02.25.25 Town Council Meeting Presentation Work SessionWelcome to the February 25, 2025,
Prosper Town Council
Work Session
Call to Order/Roll Call
Agenda Item 1.
Discussion regarding the Town’s multi -year financial projections and
Budget Adoption Calendar. (CL)
Multi-Year Financial Forecast
Council Workshop
February 25, 2025
Town Council Strategic Visioning Priorities
ACCELERATION OF INFRASTRUCTURE
•Work with the Capital Improvement Subcommittee to identify gaps in the Town’s infrastructure and ensure that it meets the
demands of a growing community
•Utilize all available financial methods (Bonds, Certificates of Obligation, Capital Dedicated Fund, Grants, etc.) to fund projects.
•Work with the Capital Improvement Subcommittee to plan for a future bond program and/or pay-as-you-go program.
DEVELOPMENT OF DOWNTOWN PROSPER AS A DESTINATION
•Collaborate with the Downtown Business Alliance, Community Engagement Committee, Downtown Committee, and Prosper
EDC to implement the Downtown Master Plan.
•Pursue a mix of public and private developments as catalysts for office, retail, restaurants, entertainment, housing, and outdoor
events.
ENSURE THE TOWN’S COMMERCIAL CORRIDORS ARE READY FOR DEVELOPMENT
•Ensure US 380 and Dallas North Tollway are primed and ready for development.
•Develop long-term strategies for land use, landscaping, lighting, and traffic.
•Leverage partnerships with TxDOT, NTTA and private development.
•Prioritize infrastructure to meet demand, using incentives when appropriate.
CONTINUE TO PROVIDE EXCELLENT MUNICIPAL SERVICES
•Strive to be a high-performing organization focused on continuous improvement, best practices, and benchmarking.
•Develop a culture of excellence and provide the financial resources necessary to support these goals.
•Provide a welcoming and respectful environment for residents, visitors, and Town employees.
WORK TOWARDS A GROWING AND DIVERSIFIED TAX BASE
•Collaborate with Prosper EDC and be adaptable to changing market conditions.
•Place an emphasis on corporate, medical, and life-sciences sectors.
•Utilize metrics to create resiliency strategies against market changes.
Purpose
•Kick Off to the Budget Season
•Ensures Council and Staff are in alignment
•Council Goals and Priorities (Previous Slide)
•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
•Trending and Analysis with Police and Fire are difficult because the
personnel counts split between the General Fund and both SPDs
are inconsistent from year to year
•A proposed solution would be to transfer Sales Tax Revenue from
SPDs to General Fund during the year and recognize all Police and
Fire personnel costs in the General Fund
•The Fund balance requirement for the General Fund would need to
be altered to be 21% of recurring expenditures less the funding
provided by the SPDs.
Proposed Change in Reporting for Police and Fire SPD
Upcoming Budget Calendar Key Dates
•February – 5-year budget projection
•Early April – Appraisal District Estimates
•May 15 – Preliminary Appraisal Rolls Due
•June 25 – Council Budget Workshop
•July 25 – Certified Appraisal Received by Staff
•August 8 – Preliminary Budget to Town Council
•August 12 – Submit Preliminary Budget to Town Council
•August 18 –Deadline to Call Tax Rate Election if Exceeding Voter Approval Rate
•August 29 – Budget Town Hall Meeting
•September 9 – PH/Vote on Budget/Vote on Tax Rate
General Fund Assumptions
•Projected Revenues for FY 2026
•Property Tax – 42% of revenue, 14.7% growth
•Sales Tax – 21% of revenue, 8.9% growth
•Costco – March 2025 (50% Developer’s Agreement)
•HEB – Fall 2025 (fiscal year 2026)
•License, Permits & Fees is projected to be flat as growth is making up
for the reduction of Engineering Inspection Fees due to legislative
changes
•Projected Expenditures – (not reviewed or approved by Town
Management)
•Personnel - 65% of expenditures, 2.5% vacancy rate
•3% merit for all employees
•5% Benefit Increase
•New Positions – includes all positions request by departments
Personnel Expenditures – 65% of GF Expenditures
•Merit Adjustment – 3%
•General Fund Impact - $1,030,965
•Water and Sewer Impact - $167,744
•Storm Drainage Utility Fund - $12,781
•Solid Waste Fund - $1,911
•Compensation and Classification Study
•Estimate - $300,000
•Philosophy to be established
•Health Benefits – 5%
•Delayed personnel costs form FY2025 “hangover” - $560,397
•Merit Miscalculation from FY2025
•Fire Station #4 Staffing and Operations – Applied for SAFER Grant
General Fund Assumptions (continued)
•Expenditures (continued)
•Operations – 3% growth (inflation, contractual increases)
•Known Project Completion
•Fire Station 4 – FY2026, staffing in FY2026, FY2027, and FY2028
•Raymond Park – Late FY2025, full year impact FY2026
•Public Works Facility – Late FY2026, early FY2027
•Library – FY2030
•Parks Multi-generational Facility – FY2030+
•Streets and Median – Various street openings in all years
•One-time/Capital Expenditures $1.7M (typically from new positions or programs)
•Capital Dedicated – 10 cents
•Town Manager preliminary 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 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 2026 to maintain the DS tax rate, we can:
•Issue more debt in 2025 since first DS payment is 2026
•Front load DS to pay off debt sooner and keep rate up
•Issue same amount but plan on redeeming callable debt in 2025
•Restructure callable debt in 2026
•Keeping Capital Dedicated at 10 cents means at projected growth, we
will have about $10.7 million in capital dedicated funds
Debt Service and Capital Dedicated
Property Valuation
Fiscal Year Starting Taxable Valuation Reappraisal Growth Reappraisal
Growth New Property Total Valuation Total Growth
2021 4,209,067,499 31,571,433 0.80%360,557,369 4,601,196,301 9.30%
2022 4,601,196,301 366,487,773 8.00%469,526,490 5,437,210,564 18.20%
2023 5,437,210,564 582,365,527 10.70%596,431,779 6,616,007,870 21.70%
2024 6,616,007,870 842,814,805 12.70%876,474,004 8,335,296,679 25.99%
2025 8,335,296,679 408,205,593 4.90%878,599,323 9,622,101,595 15.44%
2026 9,622,101,595 279,040,946 2.90%851,843,858 10,752,986,399 11.75%
2027 10,752,986,399 215,059,728 2.00%805,586,082 11,773,632,209 9.49%
2028 11,773,632,209 235,472,644 2.00%740,376,945 12,749,481,798 8.29%
2029 12,749,481,798 254,989,636 2.00%679,429,721 13,683,901,155 7.33%
2030 13,683,901,155 293,678,023 2.14%659,429,721 14,637,008,899 6.97%
New Property Valuation
Fiscal Year New Commercial New Single Family Single Family Permits New Multi-family Total New Property
Valuation
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 188,002,668 654,248,828 904 34,222,508 876,474,004
2025 216,099,749 572,465,566 900 76,216,381 864,781,696
2026 191,928,988 583,914,870 900 76,000,000 851,843,858
2027 205,769,922 529,416,160 800 70,400,000 805,586,082
2028 200,372,465 540,004,480 800 740,376,945
2029 197,475,731 481,953,990 700 679,429,721
2030 167,836,661 491,593,060 700 659,429,721
Tax Rate
Fiscal Year I&S (Debt
Service)
O&M
(General
Fund)
Capital
Dedicated
Total Tax
Rate
Unused
Increment
Balance
Foregone
Revenue
Unused
Increment
New
Calculation
2021 0.1525 0.3675 0 0.52 0.013725
2022 0.182 0.328 0 0.51 0.043161
2023 0.18017 0.32983 0.112 0.51 0.017336
2024 0.177258 0.332742 0.102 0.51 0.002523
2025 0.180392 0.224608 0.100 0.505 -1,599,176 0.017075
2026 0.18 0.225 0.100 0.505 -1,599,176 0.014871
2027 0.18 0.225 0.100 0.505 -
2028 0.18 0.225 0.100 0.505 -
2029 0.18 0.225 0.100 0.505 -
2030 0.18 0.225 0.100 0.505 -
Sales Tax Projections – 21%
Fiscal 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 10,160,615 7.35%202,909 65.91%
2024 11,150,961 9.75%163,725 -19.31%
2025 12,008,218 7.69%219,665 34.17%
2026 13,083,390 8.95%221,862 1.00%
2027 13,911,419 6.33%235,173 6.00%
2028 14,675,904 5.50%249,284 6.00%
2029 15,335,348 4.49%264,241 6.00%
2030 15,839,069 3.28%280,095 6.00%
Benchmarking Proposed Fiscal Year
2024-2025 Tax Rates
Entity Homestead
Exemption
Rate
General
Fund
Capital
Dedicated
I&S Total Tax Rate Equivalent Tax
Rate for
Homestead
Freeze
Anna 5.0%0.360213 -0.146987 0.507200 0.481840 No
Celina None 0.287061 -0.311107 0.598168 0.598168 Yes
Coppell 5.0%0.392071 -0.070151 0.462222 0.439111 No
Flower Mound 12.5%0.348344 -0.038956 0.387300 0.338888 No
Frisco 15.0%0.283406 -0.142111 0.425517 0.361689 Yes
Keller 20.0%0.249292 -0.043888 0.293180 0.234544 Yes
Little Elm None 0.435787 -0.124113 0.559900 0.559900 Yes
McKinney None 0.278935 -0.136578 0.415513 0.415513 No
Southlake 20%0.250000 -0.055000 0.305000 0.244000 Yes
Average of Comparison 8.61%0.320568 -0.118766 0.439333 0.408184 -
Prosper (FY2024-2025)17.5%0.224608 0.10 0.180392 0.505 0.416625 Yes
Prosper (FY2025-2026)17.5%0.225 0.10 0.18 0.505 0.416625 Yes
New Personnel Requests
FTE Count Current 2026 2027 2028 2029 2030 Total Ending
Fire 81 9 4 7 1 9 30 111
Police 93 14 9 10 14 12 59 152
Other General Fund 166.75 14 15 12 19 8 68 234.75
Utility Fund 71 7 4 3 4 2 20 84
Total FTE 410.75 44 32 32 38 31 177 581.75
Population 45,788 49,908 54,399 59,294 63,796 68,298
FTE per 1,000 Population 8.97 9.11 8.95 8.75 8.73 8.61
Amount 2026 2027 2028 2029 2030
Fire 1,108,244 470,375 700,894 146,555 1,108,245
Police 1,283,959 898,600 905,480 1,183,613 1,124,793
Other General Fund 1,025,305 938,176 939,182 1,195,287 643,787
Utility Fund 485,044 282,591 206,049 250,557 116,016
Total FTE 3,902,553 2,589,742 2,751,605 2,776,013 2,992,841
Utility Fund Assumptions
•Work in Progress
•Rate consultant will review rate structure and
propose changes for consideration
•Rate increases from suppliers
•We are a Distribution and Collection Utility
•50% of total expenditures service cost from
regional provider
•Do not have firm increases from providers
•Continue to issue revenue bonds
Work
Sessions
Future Work Sessions
•June 24 – Budget Workshop
•Compensation
•Budget assumption updates
•Utility Rate Structure?
•Other Capital needs not currently on Plan for CIP
consideration?
•Long-term Facility Maintenance Planning?
•Others Needed?
•Finance Committee met February 3, 2025, recommended no
change in tax rate or homestead exemption if not required.
•Discussion
Executive Session
•Section 551.087 – To discuss and consider economic development incentives and all matters incident and
related thereto.
•Section 551.072 – To discuss and consider the purchase, exchange, lease, or value of real property for
municipal purposes and all matters incident and related thereto.
•Section 551.074 – To discuss and consider personnel matters and all matters incident and related thereto.
•Section 551.089 - To deliberate security information collected, assembled, or maintained by or for a
governmental entity to prevent, detect, or investigate criminal activity, pursuant to Section 2059.055 of the
Texas Government Code, and all matters incident and related thereto.
•Section 551.074 - To discuss and consider personnel matters, including the annual evaluation of the Town
Manager, Town Attorney, and the Municipal Judge, and all matters incident and related thereto.
•Section 551.071 - To consult with the Town Attorney regarding legal issues associated with code
enforcement activities and substandard structures, law enforcement activities, and all matters incident and
related thereto.
•Section 551.071 – Consultation with the Town Attorney to discuss legal issues associated with any
agenda item.
The Town Council will reconvene after Executive
Session.
Reconvene into Work Session
Adjourn