420 4.41% In Texas, municipal tax rates are made up of two parts. The Operations and Maintenance portion of the rate and the I&S portion of the rate. The Operations and Maintenance portion of the rate is designed to provide for the general operations of the City. The I&S portion of the rate is designed to provide for the City’s payment for tax supported debt during the year. Page: 10 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief Municipal Debt Obligations - Principal and Interest Tax Supported Revenue Supported Total $676,438,136 $1,699,507,772 $2,375,945,908 Capital Improvement Program: The Capital Improvement Program (CIP) represents the City’s plan for infrastructure and equipment funding. The CIP is reviewed each year to reflect changing priorities, as well as to assess the impact of capital projects on operating budgets and for project scheduling and coordination. The CIP adopted budget appropriates all available programmed funds and planned issuances of new General Obligation Bonds (GOs) and Certificates of Obligation (COs). Total existing appropriated funds in the amount of $661.21 million include unspent bond proceeds, internal revenue transfers and outside contributions which may be encumbered but not yet expended. Proposed planned new funding for FY 2024-25 is $494.90 million, which includes cost participation. Debt service payments are budgeted for both the actual expense and the appropriation needed to accommodate the transfer of the funds, for payment, between funds. The City’s total annual debt service payment is $160,797,856. This payment covers both principal and interest. More information on the City’s debt may be found on the City’s website and in the City’s Annual Comprehensive Financial Report. CITY OF DENTON FISCAL YEAR 2024-25 Budget Overview Page: 11Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief When reviewing capital projects, the Finance Department reviews options, determines timing of sales and completes ongoing forecasting in alignment with the City’s debt and investment policies. The issuance of debt for the City is in compliance with all state, federal and regulatory requirements. More detail on the Capital Improvement Program may be found at the City’s website, www.cityofdenton.com. Division Existing External Revenue Impact Fee General Certificates Revenue New FY 2024-25 Funding Funding Funding Funding Obligation of Obligation Bonds Funding Total General $345,841 $5,000 $7,064 $3,675 $74,103 $91,166 -$180,918 $526,759Government Electric 143,109 -45 --74,978 -75,023 218,132 Water 68,838 -431 --58,897 71,099 130,426 199,265 Wastewater 70,751 - 1,226 - - 71,673 27,576 100,475 171,227 Solid Waste 31,890 - 1,870 - - 11,126 - 12,996 44,885 Airport 1,900 855 95 - - - - 950 2,850 TOTAL $662,329 $5,855 $10,731 $3,675 $74,013 $307,840 $98,675 $500,788 $1,163,117 Municipal Bond Types Capital Improvement Program: The funding for the capital improvement program comes from several sources. In the table below, these sources and the totals for the year are listed in ‘$000. As one of the 2,000 community-owned and not-for-profit public power utilities in the country, DME provides service to 56,395 residential and commercial customers with Annual System Energy Sales of 1,469,144 Megawatt Hours (MWH).- City of Denton website 12.9.24 • Existing Funding: The amount of existing funding set aside for a specific and particular purpose in projects which may be encumbered, but not yet expended. • External Funding: Funding received from outside agencies. • Revenue Funding: City funding available for projects. • Impact Fee Funding: Funding collected to offset the impact of new development. • General Obligation: Voter Approved Bonds issued by the City. • Certificates of Obligation: Bonds issued by the City for infrastructure projects that are restricted but do not require voter approval. • Revenue Bonds: Bonds issued by the City for the utilities. These bonds are paid for with utility revenues. • Total New Funding: Total newly requested funding in the current year (External Funding to Revenue Bonds). • FY 2024-25 Total : Total new and existing funding. Page: 12 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief • A continued focus on Public Safety staffing • Pay adjustments for Police and Fire civil service employees • A 3% cost of living adjustment (COLA) and 2.50% average merit supplemental • General Fund funding enhancements of $5.11 million • Needed utility rate increases to address inflation and growth, after years of utility rate decreases This budget enables the City Council to continue advancing the City’s goals while addressing necessary adjustments driven by rising costs, growth, and inflation. It also allocates funding for public safety initiatives and voter-approved general obligation bonds. Key priorities for this budget include: History of City of Denton Municipal Rate Increases/Decreases Utility FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 Electric -3.50%----3.00%1.50% Water ---2.00%---3.00% Wastewater -5.00%----11.00%11.00% Solid Waste -12.00%-12.00%-5.00%---1.50% Budget Process Discussions: During the creation of this budget, the City completed multiple cost of service studies, revenue analytics, and five year forecasts. In discussions with the City Council, the Finance team laid out economic challenges and considerations that the team is tracking. As the economy continues to change, the City is seeing changes as well. Growth at record numbers drives expenses, as do pressures from inflation. Over the past several years, cities nationwide have benefited from federal programs that are now wrapping up, requiring discussion about what services will remain and which will change. The table on the right was shared with Council during these budget discussion. When viewed in conjuncture with the rate information table, the reader may see that while rates were decreasing, inflation was increasing. 21.01 % National Inflation June / June 2019-2024 Total Compounded Change: CITY OF DENTON FISCAL YEAR 2024-25 Budget Highlights * Inflation June 19 to June 24 , as of year end, total compounded inflation is closer to 23.40% (bls.gov/data/inflation) Page: 13Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief Population growth: • FY 2024/25 - 2.94% increase from previous year • FY 2025/26 - 2.85% estimated growth Sales Tax: • FY 2024/25 - Estimated 5.26% over collection estimate for FY 2023/24 • FY 2025/26 - 7.06% average growth Assessed Values: • FY 2024/25 - Total Certified Appraised Value is $21.2 Billion. • 10.16% increase over the prior tax year. • FY 2025/26 and future - Assumes a reduced M&O tax rate to correspond with AV increases. • 99.5% collection rate • Total tax rate of $0.585420 / $100 valuation Other highlights include: Due to the health of the City’s Employee Benefit Fund, the City was able to absorb a 10% increase in health insurance premiums rather than passing this cost on to employees. A decrease of $0.02 cents to the operations and maintenance portion of the tax rate. This allows for a smaller increase in the overall tax rate due to the passage of the voter approved 2023 Bond Package. The 2023 Voter Approved Bond Program Projects are listed below, in thousands. Financial Assumptions: During the creation of this budget process, the following assumptions were made. Page: 14 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief REVENUE - ALL FUNDS The City’s total budget is $2.35B. This includes all operating and capital costs for this fiscal year. The budget should be reviewed both in totality and in relationship to the differences between operating and capital cost. This breakdown of the budget shows the Operating Revenues and the Operating Expenses. These are the funds needed to complete day to day operations like paying police officers and fire fighters, and providing water and electric services. The chart below shows the breakdown of the City’s revenue and resources by category. Revenues are generated annually and brought into the City through the property tax levy, sales taxes, fees, permitting and other activities. Resources are existing funding being used to fund current year expenses, such as fund balance. Resources are also transfered from one fund to another. For example, all of the City’s funds benefit from the services provided by the General Fund, so each fund transferring funding into the General Fund to account for services like payroll processing, human resources and accounts payable. This resource, transfers from other funds, accounts for 20.9% of the City’s total revenue and resource budget. The City’s largest revenue source is operating revenues generated by its Utilities, accounting for 48.4% of all revenue and resources. As a full-service city, Denton provides Water/Wastewater, Solid Waste, Drainage, and Electric services. The second-largest revenue source is Ad Valorem (property) taxes, which contribute 11% of the total City revenues and resources for the 2024-25 fiscal year. CITY OF DENTON FISCAL YEAR 2024-25 Operating Funds FY 2024-25 Adopted Operating Revenue and Resources Page: 15Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief FY 2023-24 FY 2024-25 Variance Adopted Adopted % Change Ad Valorem (Property) Taxes $106,163,128 $120,972,352 $14,809,224 13.95% Sales Tax 57,545,000 60,841,793 3,296,793 5.73% Franchise Agreements 23,007,690 25,444,537 2,436,847 10.59% Other Taxes & Fees 4,414,554 5,881,064 1,466,510 33.22% Service Fees 14,279,745 17,724,103 3,444,358 24.12% Fines and Fees 6,393,586 6,106,531 (287,055)-4.49% Licenses and Permits 8,184,673 6,990,806 (1,193,867)-14.59% Return on Investment 15,732,014 20,909,106 5,177,092 32.91% Utilities Operating 432,704,564 533,047,504 100,342,940 23.19% Miscellaneous 58,204,219 86,759,050 28,554,831 49.06% Subtotal Revenues 726,629,173 884,676,846 158,047,673 21.75% Transfers from Other Funds 177,955,969 215,887,716 37,931,747 21.32% TOTAL OPERATING REVENUES $904,585,142 $1,100,564,562 $195,979,420 21.67% City-wide Operating Budget Changes: • Property Taxes increased $14,809,224 or 13.95%, primarily due to an increase in property valuations and the passage of the voter approved 2023 Bond Program. • Sales Tax increased $3,296,793 or 5.73% primarily due to increases in spending and community events. • Franchise Agreements increased $2,436,847 or 10.59%, primarily due to increases in utility rates. • Other Taxes & Fees increased $1,466,510 or 33.22%, primarily due to creation of the TDIP fee and associated board. • Service Fees increased $3,444,358 or 24.12%, primarily due to the creation of two new municipal utility districts and the Public Finance Housing Corporation. • Fines and Fees decreased -287,055 or -4.49%, primarily due to redistribution of the budgets for the Park Development Trust and Land Dedication Trust. • Licenses and permits decreased -$1,193,867 or -14.59%. primarily due to decreases in building permits during the prior year. • Return on investment (ROI) increased $5,177,092 or 32.91% primarily due to increases in investment returns and utility rates. The Utilities transfer to the General Fund an ROI based upon three and one- half percent (3.5%) of utility revenues, not to exceed six percent (6.00%). • Utilities Operating revenues increased due to implementation of rate changes in DME, increases in the sale of energy and data centers. • Miscellaneous revenues increased due to increases in the internal service funds, inter-local agreements and grant revenue received, such as revenues received for the SAFER grants. Page: 16 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief EXPENDITURES - ALL FUNDS As mentioned, the City’s total budget is $2.35B. This includes all operating and capital costs for this fiscal year. The City’s total operating expenditures total $1.087B. This is an increase of $154,523,924 or 16.56% over the prior year. These costs pay for operations like paying police officers and fire fighters, and providing water and electric services. As shown here, the largest annual expenditure the City pays is for personnel services. Personnel services include the cost of salaries, special pay, overtime, healthcare and taxes for all City employees. This includes full-time, part-time and seasonal part-time employees. As shown here, the City’s second and third largest expenses go to paying for purchase power and for municipal debt. Purchase power is the cost of power Denton Municipal Electric buys from the ERCOT market to provide power to residents. The City’s capital program is primarily debt funded and is included in the total adopted budget. This program totals over $1B in the current fiscal year. The cost listed here is the annual amount of debt service (payment) the City makes on existing debt. That is debt that has already been issued to fund projects in past years. This includes voter approved general obligation bond programs and revenue bonds issued in the aftermath of winter storm Uri. Municipalities throughout the nation utilize debt issuances for large infrastructure projects and in the case of emergencies, for more detail see page 10. CITY OF DENTON FISCAL YEAR 2024-25 Operating Funds FY 2024-25 Adopted Operating Expendi- Page: 17Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief FY 2023-24 FY 2024-25 Variance Adopted Adopted FY 2024-25 less FY 2023-24 % Change Personnel Services $232,475,191 $256,304,776 $23,829,585 10.25% Purchased Power 143,552,502 211,488,976 67,936,474 47.33% Material and Supplies 20,843,722 26,020,488 5,176,766 24.84% Maintenance and Repair 18,003,093 18,323,955 320,862 1.78% Insurance 48,073,646 54,720,867 6,647,221 13.83% Miscellaneous 8,361,617 7,343,437 (1,018,180)-12.18% Operations 80,151,123 86,590,215 6,439,092 8.03% Fixed Assets 757,967 1,890,620 1,132,653 149.43% Return on Investment 15,732,014 24,232,738 8,500,724 54.03% Franchise Fees 17,849,430 21,584,537 3,735,107 20.93% Debt Service 198,694,938 242,649,269 43,954,331 22.12% Inventory Purchases 12,600,000 14,600,000 2,000,000 15.87% Capital Outlay 58,806,147 35,005,307 (23,800,840)-40.47% Transfers from Other Funds 77,066,630 86,736,758 9,670,128 12.55% TOTAL OPERATING EXPENDITURES $ 932,968,019 $1,087,491,943 $154,523,924 16.56% City-wide Operating Budget Changes: • Personnel services increased $23,829,585 or 10.25%, due to increases in civil service salaries in alignment with Meet and Confer agreements. Implementation of a 3.00% cost of living adjustment and a possible 2.50% merit increase. Increases in health care costs covered by the City and increased personnel city-wide. • Purchased power increased $67,936,474 or 47.33% due primarily to increases in electric sales, data centers and growth in the community. • Materials and supplies increased $5,176,766 or 24.84% due primarily to increased cost of good. • Maintenance and repair costs held steady, while insurance costs increased for City buildings and risk insurance. • Miscellaneous costs decreased -$1,018,180 or -12.18% due primarily to bringing convention and visitors bureau activity in house. • Operations costs increased $6,439,092 or 8.03% primarily due to the addition of the K-9 program, incentive payments, contract changes and vehicle maintenance. • Fixed asset costs are determined by depreciated calculated at year end. This is the total depreciation for all city fixed assets. • Returns on investments and franchise fees increased due to increases in investment returns and increased utility rates. • Debt Service payments, the payments the city makes annually on its outstanding debt, increased $43,954,331 or 22.12% due to increases in debt service requirements and issuance for the 2023 Bond Program. This line includes actual expense and all related transfers between funds, as discussed on page 10. • Inventory purchases increased $2,000,000 or 15.87% to allow for receipt of generators for the electric system, while capital outlay decreased -$23,800,840 or -40.47% due to movement of water and wastewater impact fees to a separate fund. Page: 18 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief REVENUE - GENERAL FUND The City’s General Fund adopted budget for FY 2024-25 totals $207,579,152. This is $18,509,588 higher than the prior year. The General Fund provides services to the public. These services include fire protection, police protection, parks services, general administrative services, library services, permitting, planning and development services. The largest sources of revenue in this fund are Property and Sales Taxes. Estimated increase: 5.73% over prior year budget Revenue Collection: FY 2022-23 Actual: $55.9 M FY 2023-24 Budget: $57.54 M FY 2024-25: $60.84 M Estimated increase: 6.04% over prior year budget Revenue Collection: FY 2022-23 Actual: $57.07 M FY 2023-24 Budget: $64.51 M FY 2024-25: $68.43 M CITY OF DENTON FISCAL YEAR 2024-25 General Fund Page: 19Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief FY 2023-24 FY 2024-25 Variance % Change Adopted Adopted Property Taxes $64,966,348 $68,879,918 $3,913,570 6.02% Sales Tax 57,545,000 60,841,793 3,296,793 5.73% Franchise Agreements 4,644,220 9,144,537 4,500,317 96.90% Other Taxes 456,554 608,330 151,776 33.24% Service Fees 12,009,745 12,097,103 87,358 0.73% Fines and Fees 1,893,586 2,106,531 212,945 11.25% Licenses and Permits 7,934,673 6,415,806 (1,518,867)-19.14% Return on Investment 15,732,014 20,909,106 5,177,092 32.91% Miscellaneous 6,900,114 5,865,977 (1,034,137)-14.99% Transfers from other funds 16,987,310 20,710,051 3,722,741 21.91% TOTAL REVENUES $189,069,564 $207,579,152 $18,509,588 9.79% General Fund Highlights: • 3% cost of living adjustment • Possible 2.5% Merit Increase • Operations and Maintenance tax rate reduced $0.02/ $100 AV • Total Tax Rate = 0.585420 • Focus on public safety and continuation of employer of choice Page: 20 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief FY 2023-24 FY 2024-25 Variance % Change Adopted Adopted Personnel Services $ 128,113,196 $140,013,012 $11,899,816 9.29% Materials & Supplies 4,385,794 5,181,511 795,717 18.14% Maintenance & Repair 2,347,304 2,333,586 (13,718)-0.58% Insurance 4,122,531 4,521,766 399,235 9.68% Miscellaneous 3,113,469 3,751,929 638,460 20.51% Operations 22,121,361 23,243,971 1,122,610 5.07% Fixed Assets 601,967 704,483 102,516 17.03% Other Expenses - 3,323,632 3,323,632 100.00% Capital Outlay 2,338,626 1,573,142 (765,484)-32.73% Transfers 21,925,317 22,932,320 1,007,003 4.59% Total Expenditures $189,069,565 $207,579,352 $18,509,787 9.79% EXPENDITURES- GENERAL FUND The City’s General Fund adopted budget for FY 2024-25 totals $207,579,152. This is $18,509,588 higher than the prior year. The General Fund provides services to the public. These services include fire protection, police protection, parks services, general administrative services, library services, permitting, planning and development services. The City of Denton strives to be an employer of choice. This year, the City was able to further that mission by providing 3.0% cost of living increases and possible 2.5% merit increases. In the General Fund, the City also maintained its commitment to police and fire civil service personnel in alignment with their Meet and Confer Agreements. This budget also contains expenditures in personnel to continue working toward pay equity. The City was able to absorb the cost of all health care increases without passing additional cost on to employees. • Materials and Supplies cost increased $795,717, primarily due to increases in the cost of uniforms, equipment, medical supplies and chemicals. • Insurance cost increased $399,235 or 9.68%, primarily due to inflation and claims cost. • Miscellaneous cost increased $638,460 or 20.51%, primarily due to community services initiatives. • Operations costs increased $1,112,610 or 5.07%, primarily due to addition of the K-9 program, utilities, mowing and vehicle maintenance. • Fixed asset costs are calculated at year end and account for the increase in asset depreciation. While this is shows as a budgeted expense, it is often better reflected in post year end projections. • Transfer out to other funds have increase $1,007,003 or 4.59%, primarily due to increased internal services costs. CITY OF DENTON FISCAL YEAR 2024-25 General Fund Page: 21Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief General Fund Reserve Requirements: The City of Denton maintains a General Fund reserve balance for unanticipated expenditures, unforeseen revenue fluctuations, or other adverse circumstances. To ensure that resources are available for these types of issues, the City of Denton targets a fund balance equivalent to 20 to 25% of budgeted expenditures, which includes a resiliency reserve up to 5%. The resiliency reserve will only be utilized in cases of economic distress. As such, the purpose of the resiliency reserve is to minimize budget and service fluctuations due to economic conditions. The estimated ending reserve balance of $44,472,882 at the end of FY 2024 represents approximately 23.66% of estimated expenditures and is within the targeted goal of 20 to 25%. The chart below provides a listing of the ending fund balances for the past two years, an estimated balance for the fiscal year ending September 30, 2024, and the projected balance for the fiscal year ending September 30, 2025. Fund Balance Reserve As of Estimated Projected Adopted Adopted FY 2025-26 Ending Balance $44,749,871 $44,472,882 $44,472,882 % of Expenditures 25.67%23.66%21.42% Target %20%-25%20%-25%20%-25% Cost of General Fund City Services: The total cost of General Fund services for a property owner who’s home’s assessed valuation is $100,000 is $585.42 per year, or $48.79 per month. The below chart outlines where property taxes in this scenario go. Page: 22 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief WATER FUND REVENUE The FY 2025 Water Fund budget includes $55,635,824 in revenues, $55,635,824 in expenditures, and no use of reserves. The Water Utility ensures customers have access to a reliable supply of high-quality drinking water by adhering to all federal and state regulations related to water treatment, distribution, and metering. In addition to water delivery, the fund oversees the development of water system capital improvement plans, coordinates development projects, and serves as a liaison with local, state, and federal regulatory authorities. The City of Denton holds water rights at Lake Lewisville and Lake Ray Roberts. These sources of water are treated and provided by the Water Fund. The decline in revenue seen above is due to a change in the way the City budgets water and wastewater impact fees. Impact fees are fees paid by developers due to their “impacts” on existing infrastructure. The water and wastewater funds maintain separate impact fee funds and development plan line reserves. The planned use of these fees are illustrated in the capital improvement program. The FY 2025 budget contemplates the following rate assumptions. • An increased rate change of 3.00% for residential and commercial customers in FY 2025. This is the first rate increase since FY 2018. There was a rate decrease in FY 2021. • The Water Impact Fee Study is currently pending. The results will be incorporated into future budgets. Personnel Changes The positions in FY 2025 increased by seven net positions. This change reflects nine new positions and two positions moving to another fund. FY 2023-24 FY 2024-25 Variance % Change Adopted Adopted Residential Water Sales $23,839,938 $23,684,799 ($155,139)-0.65% Commercial Water Sales 19,858,347 23,472,151 3,613,804 18.20% Resale - Raw Water 2,164,644 1,688,223 (476,421)-22.01% Resale - Treated Water 541,654 665,946 124,292 22.95% Non-rate Revenues 16,450,861 4,897,741 (11,553,120)-70.23% Interest Income 300,000 1,226,964 926,964 308.99% Total Revenue $63,155,444 $55,635,824 ($7,519,620)-11.91% CITY OF DENTON FISCAL YEAR 2024-25 Water/Wastewater Page: 23Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief Utility Reserve Levels: The Utility Departments and the Public Utilities Board have developed financial strategies and objectives to maintain financial stability and resiliency. One objective is to achieve and maintain reserve balances that provide adequate working capital and operating reserve levels. These reserve targets are based primarily on the Government Finance Officers Association’s (GFOA) best practices for enterprise funds. In general, “Reserves” are divided into two components: working capital and operating reserves. Working capital provides a minimum unrestricted fund balance to provide the liquidity needed to allow regular management of payables and payment cycles. The working capital target for each utility is 30 days (8%) of average budgeted expenditures. The operating reserve funds provide a means of managing expense and demand volatility, ensuring that funding is available for emergencies such as equipment or infrastructure failure, and serving to improve overall resiliency. Water Fund Actual Percentage 77.9% FY 2025 Target 25-42% Equivalent Days of Operating Expenses 90-150 WATER FUND EXPENSES FY 2023-24 FY 2024-25 Variance % Change Adopted Adopted Purchased Power $1,481,328 $1,481,328 - 0.00% Purchase of Water 3,000 3,000 - 0.00% Personnel Services 11,458,321 13,144,979 1,686,658 14.72% O&M 7,794,903 11,137,793 3,342,890 42.89% Materials and Supplies 2,040,004 4,676,464 2,636,460 129.24% Maintenance and Repair 2,066,512 2,250,512 184,000 8.90% Insurance 465,105 519,789 54,684 11.76% Administrative Cost 3,944,389 4,208,445 264,056 6.69% Miscellaneous Expense 107,865 107,865 - 0.00% Operations 3,218,282 3,686,028 467,746 14.53% Interest Expenses 5,000 5,000 - 0.00% Debt Service Transfers 11,849,983 14,571,614 2,721,631 22.97% Capital Transfers 13,722,000 430,562 (13,291,438)-96.86% Interfund Transfers 8,312,192 10,514,188 2,201,996 26.49% Fixed Assets 35,000 36,052 1,052 3.01% Total Expenses $66,503,884 $66,773,619 $269,735 0.41% Page: 24 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief WASTEWATER FUND REVENUE The FY 2025 Wastewater budget includes $45,411,976 in revenues, $45,662,165 in expenditures, and $250,189 in use of reserves to balance the budget. One of the primary functions of the wastewater Fund is to provide its customers with an environmentally responsible means of conveying, treating, and recycling wastewater. This is accomplished though compliance with all federal and state regulations governing the service include: administration, wastewater collection, water reclamation, effluent reuse program, composting operations, wastewater system capital planning, and storm water drainage. FY 2023-24 FY 2024-25 Variance % Change Adopted Adopted Interest Operating $399,514 $523,269 $123,755 30.98% Residential Wastewater 13,726,979 17,083,964 3,356,985 24.46% Commercial Wastewater 16,473,258 18,487,168 2,013,910 12.23% Effluent Irrigation 89,902 75,417 (14,485)-16.11% Wastewater Wholesale 1,212,248 862,521 (349,727)-28.85% Other Revenues 2,032,729 2,668,038 635,309 31.25% Drainage Fees 4,960,002 5,072,777 112,775 2.27% Transfers In 634,561 638,822 4,261 0.67% Impact Fee Transfer 4,270,000 - (4,270,000)-100.00% Use of Reserves 1,531,066 250,189 (1,280,877)-83.66% Total Resources $45,330,259 $45,662,165 $331,906 0.73% Increases in wastewater revenues are predicated on increased rates and community-wide growth. The wastewater fund impact fees have moved in the same manner as the water impact fees. The funds FY 2024-25 initiatives include: • Construct Granada Lift Station Conversion to Gravity • Expand Pecan Creek Water Reclamation Plant Headworks and Capacity • Improve Cooper Creek Lift Station • Construct Robson Ranch Lift Station Conversion Phase 1 • Accelerate the Clear Creek Wastewater Solution CITY OF DENTON FISCAL YEAR 2024-25 Water/Wastewater Page: 25Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief Utility Reserve Levels: The reserve information listed in the water fund also apply to the wastewater fund. Wastewater Fund Actual Percentage 29.3% FY 2025 Target 20-31% Equivalent Days of Operating Expenses 75-110 WASTEWATER FUND EXPENSES FY 2023-24 FY 2024-25 Variance % Change Adopted Adopted Purchased Power $1,221,000 $1,221,000 - 0.00% Personnel Services 9,142,344 10,343,892 1,201,548 13.14% Materials and Supplies 1,349,117 2,014,500 665,383 49.32% Maintenance and Repair 2,655,672 2,914,872 259,200 9.76% Insurance 429,237 463,483 34,246 7.98% Other Expenses 26,248 26,098 (150)-0.57% Operations 2,408,183 2,310,264 (97,919)-4.07% Return on Investment 1,078,437 1,244,990 166,553 15.44% Franchise Fee 1,540,624 1,778,557 237,933 15.44% Debt Service 8,713,745 9,785,287 1,071,542 12.30% Cost of Service - General Fund 1,841,838 2,536,127 694,289 37.70% Cost of Service - Other 8,015,650 9,098,100 1,082,450 13.50% Capital Outlay 6,905,164 1,924,995 (4,980,169)-72.12% Total Expenditures $45,327,259 $45,662,165 $334,906 0.74% The FY 2025 budget contemplates the following rate assumptions. • An increased rate change of 11.00% for residential and commercial customers in FY 2025. This represents a consecutive rate increase since the prior decrease in FY 2019. • The Wastewater Impact Fee Study is currently pending. The results will be incorporated into future budgets. Page: 26 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief SOLID WASTE FUND REVENUE The FY 2025 Solid Waste and Recycling Fund Budget totals $43,519,287 in revenues and $43,519,287 in expense. This budget does not include the use of reserves. The Solid Waste Utility is responsible for resident and commercial customers with dependable, efficient, and cost-effective solid waste and recycling collection and disposal services to customers with sustainable, reliable, and competitive electric services. This is accomplished through compliance with all federal and state regulations governing the collection, disposal, and recycling of refuse, debris, yard waste, home chemicals, and large household items including electronics. This fund is also responsible for developing solid waste and recycling capital improvements, development coordination, and liaising with local, state, and federal regulatory authorities. The City of Denton owns and operates the City’s landfill in compliance with local, state, and federal regulations. FY 2023-24 FY 2024-25 Variance % Change Adopted Adopted Rate Revenues $33,984,882 $36,255,666 $2,270,784 6.68% Wholesale Agreements 4,033,433 5,296,940 1,263,507 31.33% Non-rate Revenues 1,277,588 1,966,681 689,093 53.94% Use of Reserves 2,074,934 (2,074,934)-100.00% Total Resources $41,370,837 $43,519,288 $2,148,451 5.19% Rates: The FY 2025 budget contemplates the following rate assumptions: • An increased base rate change of 1.5% for residential and commercial customers in FY 2025. This is first rate increase since FY 2018. The last rate was reduced annually from FY 2019 to FY 2021. • Solid Waste completed a cost-of-service study. The results included the 1.5% rate increase implemented in the FY 2025 budget. Personnel Changes: The positions in FY 2025 decreased by two positions, which moved to another fund. CITY OF DENTON FISCAL YEAR 2024-25 Solid Waste Page: 27Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief SOLID WASTE FUND EXPENDITURES FY 2023-24 FY 2024-25 Variance % Change Adopted Adopted Personnel Services $13,858,641 $14,333,760 $475,119 3.43% Materials & Supplies 734,267 688,667 (45,600)-6.21% Maintenance and Repair 238,516 239,516 1,000 0.42% Insurance 754,473 696,804 (57,669)-7.64% Miscellaneous Expense 39,820 43,320 3,500 8.79% Operations 7,287,341 7,785,415 498,074 6.83% Cost of Service Transfers 6,531,546 8,442,354 1,910,808 29.26% Fixed Assets 904,007 1,121,087 217,080 24.01% Vehicle Replacement 2,575,000 1,870,000 (705,000)-27.38% Revenue Funded Capital 1,000,000 - (1,000,000)-100.00% Closure/Post Closure 752,631 752,631 - 0.00% Debt Service 4,817,837 5,404,904 587,067 12.19% Franchise Fees 1,876,755 2,140,829 264,074 14.07% Total Expenditures $41,370,834 $43,519,287 $2,148,453 5.19% Page: 28 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief ELECTRIC FUND REVENUE The FY 2025 Denton Municipal Electric Fund Budget includes $392,485,775 in revenues, $393,997,690 in expenditures, and a use of reserves of $1,493,915. The Electric Utility is designed to provide customers with sustainable, reliable, and competitive electric services. This is accomplished through compliance with all federal and state regulations governing the creation, purchase, and distribution of energy to customers. This fund is also responsible for developing electric system capital improvements, coordination, and liaising with local, state, and federal regulatory authorities. The City of Denton provides energy services to residents from the Denton Energy Center, and manages the purchase and distribution of energy from the state. FY 2023-24 FY 2024-25 Variance % Change Adopted Adopted Base Rate Revenues $104,394,786 $124,913,472 $20,518,686 19.65% TCRF Revenue - 30,286,099 30,286,099 100.00% ECA Revenues 66,916,984 86,122,202 19,205,218 28.70% Non-rate Revenues 119,085,425 151,162,001 32,076,576 26.94% Use of Reserves 17,756,400 1,493,916 (16,262,484)-91.59% Total Resources $308,153,595 $393,977,690 $85,824,095 27.85% Rates: The FY 2025 budget contemplates the following rate assumptions. • An increased base rate change of 1.5% for residents and commercial customers in FY 2025. This is first base rate increase since FY 2018. The last base rate decreased in FY 2019. • The cost-of-service study results are pending final revisions. The results will be incorporated into future budgets. Personnel Changes: The positions in FY 2025 increased by one net positions. This change reflects nine new positions and eight existing positions moving to other funds. 4 positions are moving to the Customer Services Fund and 4 positions are moving to the General Fund. CITY OF DENTON FISCAL YEAR 2024-25 Electric Page: 29Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief ELECTRIC FUND EXPENDITURES FY 2023-24 FY 2024-25 Variance % Change Adopted Adopted Purchase Power $116,110,083 $181,498,875 $65,388,792 56.32% Transmission of Power 24,737,092 27,284,774 2,547,682 10.30% Personnel 26,090,466 27,343,676 1,253,210 4.80% O&M 23,969,028 24,592,404 623,376 2.60% Cost of Service Transfers 19,943,469 19,170,589 (772,880)-3.88% ROI & Franchise Fee 25,141,239 33,120,822 7,979,583 31.74% NON DEC Debt Service 47,185,218 49,860,621 2,675,403 5.67% DEC Debt 18,077,000 18,077,125 125 0.00% Revenue Funded Capital 6,900,000 2,064,079 (4,835,921)-70.09% 2024 Purchase Power Securitization - 8,221,772 8,221,772 100.00% Supplementals - 1,871,252 1,871,252 100.00% Baseline Adjustments - 871,702 871,702 100.00% Total Expenditures $308,153,595 $393,977,690 $85,824,095 27.85% Return on Investment (ROI) and Franchise Fees: The ROI for the Electric Fund was increased from 3.50% to 6.00% in FY 2022 and will remain at 6.00% for FY 2025. Major Capital Improvement Projects: The Electric Fund CIP budget includes funding for the following major capital projects in FY 2025: • Debt: $74.97 million • Revenue: $450k Including the improvements discussed above, the FY 2025-29 five-year capital improvement program is $385.55 million. The program is necessary to meet the expected growth in demand for electric services, improve the reliability of the electric system, replace aging infrastructure, and comply with new regulatory requirements. Page: 30 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief Grants play a vital role in enhancing the quality of life for our community by providing critical funding for programs and projects that directly benefit residents. These funds, sourced from federal, state, and local agencies, allow us to address pressing community needs without relying solely on city revenues. By leveraging grants, we are able to support initiatives that promote economic growth, strengthen public safety, improve infrastructure, and foster inclusivity across all neighborhoods. Grants are transformative tools that empower our city to drive meaningful change and growth. Recently, Denton Parks was awarded the NRPA’s Supporting Healthy Aging Through Parks and Recreation 4.0 (SHAPR 4.0) instructor training grant, a program that enhances recreational opportunities for our aging population. This grant not only provides vital resources for training but also reaffirms our commitment to inclusivity and the well-being of all residents. The City of Denton is also pursuing funding through the Transportation Alternatives (TA) Program with a resolution to submit an application for up to $10 million in grant support. This initiative focuses on enhancing pedestrian and bicycle infrastructure, promoting sustainable and safe transit options throughout the community. These grants exemplify how strategic funding partnerships can help us address current challenges while building a brighter, healthier future for our city. The impact of grants extends far beyond financial support. They enable innovation, collaboration, and strategic partnerships with local organizations, non-profits, and state and federal agencies. Through these partnerships, we can expand resources for vulnerable populations, create opportunities for growth, and build a more resilient community. Every grant secured represents an investment in the future of our city and underscores our commitment to strategic and fiscally responsible stewardship for the benefit of all citizens. The City Finance Department, through its Grants and Other Funding Sources Division, manages an active portfolio of over $105M in grant funding. This division works diligently to identify grant opportunities, manage grant applications and supports programs like the City’s application for loan funding from State and Federal sources. Page: 31Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief DESCRIPTION GRANT EXPIRATION Grant Available GRANT NAME YEAR DATE Amount Type Grant Award ʹͲͳͻǦʹͲ Ǧ ͻͻ͵ǡͳͺͺ ͸͹ǡͶͳ͸ ʹͲʹͲǦʹͳ Ǧ ͳǡͶͺͷǡͶͶͲ ͳͲǡͶͷ͵ ʹͲʹͳǦʹʹ Ǧ ͳǡͲ͵ͳǡͲ͵ʹ ͳͻͲǡͻͻ͸ ʹͲʹʹǦʹ͵ Ǧ ͻʹͷǡ͹ʹͷ ͳͲͲǡͲͲͲ ʹͲʹ͵ǦʹͶ Ǧ ͻ͸Ͷǡͷ͵ͳ Ͷͷ͹ǡͶͺ͹ ʹͲʹͶǦʹͷ Ǧ ͳǡͲͳͷǡͲͶ͹ ͳǡͲͳͷǡͲͶ͹Ǧ ͸ǡͶͳͶǡͻ͸͵̈́ͳǡͺͶͳǡ͵ͻͻ̈́ ʹͲʹͲǦʹͳ ͻȀͳȀʹͲʹͺ ͷͲͷǡ͵ͷͷ ͳʹͲǡ͸͵Ͷ ʹͲʹͳǦʹʹ ͻȀͳȀʹͲʹͻ Ͷͺ͹ǡͲ͹͸ ͳ͵ǡͶ͹ͺ ʹͲʹʹǦʹ͵ ͻȀͳȀʹͲ͵Ͳ ͷͲ͵ǡ͹ͻ͹ ʹ͸Ͳǡͺͳͷ ʹͲʹ͵ǦʹͶ ͻȀͳȀʹͲ͵ͳ ͷͳ͵ǡ͵ʹ͹ ͷͲͳǡ͸ʹ͹ ʹͲʹͶǦʹͷ ͻȀͳȀ͵Ͳ͵ʹ Ͷ͹ͳǡͻͻʹ Ͷ͹ͳǡͻͻʹǦȋȌʹͲʹͳ ʹͲʹͳǦʹʹ ͻȀ͵ͲȀʹͲ͵Ͳ ͳǡ͹͸͵ǡ͸ʹʹ ͳǡͷ͸Ͷǡͻ͸ͳǦͶǡʹͶͷǡͳ͸ͻ̈́ʹǡͻ͵͵ǡͷͲ͹̈́ TOTAL COMMUNITY DEVELOPMENT 10,660,132$ 4,774,906$ ʹͲʹ͵ʹͲʹ͵Ǧʹͷ ͻȀ͵ͲȀʹͲʹͷ ͶǡʹͲͲ ͶǡʹͲͲ ʹͲʹ͵ ʹͲʹʹǦʹ͵ ͻȀ͵ͲȀʹͲʹ͸ ͹ͳǡ͸ͳͷ ͹ͲǡͲͻͺ ʹͲʹʹ ʹͲʹͳǦʹͷ ͻȀ͵ͲȀʹͲʹͷ ͷ͵ǡͻͻͻ ͷ͵ǡͻͻͻ ʹͲʹͳ ʹͲʹͳǦʹͷ ͻȀ͵ͲȀʹͲʹͷ ͵͹͸ǡ͹ͺʹ ʹͺͺǡ͸Ͷ͹ ʹͲʹ͵Ǧʹͷ ͺȀͳ͵ȀʹͲʹͷ ͵Ͳǡͳ͵͸ ͵Ͳǡͳ͵͸ʹͲʹͲ Ƭȋ Ȍ ʹͲʹʹǦʹͷ ʹȀͳ͹ȀʹͲʹͷ ͻͺͻǡͳ͵͸ ͵ͲͻǡͶͶͶʹͲʹͳ Ƭȋ Ȍ ʹͲʹ͵Ǧʹ͸ ͷȀ͵ͳȀʹͲʹ͸ ͵ǡ͹͵ͳǡͺͻʹ ʹǡ͹ʹ͸ǡ͹͹ͶʹͲʹʹ Ƭȋ Ȍ ʹͲʹ͵Ǧʹ͸ ͷȀ͵ͳȀʹͲʹ͸ ʹǡͳ͹ͺǡͲͲͲ ʹǡͲͷʹǡͺͺͶƬȋȌ ʹͲʹͶǦʹͷ ͻȀ͵ͲȀʹͲʹͷ ͶͲͲǡͲͲͲ ȀͶͲͲǡͲͲͲ ǦʹͲʹͶǦʹͷ ͻȀ͵ͲȀʹͲʹͷ ʹͲͲǡͲͲͲ ʹͲͲǡͲͲͲ TOTAL PUBLIC SAFETY 8,035,760$ 6,136,182$ ʹͲʹͶǦʹͷ ͺȀ͵ͳȀʹͲʹͷ ͳͲͲǡͲͲͲͳͲͲǡͲͲͲ͵ͷ͵ͺͲ ʹͲͳͺ ͸ʹǡ͵ͺͺǡͶͷʹ͵ǡͲ͸͹ǡʹ͵ͳ͵ͷʹ ʹͲʹʹ ͶǡͲͲͲǡͲͲͲǦ͵ͷ͵͹͹ ʹͲͳͺ Ͷ͸ǡͳͷͳǡ͵ͷͳͻǡͷͳ͹ǡͷͺͳʹͲͳ͸ ͳȀͷȀʹͲʹ͹ ͳͺǡʹ͸͹ǡ͵Ͳ͵ͳǡͲʹͲǡͺͺͺ ʹͳͺͳǦ ʹͶͻͻ ʹͲͳͷ ͳȀʹ͸ȀʹͲʹ͸ ʹǡͶͲͲǡͲͲͲ͸͹ͷǡͻͻʹ ͳͺ͵ͲʹͲʹʹ ͳͲǡͲͲͲǡͲͲͲ͵ǡͷ͵͸ǡͲͶ͸ʹͲͳͷ ʹǡͲͲͲǡͲͲͲ͹͵ͳǡ͵͹ͺǦƬʹͲͳ͹ ͹͸ʹǡͷͲͺ͸͵ͷǡͻͶͺǦʹͲͳͺ Ͷ͵ͺǡͺʹͲ͵͸͵ǡ͵ͲͲǦ ƬʹͲͳͺ ͹͸ʹǡ͵ͳͳ͸ͷ͵ǡͻͳͳ ʹͲʹͳǦʹͷ ͸Ȁ͸ȀʹͲʹͷ ͵Ͷǡͳ͸ʹ ͵Ͷǡͳ͸ʹʹͲʹͶǦʹͷ ͳʹȀ͵ͳȀʹͲʹͷ ͷ͹͸ǡͲͲͲ ͷ͹͸ǡͲͲͲʹͲʹ͵Ǧʹ͸ ͳͲǡͻ͹ͳǡͻͲͶͳͲǡͻ͹ͳǡͻͲͶ ʹͲʹͶǦʹͷ ͹Ͳͻǡ͹ͺͲ ͹Ͳͻǡ͹ͺͲ TOTAL TRANSPORTATION 159,562,591$ 32,594,121$ ȋȌ ʹͲʹͶǦʹͷ ͹Ȁ͵ͳȀʹͲʹͷ ͵ͷǡͲͲͲ͵ͷǡͲͲͲ ʹͲʹͳǦʹ͸ ͺȀ͵ͲȀʹͲʹ͸ ʹͻͲǡͲͲͲʹͻͲǡͲͲͲ Ǧ ʹͶͻͻ ʹͲʹͳ ͹͹͵ǡ͸͸͸ͳͷͻǡͶ͸ʹ Ǧ͵͹͹ ʹͲʹʹ ͶʹͲǡͲͲͲͶʹͲǡͲͲͲ ʹͲʹʹǦʹͲʹ͵Ǧʹ͹ ͵Ȁ͵ͳȀʹͲʹ͹ ͸ʹͳǡͷ͸ʹ͸ʹͳǡͷ͸ʹ ʹͲʹ͵Ǧ ʹͲʹͶǦʹͺ ͷͻͺǡͷ͵ʹͷͻͺǡͷ͵ʹ ʹͲʹͶǦʹͲʹͶǦʹͺ ͹ͷͲǡͲͲͲ͹ͷͲǡͲͲͲʹͲʹͶǦʹ͹ ͸Ȁ͵ͲȀʹͲʹ͹ ͻ͹ǡͷͲͲ ͻ͹ǡͷͲͲ ʹͲʹͶǦʹͷ ͷȀ͵ͳȀʹͲʹͷ ʹͲǡͲͲͲ ʹͲǡͲͲͲȋȌʹͲʹͳ ʹͲʹͳǦʹ͸ ͳʹȀ͵ͳȀʹͲʹ͸ ʹ͵ǡʹͻͲǡͶ͵ͺ ͸ǡ͸ͶͶǡ͸Ͷͷ ʹͲʹͶǦʹͷ ͸Ȁ͵ͲȀʹͲʹͷ ͹Ͷǡ͹Ͷʹ͹Ͷǡ͹ͶʹʹͲʹͶǦʹͷ ͳȀ͵ͳȀʹͲʹͷ ʹͶǡͲͲͲ ʹͶǡͲͲͲ ʹͲʹͶǦʹͷ ͷͳǡͻͳʹǡͻͺ͸ Ȁͷͳǡͻͳʹǡͻͺ͸ TOTAL OTHER 78,908,426$ 61,648,429$ GRAND TOTAL 257,166,909$ 105,153,638$ Ǧ ͻ͹ǡ͸ͲͶǡ͵ͳͺ͹ʹǡͷͷͻǡͷͳ͹ ͳͷͻǡͷ͸ʹǡͷͻͳ͵ʹǡͷͻͶǡͳʹͳ Grant Total 257,166,909$ 105,153,638$ ǡǤ ǤǤ GRANTS BUDGET EXPENDITURE SUMMARY 2025 Page: 32 Core Values: Inclusion, Collaboration, Quality Service, Strategic Focus, Fiscal Responsibility FY 2024-25 Budget in Brief DEFINITIONS: CDBG: Community Development Block Grant – A federal program administered by the U.S. Department of Housing and Urban Development (HUD) that provides funding to the City of Denton for projects aimed at improving community infrastructure, expanding affordable housing, supporting economic development, and enhancing public services to benefit low- and moderate-income residents. Certificates of Obligation (COs): Bonds issued by the City for infrastructure projects without requiring voter approval but restricted to specific uses. CIP: Capital Improvement Program - A long-term plan that outlines funding for major infrastructure projects, including streets, facilities, water and wastewater systems, and other capital assets. COLA: Cost of Living Adjustment - An adjustment to employee salaries or benefits to account for inflation and rising living costs. DEC Debt: Debt incurred to finance the construction and operation of the Denton Energy Center, a natural gas- fired power plant. DME: Denton Municipal Electric - The City of Denton’s municipally owned electric utility, responsible for providing electricity to residents and businesses. ECA Revenues: Revenues from the Energy Cost Adjustment, a mechanism that adjusts utility bills based on fluctuations in wholesale energy costs. ERCOT Market: The Electric Reliability Council of Texas, which manages the electric grid and wholesale electricity market for much of Texas, including Denton. FY 2025/26 and Future Assumptions: Assumes a reduced Maintenance and Operations (M&O) tax rate to balance increases in Appraised Value (AV) of properties. General Obligation Bonds (GOs):  Voter-approved bonds issued by the City to fund infrastructure projects such as roads and public facilities. Government Finance Officers Association (GFOA): A professional association representing public finance officials throughout the United States and Canada. GFOA promotes best practices in budgeting, financial management, and transparency in government. NON-DEC Debt Service: Debt service payments not related to the Denton Energy Center (DEC). NRPA: National Recreation and Park Association - A national organization that sets standards and provides support for parks and recreation services, often referenced in Denton’s park-related initiatives. Revenue Bonds: Bonds issued for utility-related projects (e.g., water, wastewater, or electric services) and repaid through utility revenues. TCRF Revenues: Revenues from the Transmission Cost Recovery Factor, which allows DME to recover the cost of building and maintaining transmission infrastructure. TIRZs: Tax Increment Reinvestment Zones – Designated areas where property tax revenue growth funds infrastructure and redevelopment projects. This report was prepared and presented by the City of Denton, Texas Finance Department. Copies of the City’s Annual Operating Budget and Annual Comprehensive Financial Report may be found on the City’s website at www.cityofdenton.com