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06.24.25 Town Council Meeting Presentation Work Session
Welcome to the June 24, 2025, Prosper Town Council Work Session Call to Order/Roll Call Agenda Item 1. Discuss the preliminary 2025-2026 fiscal year Budget. (CL) Compensation Study Market Results Recommendations 06/24/2025 Full Comp And Classification Study •Market Analysis •Ancillary Pays including Certification, Language, Educational pay •Benefits comparison including sick, vacation, longevity tuition reimbursement etc. •Job Description Revision •Pay Plan Structure •Performance Evaluation system Study Strategy •Completed Employee Outreach •7 Orientation Groups •10 Focus Groups •7 Supervisor Focus Groups •3 Department Head Focus Groups •Administer the employee JAT •Administer the Supervisor Review Total # of Employees taking electronic JAT # Of Employee Surveys Complete # Of Employee Surveys Incomplete 339 62 % Complete % Incomplete 84.54%15.46% Total # of Classifications Surveyed # of Classifications with a JAT # of Classifications without a JAT 158 10 % Complete % Incomplete 94.05%5.95% 401 Employee Summary Classification Summary 168 Market Observations •Starting Salaries for many positions are below market minimums •Narrow and inconsistent Pay Band Ranges •Tenure Compression is some departments Market Results •64 Positions below Market 0.1% - 18.6% •20 Sworn Public Safety Positions representing 153 employees •44 General Employee Positions representing 84 employees Market Recommendations •2 year Phased approach for implementation. •Move positions below market up to market minimums. •Provide market salary adjustments for Employees found to be below market. •0-3% plan adjustment for Public Safety Step Plans •4 position Reclassifications. •17 Title Changes •Other Recommendations will come after other aspects of the study are completed. Projected Costs •Projected Cost for Market Implementation $750,000 - $1,300,000 •Future Costs – Based on Decisions including Holidays, Ancillary Pays Town of Prosper Fiscal Year 2025-2026 Budget Workshop June 24, 2025 Property Valuation Fiscal Year New Property Growth from New Property Reappraisal Growth for Reappraisal Total Valuation less Freeze Total Growth 2020 414,634,110 11.1%49,749,601 1.3%4,209,067,499 12.4% 2021 360,557,369 8.5%31,571,433 0.8%4,601,196,301 9.3% 2022 469,526,490 10.2%366,487,773 8.0%5,437,210,564 18.2% 2023 596,431,779 11.0%582,365,527 10.7%6,616,007,870 21.7% 2024 876,474,004 13.3%842,814,805 12.7%8,335,296,679 26.0% 2025 878,599,323 10.54%408,205,593 4.9%9,622,101,595 18.3% 2026 842,135,775 8.75%288,749,029 3.0%10,752,986,399 11.75% Tax Rate 2025 2026 Change Debt Service 0.180392 0.18 -0.000392 General Fund 0.224608 0.225 +0.000392 Capital Dedicated 0.10 0.10 0 Total Tax Rate 0.505 0.505 0 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 Prelim.(FY2025-26)17.5%0.225 0.10 0.18 0.505 0.416625 Yes Sales Tax Year General Fund Amount Growth 2020 $6,096,349 25% 2021 $8,212,231 35% 2022 $9,464,640 15% 2023 $9,643,719 2% 2024 $11,053,794 15% 2025R $12,099,065 9% 2026P $12,704,018 5% General Fund Summary FUND ACCOUNT TYPE ACTUAL 2023-2024 ORIGINAL 2024-2025 PRELIMINARY AMENDED 2024-2025 PRELIMINARY BUDGET 2025-2026 PLANNING YEAR 2026-2027 PLANNING YEAR 2027-2028 PLANNING YEAR 2028-2029 PLANNING YEAR 2029-2030 RECURRING REVENUES Property Tax 20,579,403 23,332,018 23,332,018 26,153,114 28,724,723 31,239,489 33,711,953 35,856,445 Sales Tax 11,251,905 12,903,535 12,308,897 12,919,961 13,567,799 14,248,157 14,962,664 15,713,040 Franchise Fees 3,623,599 3,334,932 3,360,295 3,823,080 3,981,786 4,154,486 4,344,450 4,523,391 License, Fees & Permits 6,304,399 5,990,720 5,993,720 7,470,580 7,504,578 7,539,597 7,575,665 7,610,086 Charges for Services 1,558,705 1,342,524 1,542,524 1,482,977 1,483,666 1,484,372 1,485,034 1,485,034 Fines & Warrants 422,745 352,050 545,050 552,050 552,050 552,050 552,050 552,050 Investment Income 991,413 950,000 800,000 750,000 750,000 750,000 750,000 750,000 Transfers In 1,297,102 1,478,696 1,478,696 2,182,074 2,182,074 2,182,074 2,182,074 2,182,074 Miscellaneous 905,691 747,183 750,604 399,930 230,930 230,930 230,930 230,930 Park Fees 859,583 761,300 767,400 773,400 773,400 773,400 683,400 683,400 Tranfer In from SPD - - - 6,761,855 7,099,948 7,454,945 7,827,692 8,219,077 TOTAL RECURRING REVENUES $ 47,794,545 $ 51,192,958 $ 50,879,204 $ 63,269,021 $ 66,850,954 $ 70,609,500 $ 74,305,912 $ 77,805,527 RECURRING EXPENDITURES Administration 10,311,244 10,506,487 10,506,487 11,782,533 11,991,237 12,217,453 12,452,460 12,667,651 Police Services 9,440,359 10,779,230 10,779,230 11,553,144 11,900,746 12,132,205 12,371,778 12,591,205 Police SPD Personnel - - - 3,364,036 3,532,238 3,708,850 3,894,292 4,089,007 Fire Services 10,282,824 10,236,399 10,236,399 11,480,226 11,692,491 11,900,075 12,018,684 12,231,486 Fire SPD Personnel - - - 3,397,819 3,567,710 3,746,095 3,933,400 4,130,070 Public Works 4,475,308 4,994,174 4,794,174 5,385,862 5,446,874 5,518,272 5,590,818 5,665,594 Community Services 7,327,870 8,003,896 8,003,896 9,135,682 9,410,594 9,556,230 9,414,961 9,573,762 Development Services 3,286,655 3,795,129 3,870,129 4,090,446 4,184,581 4,287,888 4,394,228 4,506,405 Engineering 2,657,992 2,552,112 2,552,112 2,722,780 2,782,669 2,860,468 2,940,599 3,023,136 New Police Positions - - - - - - - - New Fire Positions - - - - - - - - All other Town Departments New Positions - - - - - - - - TOTAL RECURRING EXPENDITURES $ 47,782,252 $ 50,867,427 $ 50,742,427 $ 62,912,528 $ 64,509,140 $ 65,927,536 $ 67,011,220 $ 68,478,316 NET RECURRING FUNDS $ 12,293 $ 325,531 $ 136,777 $ 356,493 $ 2,341,814 $ 4,681,964 $ 7,294,692 $ 9,327,211 NON-RECURRING "ONE-TIME" REVENUES Grants 14,848 14,848 - - - - - Miscellaneous - - - - - - - TOTAL NON-RECURRING "ONE-TIME" REVENUES $ - $ 14,848 $ 14,848 $ - $ - $ - $ - $ - NON-RECURRING "ONE-TIME" EXPENDITURES One-Time Expenditures*1,983,223 1,952,201 1,952,201 44,595 1,700,000 1,700,000 1,700,000 1,700,000 TOTAL NON-RECURRING "ONE-TIME"EXPENDITURES $ 1,983,223 $ 1,952,201 $ 1,952,201 $ 44,595 $ 1,700,000 $ 1,700,000 $ 1,700,000 $ 1,700,000 NET NON-RECURRING "ONE-TIME" FUNDS $ (1,983,223)$ (1,937,353)$ (1,937,353)$ (44,595)$ (1,700,000)$ (1,700,000)$ (1,700,000)$ (1,700,000) NET CHANGE IN FUND BALANCE $ (1,970,930)$ (1,611,822)$ (1,800,576)$ 311,898 $ 641,814 $ 2,981,964 $ 5,594,692 $ 7,627,211 BEGINNING FUND BALANCE $ 15,197,869 $ 12,689,509 $ 13,226,939 $ 11,426,363 $ 11,738,261 $ 12,380,075 $ 15,362,039 $ 20,956,731 ENDING FUND BALANCE $ 13,226,939 $ 11,077,687 $ 11,426,363 $ 11,738,261 $ 12,380,075 $ 15,362,039 $ 20,956,731 $ 28,583,942 BALANCE OF UNRESTRICTED FUNDS $ 13,226,939 $ 11,077,687 $ 11,426,363 $ 11,738,261 $ 12,380,075 $ 15,362,039 $ 20,956,731 $ 28,583,942 Less: Contingency per Charter 9,556,450 10,173,485 10,148,485 11,230,135 11,481,838 11,694,518 11,836,706 12,051,848 1% Reserve 477,823 508,674 507,424 561,507 574,092 584,726 591,835 602,592 AMOUNT OVER (UNDER) MINIMUM RESERVE TARGET $ 3,192,666 $ 395,527 $ 770,453 $ (53,380)$ 324,145 $ 3,082,794 $ 8,528,188 $ 15,929,499 % AMOUNT OVER MINIMUM RESERVE TARGET 0.064154237 1%1%0%0%5%12%23% AMOUNT OVER (UNDER) IN DAYS OPERATING COST 23 3 5 (0)2 17 46 84 Current Year Adjustments Revenues Changes Sales Tax Batch plants and audit adjustment (594,638) Franchise Electric and Gas 25,363 Charges for Services Fire 200,000 Fines & Warrants $45,000 month trend 193,000 Investment Income lower yield (150,000) Miscellaneous Insurance Proceeds 12,521 REVENUE SUBTOTAL (313,754) EXPENDITURES Operations Street Maintenance (200,000) Development Services 75,000 Subtotal Operations (125,000) (125,000) From Fund Balance (188,754) Next Year Revenue Adjustments Revenues Changes Changes that wash Total Changes Property Tax Reappraisal Growth 953,596 953,596 New Property 1,867,500 1,867,500 Sales Tax - 5% over amended 16,426 16,426 Franchise - PILOT from Revenue Growth 338,623 338,623 Electric and Gas 100,000 100,000 License, Fees & Permits - Development Fee Increases 1,400,000 1,400,000 Engineering Inspections (271,821)(271,821) Updated Engineering Fees 364,130 364,130 Charges for Services - Fire 140,000 140,000 Miscellaneous - COPS Grant (167,333)(167,333) FLOCK (189,600)(189,600) Investment Income - lower yield (200,000)(200,000) Fines & Warrants - $45,000 month trend 200,000 200,000 Transfers In - G&A recalculation 703,378 703,378 Transfer In from SPD - Sales Tax Transfer In 6,761,855 6,761,855 REVENUE SUBTOTAL 5,254,899 6,761,855 12,016,754 Next Year Expenditure Adjustments EXPENDITURES Payroll Changes Changes that wash Total Changes Merit Miscalculation for General Fund 650,000 650,000 3% Merit (Oct-Dec) Dollar Amount (Jan-Sep) Non-Sworn 344,000 344,000 Sworn Merit Steps 716,000 516,000 Comp Study Implementation 300,000 300,000 Fire OT Increase 42,446 242,446 Fire FLSA OT Increase 170,950 170,950 Police OT Increase 179,996 179,996 TMRS, SS, Med Benefits on Increase 341,289 341,289 SPD Personnel - 6,761,855 6,761,855 24% Increase in ER Health Premiums 989,136 989,136 Budgeting for all possible wellness (Contingency)117,800 117,800 Subtotal Payroll 3,851,617 6,761,855 10,613,472 Operations - Costco Rebate 250,000 250,000 Town Manager's Contingency (364,000)(364,000) ERP Software Maintenance 309,408 309,408 Police Vehicle Expense 247,705 247,705 Fire Vehicle Expense 79,843 79,843 Parks Electricity 25,123 25,123 Parks Contracted Services 20,000 20,000 Parks Water/Sewer Charges 554,877 554,877 Police SRT Equipment 80,000 80,000 Subtotal Operations 1,202,956 - 1,202,956 EXPENDITURES TOTAL 5,054,573 6,761,855 11,816,428 Additional Items to Consider Additional Items to Consider Increase PILOT to 4% from 2%833,000 Water savings due to Raymond Park Well 200,000 Charge Engineering Salaries to Projects 800,000 Make Capital Dedicated a Flat $10,000,000 or 0.092997 752,986 Reduce I&S Rate by 0.001 to 0.179 107,529 TOTAL ADDITIONAL ITEMS TO CONSIDER 2,693,515 Health Fund Health Insurance Fund Summary FUND ACCOUNT TYPE ACTUAL 2023-2024 ORIGINAL 2024-2025 PRELIMINARY AMENDED 2024-2025 PRELIMINARY BUDGET 2025-2026 REVENUES Employer Contributions 3,467,157 4,136,107 4,136,705 5,575,276 Employee Contributions 1,013,114 1,006,410 1,203,621 1,323,984 Investment Income 34,341 20,000 4,000 20,000 Cobra and Stop Loss Reimbursements 368,619 300,000 750,000 300,000 Transfer In 1,100,000 1,000,000 TOTAL REVENUES $ 4,883,230 $ 5,462,517 $ 7,194,326 $ 8,219,260 EXPENDITURES Operating Expenses 426,228 450,000 450,000 470,000 Claims 4,543,025 4,497,525 6,440,888 7,000,000 Insurance 375,411 419,423 419,423 465,559 Wellness Program - 6,000 6,000 6,000 TOTAL EXPENDITURES $ 5,344,663 $ 5,372,948 $ 7,316,311 $ 7,941,559 Period Excess / (Deficit)$ (461,433)$ 89,569 $ (121,985)$ 277,701 NET CHANGE IN FUND BALANCE $ (461,433)$ 89,569 $ (121,985)$ 277,701 BEGINNING FUND BALANCE $ 609,567 $ 708,756 $ 148,134 $ 26,149 ENDING FUND BALANCE $ 148,134 $ 798,325 $ 26,149 $ 303,850 Months of Claims Expense in Reserve 0.39 2.13 0.05 0.52 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 551.071 – 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