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20200618 Budget Work Session PPTTOWN COUNCIL BUDGET WORK SESSION June 18, 2020 Call to Order/Roll Call. Work Session Agenda •Budget Calendar and Strategies •FY 2019-2020 Budget Highlights •FY 2020-2021 Budget Projections •Council Budget Priorities for FY 2020-2021 •CIP Update •Strategic Planning Update •CARES Act •Retention Pond Fountains 3 Review of FY 2020-2021 Budget Calendar •July 25, 2020 Appraisal District Certifies Tax Roll •August 11, 2020 Town Manager presents Proposed Budget Certified Collection Rate/Certified Appraisal Roll and Proposed Property Tax Rate to Town Council •August 17, 2020 Finance Subcommittee Reviews Proposed Budget •August 25, 2020 Town Council Meeting –Public Hearing •September 8, 2020 Adopt Budget and Tax Rate •October 1, 2020 New Fiscal Year Begins 4 Budget Strategies for current Economic Environment 5 •Focus on one-time expenditures or non-recurring costs •Anticipate future needs in the five-year plan and the ability to fund those needs •Fund long-term under conservative growth assumptions •Potentially consider a mid-year budget adjustment as we evaluate the ongoing environment FY 2019-2020 Budget Highlights 6 •No increase in property tax rate •Increased property valuations •New growth to tax roll •Increased sales tax receipts •Increased service levels to Town •Increased infrastructure improvements FY 2019-2020 General Fund Budget Highlights 7 •Increased approved workforce from 183 to 199 FTE positions •Received SAFER grant to hire 6 Firefighter/Paramedics •Constructed an office in Town Hall for the Mayor •Increased Library hours to include Mondays •Funded $1.25M towards street construction projects FY 2019-2020 Water -Sewer Fund Budget Highlights 8 •Increased approved workforce from 40 to 47 FTE positions •Renewed solid waste contract with CWD •Funded various water capital projects -$850,000 •Funded an inline and manhole rehabilitation project Growth Pressures 9 Growth Pressures 10 Growth Pressures – Public Safety 11 Major Revenue Streams Property values and TAV projected growth Debt Service –I & S Rate Sales Tax Building Permits Water and Sewer Rates 12 GENERAL FUND 13 14 General Fund Revenue Projections FUND ACCOUNT TYPE ACTUAL 2018-2019 AMENDED BUDGET 2019-2020 PROJECTED 2019-2020 PRELIMINARY ESTIMATE 2020-2021 REVENUES Property Tax 14,663,044 16,580,933 16,904,305 18,010,000 Sales Tax 4,943,218 5,077,533 5,481,710 5,644,361 Franchise Fees 1,671,416 1,731,375 1,716,666 1,792,875 License, Fees & Permits 4,725,967 4,315,353 4,474,988 3,575,100 Charges for Services 428,911 435,847 507,860 528,275 Fines & Warrants 486,868 474,163 350,000 400,000 Grants 106,906 458,672 432,717 414,672 Investment Income 367,860 300,249 200,000 85,000 Transfers In 881,542 989,087 989,087 1,071,820 Miscellaneous 197,673 99,000 116,890 252,350 Park Fees 320,070 270,280 98,654 222,000 TOTAL REVENUES 28,793,476$ 30,732,492$ 31,272,877$ 31,996,453$ 2020 Preliminary Property Valuation and Tax Revenue 15 Average Single-Family Home Value History (Collin County) 16 Appraised Values History *2020 estimated values are based on a final value estimate from CCAD and historical preliminary value loss from DCAD 17 Tax Year 2015 2016 2017 2018 2019 2020* Final Value ($Billions)$2.139 $2.546 $3.114 $3.744 $4.307 $4.632 Value Changes ($Millions)$385.7 $407.2 $567.8 $630.6 $563.0 $325.0 Percentage Change 22.00%19.04%22.30%20.25%15.04%7.54% 2020 Preliminary Property Valuations Including TIRZ •Preliminary Total Taxable (after freeze loss) Increased 19.74% Collin County Value $4,079,561,563 Denton County Value $1,077,987,717 Total Valuation $5,157,549,280 •Preliminary Existing Taxable Values Increased $441,687,135 or 10.26% •Preliminary New Construction Totaled $408,398,504 or 9.48% •Final Estimated Values $4,632,260,717 or 7.54% 18 Property Tax Reform –SB 2 •New legislation limits Texas governments’ ability to raise maintenance and operations (M&O) property tax revenues above 3.5% without voter approval. •Calculate the voter-approval rate at 3.5% (formerly rollback rate) •Voter -approval rate = (No-New-Revenue Maintenance and Operations Rate x 1.035) + current debt service rate •After the assessor submits the appraisal roll to the governing body, an officer or employee designated by the City (Town) shall calculate the no-new-revenue tax rate, and the voter-approval tax rate for the taxing unit. •A City (Town) Council may direct the designated officer or employee to calculate the voter-approval tax rate in the manner provided for a special taxing unit (8 percent) if any part of the City (Town) is located in an area declared a disaster area during the current tax year by the governor or by the president of the United States. TEX. TAX CODE 26.04 (c-1) 19 DEBT SERVICE FUND I&S RATE 20 Town’s Debt Capacity •Town’s Debt Policy: •Total principal of GO Bonds and all other outstanding tax indebtedness will be targeted not to exceed 6% of TAV tax rolls. •Town has maintained a level below the maximum debt capacity •Town’s target of 35% or less of the total tax rate -$0.52 per Town’s debt policy •Town’s I&S rate has been stabilized at 29.30% of tax rate or $0.1525 21 Bond Ratings 22 Moody’s current rating on the 2019 GO Bonds and COs outlook as stable at Aa1 S&P current rating on the 2019 GO Bonds and COs at AA+ Most recently confirmed June 2019 Aa1 and AA+ ratings are the second highest ratings of each agency Application currently in for 2020 ratings anticipated in July 2020 2021 Proposed Sales and Use Tax 23 Sales Tax Town levies a total of 2% sales tax on all taxable items sold within its borders. Prosper Economic Development Corporation-Type A levies 0.50%. Prosper Crime Control and Prevention District levies 0.25% Prosper Fire Control, Prevention and Emergency Medical Services District levies 0.25% 24 Sales Tax 8.25% Collected in the Town 25 GF 1% Sales Tax Historical Net of TIRZ & Projected Collections 26 Fiscal Year Sales Tax Collections % Change FY 2015-2016 $2,796,393 28.79% FY 2016-2017 $3,509,444 25.50% FY 2017-2018 $4,424,976 26.09% FY 2018-2019 $4,870,250 10.06% FY 2019-2020 Estimate $5,421,710 11.32% FY 2020-2021 Current Estimate $5,584,361 3.00% WATER AND SEWER FUND 27 Water & Sewer Fund Revenue Projections 28 NET ASSETS AND RESERVE POSITIONING FUND ACCOUNT TYPE ACTUAL 2018-2019 AMENDED BUDGET 2019-2020 PROJECTED 2019-2020 PRELIMINARY ESTIMATE 2020-2021 REVENUES Water Charges for Services 12,015,127 13,623,413 13,357,448 14,203,322 Sewer Charges for Services 6,769,595 7,051,798 7,128,716 8,012,010 Sanitation Charges for Services 1,292,434 1,460,230 1,466,650 1,622,200 License, Fees & Permits 172,056 54,258 176,000 171,000 Water Penalties 1,575 1,675 1,500 1,500 Utility Billing Penalties 142,650 112,200 50,000 112,000 Investment Income 221,556 142,024 130,000 55,000 Other 144,138 2,508,028 2,331,998 327,661 TOTAL REVENUES 20,759,131$ 24,953,626$ 24,642,312$ 24,504,693$ Water-Sewer Rate Plan Rate Model 29 •Each budget cycle,staff reviews the adopted rates to see if parameter of financial stability are met. •Must maintain minimum of 25%of annual operating expense •Must target minimum 1.25 debt coverage per debt management policy •The Water/Sewer Fund has performed well due to: •Accelerated customer account growth •Capital Plan Management Staff recommends no increases to water or sewer rates for Fiscal Year 2020/2021 Town Council Priorities •Discussion on Council priorities for fiscal year 2020-2021 budget 30 CAPITAL IMPROVEMENT PROJECTS 31 Recently Completed & Under Design 32 Recently Completed & Under Design $189,024,041 Completed Next 5 Years 33 Recently Completed & Under Design $189,024,041 Completed Next 5 Years $717,721,866 WWTP Completed Beyond 5 Years Completion Beyond 5 Years $14,000,000 Recently Completed & Under Design $189,024,041 Completed Next 5 Years $717,721,866 WWTP 35 Town CO Debt Other Town Non Town Project Name Funding Funding Funding Fishtrap, Segment 4 (Middle - Elem): (Construction)2,750,000$ Frontier Parkway (DNT - SH 289): (Design & Construction)5,750,000$ 24,162,496$ FM 1461 (SH 289 – CR 165): (TxDOT)175,000$ US 380 (US 377 – Denton County Line): (TxDOT)105,000$ 178,000,000$ FM 2478 (US 380 – FM 1461): (TxDOT)57,000,000$ TOTAL FUNDING SOURCES:8,500,000$ 280,000$ 259,162,496$ TOTAL STREETS PROJECTS: STREET PROJECTS 267,942,496$ 36 Town CO Debt Other Town Non Town Project Name Funding Funding Funding Traffic Signal - Fishtrap & Artesia Boulevard: (Design)25,000$ 25,000$ Traffic Signal - Fishtrap & Artesia Boulevard: (Construction)212,500$ 212,500$ Traffic Signal - FM 1385 & Fishtrap: (TxDOT)250,000$ TOTAL FUNDING SOURCES:-$ 237,500$ 487,500$ TOTAL TRAFFIC PROJECTS: TRAFFIC PROJECTS 725,000$ 37 *Park Development Agreement Town CO Debt Other Town Non Town Project Name Funding Funding Funding Lakewood Preserve: (Construction)*544,500$ Hays Park: (Construction)375,000$ Windsong Park #2: (Design)*30,000$ Windsong Park #2: (Construction)*230,000$ Pecan Grove Park Phase #2: (Construction)575,000$ Windsong Hike and Bike Trail (Phases 5-7): (Design)*40,000$ Windsong Hike and Bike Trail (Phases 5-7): (Construction)*435,000$ Downtown Monument (Broadway/Preston): (Design)45,000$ Downtown Monument (Broadway/Preston): (Construction)80,000$ 300,000$ TOTAL FUNDING SOURCES:-$ 2,354,500$ 300,000$ TOTAL PARK PROJECTS: PARK PROJECTS 2,654,500$ 38 Town CO Debt Other Town Non Town Project Name Funding Funding Funding Westside Radio Tower for Communications 500,000$ TOTAL FUNDING SOURCES:500,000$ -$ -$ TOTAL FACILITY PROJECTS: FACILITY PROJECTS 500,000$ 39 Town CO Debt Other Town Non Town Project Name Funding Funding Funding LPP Water Line Phase 2 Easement Costs 1,000,000$ TOTAL FUNDING SOURCES:-$ 1,000,000$ -$ TOTAL WATER PROJECTS: WATER PROJECTS 1,000,000$ Town CO Debt Other Town Non Town Project Name Funding Funding Funding Doe Branch Parallel Interceptor: (Design)500,000$ Doe Branch Parallel Interceptor: (Construction)3,500,000$ 1,000,000$ TOTAL FUNDING SOURCES:3,500,000$ 1,500,000$ -$ TOTAL WASTEWATER PROJECTS: WASTEWATER PROJECTS 5,000,000$ 40 Town CO Debt Other Town Non Town Project Name Funding Funding Funding Coleman Street Channel Improvements: (Construction)400,000$ Old Town Regional Retention Pond #2 - Land Acquisition 385,000$ TOTAL FUNDING SOURCES:785,000$ -$ -$ TOTAL DRAINAGE PROJECTS: DRAINAGE PROJECTS 785,000$ Strategic Planning Update 41 Strategic Planning Update Town of Prosper 2030 Vision Prosper is a community committed to excellence.It is a high quality,family-oriented community maintaining a visually aesthetic open feel with job-producing,economically sustainable commercial development directed to the Town’s major transportation corridors,all while maintaining strong fiscal responsibility,and meeting the infrastructure needs of the Town . 42 Goal 1 Maintain Community Character Goal 1a Ensure Quality Development Goal 1b Maintain Safety and Security Goal 1c Provide Efficient and Effective Utilities, Roads and Infrastructure Goal 2 Maintain a Quality Town Workforce Goal 3 Ensure Fiscal Stewardship Goal 4 Maintain Proactive Communication to Engage Residents and Stakeholders Goal 5 Provide Quality Recreation Opportunities and Town Facilities. Goal 5a Maximize Recreation and Leisure Opportunities: Goal 5b Improve Town Facilities Goal 6 Engage in Effective Intergovernmental Relations 43 Strategic Planning Update Town of Prosper Strategic Goals Strategic Planning Update Major Initiatives 44 13 Complete 18% 44 In progress 60% 13 On-going 18% 3 On hold 4% 73 Total 100% 45 •Passed by Congress on March 27th, 2020 •$2 trillion economic relief package due to COVID-19 •Intended to provide fast and direct economic assistance to workers, families, and small businesses •$150 billion allocated to the Coronavirus Relief Fund (CRF) for state, local, and tribal governments Coronavirus Aid, Relief, and Economic Security (CARES) Act •$3 million for COVID-19 testing for uninsured individuals •$5 million for personal protective equipment (PPE) •$45 million for housing (rent and mortgage), utilities, and food assistance •$5 million to help re-stock local food pantries •$50 million to cities for COVID-19 costs and recovery efforts •$40 million for county COVID-19 costs •$23 million reserved for future costs 46 Collin County CARES Act Funding Allocation $171 million •$45 million to cities based on population = $55 per capita •$24 million allocated for local business grants •$20 million for housing assistance •$10 million for food programs •$6 million estimated expenditures to date on COVID-19 •$2 million to support nonprofit efforts •$40 million for ongoing county expenses, PPE, Public Health 47 Denton County CARES Act Funding Allocation $147 million 48 Town of Prosper CARES Act Allocation Collin County $1,098,850.23 Denton County $245,300.00 Total $1,344,150.23 49 Eligibility Criteria •Necessary expenditure due to COVID-19; •Expense must not be accounted for in the Town’s most recent approved budget; and, •Expense must be incurred and paid between March 1, 2020 and December 30, 2020. 50 CARES Act Expenses •Personal Protective Equipment (PPE) •Sanitation supplies & services •Expenses to improve teleworking capabilities •EOC equipment •Medical equipment •Communication expenses •Expenses to facilitate social distancing •Emergency sick leave and FMLA leave 51 Next Steps •Approve Denton County ILA on June 23 •Expend funds by December 30, 2020 •Provide required documentation to counties Retention Pond Fountains 52 Purpose of Fountains / Aerators •Increase fish / pond health, •Reduce non beneficial aquatic plant growth, •Aesthetics, •Mosquito control. 53 54 Pond Fountains Pro’s •Looks nice, •Ambient background noise, •Some aeration of water, •Water movement at the fountain. Con’s •Can be expensive to maintain, •Can be expensive to operate, •Limited amount of air introduced into the water, •Increases evaporation, •Limited water movement, •Water stratification can still exist. 55 Pond Aerators Pro’s •Most air introduced into the water, •Gentle pond water circulation, •Cools water in warmer months, •Less susceptible to beaver damage, •Better pond / fish health, •Operation and maintenance cost are less than fountains, •Less chemicals used to treat algae. Con’s •Not as aesthetic as a traditional fountain 56 Recommendation •Use fountains where that visual effect is desired and delivers the most bang for the buck, •Use aerators in ponds to improve pond / fish health. Executive Session Recess into Closed Session in compliance with Section 551.001 et seq. Texas Government Code, as authorized by the Texas Open Meetings Act, to deliberate regarding: Section 551.087 –To discuss and consider economic development incentives. Section 551.072 –To discuss and consider 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. The Town Council Meeting will resume after the Executive Session. Reconvene in Regular Session and take any action necessary as a result of the Closed Session. Possibly direct Town staff to schedule topic(s) for discussion at a future meeting. Adjourn.