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03.28.23 WKWelcome to the March 28, 2023, Prosper Town Council Work Session Call to Order/Roll Call Agenda Item 1. Discuss multi-year budget projections. (RBS/CL) Purpose •Kick Off to the Budget Season •Ensures Council and Staff are in alignment •Council Goals and Priorities •Stable predictable finances and property tax rate •Accelerate Capital program to support and promote growth •Excellence in Municipal Services •Revenue forecasts •Committed or requested (per five-year staffing requests)expenditures •Expenditure drivers •Needed Work sessions •Helps establish upcoming workplan for Budget Preparation •Population growth and capital project completions used for five-year staffing •A/V growth used for multi-year capital projects •Confirm Budget Calendar Upcoming Budget Calendar Key Dates •March –5-year budget projection •May 15 –Preliminary Appraisal Rolls Due •June 27 –Council Budget Workshop •July 25 –Certified Appraisal Received by Staff •August 4 –Preliminary Budget to Town Council •August 8 –Submit Proposed Budget to Town Council •August –Budget Town Hall Meeting •September 12 –PH/Vote on Budget/Vote on Tax Rate General Fund Assumptions •Projected Revenues for FY 2024 •Property Tax –51% of revenue, 14.3% growth •Sales Tax –22% of revenue, 7.8% growth •License, Permits & Fees –14% of revenue, flat growth •Franchise Fees –5% of revenue, 4.5% growth •Projected Expenditures –(not reviewed or approved by Town Management) •Personnel -60% of expenditures, 4% vacancy rate •3% merit for all employees •Compensation Study Funds •8% market for Public Safety pay plan •2.5% market for all General Pay Plan •New Positions –includes all positions request by departments General Fund Assumptions (continued) •Expenditures (continued) •Operations –2% growth •Known Project Completion •Fire Station 4 –2025 Building and Engine staffing, 2027 Ambulance staffing •Raymond Park –2025 •Streets –Various street openings in all years •One-time/Capital Expenditures (typically from new positions or programs) •Capital Dedicated –11.2 cents •Town Manager proposed budget will balance with respect to recurring revenue and expenditures. One-time will balance with respect to available revenues with fund balance drawdowns (if any) complying with minimum fund balance policy. Debt Capacity and Capital Dedicated Goal is to maintain stable I&S rate of 18.2 cent rate but no more than 20.2 cents per policy •With additional DS capacity due to greater than expected A/V growth in FY 2024 to maintain the DS tax rate, we can: •Issue more debt in 2023 since first DS payment is 2024 •Front load DS to pay off debt sooner and keep rate up •Issue same amount but plan on redeeming callable debt in 2024 •Keeping Capital Dedicated at 11.2 cents means at projected growth, we will have about $8.6 million in capital dedicated funds Utility Fund Assumptions •Work in Progress •Solid Waste Fund was new in FY2023 •Rate increases from suppliers •We are a Distribution and Collection Utility •43% of total expenditures service cost from regional provider •Do not have firm increases from providers •Eventual goal to issue revenue bonds Property Valuation Year Existing Valuation Reappraisal Growth Reappraisal Growth New Property Total Valuation Total Growth 2020 3,744,683,788 49,749,601 1.3%414,634,110 4,209,067,499 12% 2021 4,209,067,499 31,571,433 0.8%360,557,369 4,601,196,301 9.3% 2022 4,601,196,301 366,487,773 8.0%469,526,490 5,437,210,564 18.2% 2023 5,437,210,564 582,365,527 10.7%596,431,779 6,616,007,870 21.7% 2024 6,616,007,870 595,440,708 10.0%461,000,000 7,672,448,578 16.0% 2025 7,672,448,578 460,346,915 6.0%419,000,000 8,551,795,493 11.5% 2026 8,551,795,493 513,107,730 6.0%377,000,000 9,441,903,223 10.4% 2027 9,441,903,223 566,514,193 6.0%377,000,000 10,385,417,416 10.0% 2028 10,385,417,416 623,125,045 3.0%377,000,000 11,385,542,461 9.6% New Property Valuation Year New Commercial New Single Family Single Family Permits Total New Property Valuation 2020 142,506,404 272,127,706 786 414,634,110 2021 79,258,829 281,298,540 1244 360,557,369 2022 146,247,781 323,278,709 700 469,526,490 2023 134,460,200 461,971,579 1225 596,431,779 2024 125,000,000 336,000,000 800 461,000,000 2025 125,000,000 294,000,000 700 419,000,000 2026 125,000,000 252,000,000 600 377,000,000 2027 125,000,000 252,000,000 600 377,000,000 2028 125,000,000 252,000,000 600 377,000,000 Tax Rate Year I&S (Debt Service) O&M (General Fund) Capital Dedicated TIRZ Total Tax Rate Unused Increment Balance 2020 0.1525 0.3675 0 0.006 0.52 N/A 2021 0.1525 0.3675 0 0.008 0.52 0.013725 2022 0.182 0.328 0 0.008 0.51 0.043161 2023 0.18017 0.32983 0.112 0.013 0.51 0.017336 2024 0.182 0.328 0.112 0.011 0.51 0.002523 2025 0.182 0.325311 0.112 0.012 0.507311 0 2026 0.182 0.317638 0.112 0.013 0.499638 0 2027 0.182 0.310147 0.112 0.014 0.492147 0 2028 0.182 0.302832 0.112 0.015 0.484832 0 Property Tax Levy –51% of GF Revenue Year General Fund Levy Growth 2020 16,872,567 N/A 2021 18,547,273 9.93% 2022 19,197,205 3.5% 2023 23,519,547 22.52% 2024 26,880,117 14.29% 2025 29,631,902 10.24% 2026 31,895,314 7.64% 2027 34,154,275 7.08% 2028 36,463,900 6.76% Sales Tax Budget History Year Original Budget Amended Budget Actual Original Budget Variance Amended Budget Variance 2020 5,011,936 5,011,936 6,096,355 21.64%21.64% 2021 5,733,141 7,517,110 8,212,116 43.24%9.25% 2022 7,972,237 9,119,683 9,464,641 18.72%3.78% 2023 10,105,208 ---- Sales Tax Projections –22% Year Sales Tax (TIRZ Adj.)Sales Tax Growth Mixed Beverage Mixed Beverage Growth 2020 6,096,355 N/A 74,941 N/A 2021 8,212,231 34.71%101,327 35.21% 2022 9,464,641 15.25%122,298 20.70% 2023 10,041,775 6.10%168,374 37.67% 2024 10,881,288 8.36%187,453 11.33% 2025 11,655,736 7.12%206,199 10.00% 2026 12,424,296 6.59%226,818 10.00% 2027 13,100,320 5.44%249,500 10.00% 2028 13,809,962 5.42%274,450 10.00% Sales Tax Projections Sales Tax 2020 2021 2022 2023 2024 OCT 465,498 28.68%598,999 34.37%804,868 3.26%831,143 10.00%914,257 NOV 447,159 35.28%604,919 32.63%802,329 5.20%844,037 10.00%928,441 DEC 690,734 24.49%859,910 31.58%1,131,458 -0.04%1,130,996 10.00%1,244,096 JAN 432,619 32.45%573,015 14.62%656,784 5.24%691,209 10.00%760,330 FEB 402,611 30.58%525,718 17.45%617,477 10.00%679,224 10.00%747,147 MAR 569,350 50.31%855,802 7.81%922,615 10.00%1,014,876 10.00%1,116,364 APR 481,082 49.42%718,811 9.74%788,834 10.00%867,717 10.00%954,489 MAY 546,444 27.15%694,806 35.33%940,283 10.00%1,034,312 10.00%1,137,743 JUN 717,392 28.36%920,846 12.33%1,034,354 10.00%1,137,790 10.00%1,251,569 JUL 551,773 34.28%740,910 11.39%825,265 10.00%907,792 10.00%998,571 AUG 549,448 40.79%773,558 2.72%794,592 10.00%874,051 10.00%961,456 SEP 763,593 35.53%1,034,917 -1.06%1,023,996 10.00%1,126,396 10.00%1,239,036 TOTAL 6,617,705 8,902,213 10,342,855 11,139,543 12,253,497 34.52%16.18%7.70%10.00% Floor +last year EOY 5,671,405 7,078,141 9,577,039 10,444,801 3-year LT Trend 6,160,443 7,533,595 10,265,141 12,891,335 3 month trend 6,588,874 8,568,862 11,827,525 10,696,154 12 Month Trend 5,126,154 8,243,793 12,073,243 11,285,536 Average 5,886,719 7,856,098 10,935,737 11,291,474 Less: TIRZ 521,350 689,982 878,214 1,097,768 1,372,209 6,096,355 8,212,231 9,464,641 10,041,775 10,881,288 Building Fees –14% of GF Revenue ACTUAL ACTUAL BUDGET PROJECTED PROJECTED PROJECTED PROJECTED PROJECTED 2021 2022 2023 2024 2025 2026 2027 2028 100-4017-40-01 Contractor Registrat 88,900 75,200 85,000 83,900 83,900 83,900 83,900 83,900 100-4035-10-00 3% Construction Fee 1,086,529 1,198,931 600,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 100-4207-40-03 Network Node Applica 4,000 1,250 0 - - - - - 100-4210-40-01 Building Permits 5,970,821 4,508,584 4,781,000 4,350,000 4,350,000 4,350,000 4,350,000 4,350,000 100-4211-40-02 Multi-Family Registr 9,780 9,480 9,480 9,480 9,480 9,480 9,480 9,480 100-4218-10-00 Administrative Fees-15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 100-4220-40-01 Zoning Permits -28 0 - - - - - 100-4220-40-03 Zoning Application F 34,720 49,780 35,000 35,000 35,000 35,000 35,000 35,000 100-4225-40-03 Development Applicat 103,010 64,105 65,000 65,000 65,000 65,000 65,000 65,000 100-4230-10-00 Other Permits 7,660 9,730 8,000 8,000 8,000 8,000 8,000 8,000 100-4230-20-01 Other Permits 325 525 450 450 450 450 450 450 100-4230-40-01 Other Permits 312,333 302,946 250,000 250,000 250,000 250,000 250,000 250,000 100-4240-40-01 Plumb/Elect/Mech Per 67,331 92,937 65,000 65,000 65,000 65,000 65,000 65,000 100-4242-40-01 Re-inspection Fees 161,200 131,280 120,000 120,000 120,000 120,000 120,000 120,000 100-4245-40-02 Health Inspections 66,335 59,160 65,000 65,000 65,000 65,000 65,000 65,000 100-4315-30-05 Fire Review/Inspect 138,275 84,050 150,000 150,000 150,000 150,000 150,000 150,000 100-4440-20-01 Accident Reports 1,086 994 1,600 1,000 1,000 1,000 1,000 1,000 100-4450-20-01 Alarm Fee 68,652 71,363 75,000 65,000 65,000 65,000 65,000 65,000 8,135,956 6,675,286 6,325,530 6,282,830 6,282,830 6,282,830 6,282,830 6,282,830 47.34%-17.95%-5.24%-0.68%0.00%0.00%0.00%0.00% Franchise Fees –5% of GF Revenue Personnel Expenditures –60% of GF Expenditures •Merit Adjustment –3% •General Fund Impact -$800,719 •Water and Sewer Impact -$92,388 •Storm Drainage Utility Fund -$4,567 •Public Safety Market Adjustment –8% •General Fund Impact -$752,924 •All Other Market Adjustment –2.5% •General Fund Impact -$360,934 •Water and Sewer Impact -$77,939 •Storm Drainage Utility Fund -$6,321 •Benefits –3% New Personnel Requests FTE Count Current 2024 2025 2026 2027 2028 Total Ending Fire 78 1 9 4 7 0 21 99 Police (Sworn)49 13 7 7 6 8 41 90 Police (non- sworn) 20 6 7 4 3 3 23 43 All Other 200.5 30 25 15 18 10 98 298.5 Total FTE 347.5 50 48 30 34 21 183 530.5 Amount 2024 2025 2026 2027 2028 Fire 99,230 1,061,124 510,496 595,381 0 Police(Sworn)1,616,794 731,455 852,527 627,623 871,389 Police(non-sworn)420,528 490,294 282,968 211,459 198,663 All Other 1,840,418 1,379,974 1,076,657 1,141,812 627,686 Total FTE 3,976,970 3,662,847 2,722,649 2,675,507 1,697,738 Project Completions •Fire Station 4 –2025 (Building & Engine), 2027 (Ambulance) •Raymond Park –2025 •Streets –Completed each year (Median Maintenance) Non- Recurring Expenditures •Vehicles and Equipment for new positions •Recruiting and on-boarding costs •Short-term consulting services •Software implementation fees Debt Capacity at 0.182 I&S Tax Rate See Debt Service Long Range Plan handout Year I&S Property Tax Revenue GO CO Additional Capacity Debt Service 2023 12,808,519 18,795,000 1,063,000 13,200,000 12,823,886 2024 14,915,189 12,875,000 -7,700,000 14,941,147 2025 16,578,024 14,625,000 4,030,000 500,000 16,605,025 2026 18,275,347 15,150,000 -12,000,000 18,298,487 2027 20,042,382 15,150,000 5,493,000 2,800,000 20,066,750 2028 21,914,567 15,150,000 -2,350,000 21,940,016 Work Sessions •Compensation –Already Planned •Other Capital needs not currently on Plan •Interim Recommendations from CIP Sub-Committee or wait until Budget Submittal •Others Needed? Agenda Item 2. Discuss Field Use Policy for youth sports. (DB) PBSA Field Use Expansion & Pilot Program PBSA Capacity Constraints •Request to open Frontier Fields 3/4/5 for practices •Will provide 28 new practice times weekly allowing PBSA to meet current demand without turning away kids •4000+ participants annually •Currently capping registration •Turned away 50+ Kids in the Fall 2022 (baseball) •Projected to turn away 80+ Kids in Spring 2023 (baseball) •PBSA seeing 26% annual growth since 2015 (has tripled participant numbers) •Softball needs are currently being met PBSA Request •Open Frontier Fields 3, 4, and 5 for Practice •Use artificial turf mounds (minimize wear) •PBSA will provide Batter Box turf mats to protect field (minimize wear) •PBSA willing to increase fees (average of $152 per participant) to offset costs for additional field maintenance and repair •PBSA paid Town $69,940 in field use fees in 2022 •$5 increase over existing fee per participant would yield a $20,000 increase in funds •Use Fall as a Pilot Program 3 4 5 Concerns / Potential Impact on Town •Fields will receive more traffic causing additional wear and tear •PBSA will purchase mats and utilize artificial turf mounds to minimize impact •Added use will result in an increase in needed maintenance (fertilization, aeration, overseeding, labor) at a current annual cost of approximately $17,500. •PBSA is willing to increase fees to offset costs •Change in Strategy and Philosophy •Transition from “Game Only” fields to provide offerings to larger population. •As participant numbers grow, there will most likely be a need to expand to other fields. •Continue to look for opportunities to develop additional athletic fields Other PBSA Options •Limit registrations •Utilize additional non-athletic use designated locations (neighborhood parks) •Reduce practice offerings •Reduce length of season Adjourn