Good afternoon.

Welcome to your four city council budget work session.

I'm just gonna ensure that council member peoples can hear us okay.

Deborah, can you hear us?

Give me a thumbs up.

No, I don't think she can hear us.

Maybe not.

Okay.

If staff can maybe text with her and make sure she's okay to hear, that'd be helpful.

Thank you.

Okay, I'll gavel us in.

Welcome to work session, and I'll turn it over to Jay Choppa.

Mayor and Council, good afternoon.

I'm gonna start here just now and then I'm gonna move up to the podium.

But I'm gonna kick off the presentation.

Uh and its primary focus of my portion of the presentation is a general fund and all the issues that we've been talking about.

And then I'll kick it over to Christiane, who will go over the broader budget and then also go into more detail in some of the general fund side of things.

Um so I'm gonna move up to the podium to do the presentation.

Can you hear me?

It's on I can't hear.

Councilwoman, can you hear us?

Don't take me off camera.

Yeah, it's still okay.

Are we ready?

Okay, go ahead, please.

Okay, as you know, Fort Worth continues to grow rapidly over the last 10 to 12 years.

That growth has allowed the city to sustain and even improve the level of city services as we go forward.

Um over that period of time, our residents have consistently approved bomb packages on a four-year cycle.

The city council has increased funding for capital maintenance and has made impactful investments to services like incorporating the EMS into the fire department and furthering the city's open space and homelessness programs.

Unfortunately, this year we have a different story.

This year we're faced with a different situation when it comes to the city's general fund.

Our property tax revenues are not keeping pace with the city's expansion.

This year's valuation landscape is unusually difficult as growth and a growing local economy is not translating into increased taxable value.

Inflation and contractual obligations coupled with the lack of a price value growth in Terran County has added uncertainty that affects both our operating budget and the long-term debt capacity.

The general budget, general fund budget as proposed, attempts to strike a balance between reducing costs and minimizing services levels with modest revenue increases that allow us to continue moving forward and enhance resources in the public safety to keep up with growth and council demands and overall demands, not council demands.

So as we know, we have a deteriorating property tax landscape.

And really the main the main reason for that is we've we had over two billion dollars in new value to the tax rules, yet our overall valuation was basically debt, was basically flat because of the diminished existing valuations of the existing residential properties.

So to be fiscally responsible, we have to, as I mentioned, we have to balance both expenditures and revenues.

And this budget includes fee increases were needed to pay the cost of services, and all those reduced because of the reduction of the actual existing valuations, pay-go is maintained at its current value so that we can sustain our cash investments in the infrastructure.

The static debt service is also kept, this uh debt service rate is also kept where it is in order to support our future bond capacity.

Budget increases are tied across in this in this uh budget to public safety departments primarily, the addition of personnel and a placeholder for the new labor contract to meet the city the city's continued growth.

Maintained investments in the in critical areas, including capital maintenance, neighborhood investment through our code compliance department, resident engagement, and critical support for state required public information process is also increased, and we attempt to minimize those service level impacts across the core city's departments.

So here before you is the general fund recommended budget.

You can see it's a 4.6% overall increase in both revenues and expenditures, so it's balanced.

The main increases on the revenue side is sales tax, which is almost 5% increase, is our projection, and property tax with an increased property tax rate is 2.84% increase.

The expenses driving that are really tied to salary and benefits, primarily tied to public safety, uh civil service positions, and to the health costs, the the cost of health benefits for all employees.

When you look at our July certified values, the final values were higher than were lower than we predicted, or worse off than we predicted, and so our overall property tax income was basically flat.

It was a 0.89% increase in values.

That actually translates to fewer dollars when you use the current tax rate because of the loss of projected loss of revenues during the tax year from litigation and additional from litigation from companies and people that protest their values.

So the overall FY 2027 values are 130 million.2% increase in the tax rate, and I'll get into details here and how we got to this, as well as the average tax bill.

So this would take our tax rate from 67 cents to 70.2 cents.

At the end of the day, increases the overall base, if we were when you put it all together by 18 million dollars.

As you know, the tax rate is divided into two areas: the debt service rate and the operation and maintenance rate.

The debt service rate is staying static.

We're here in Fort Worth, we then break out the capital rate we call pay-go and the operations portion, and the full 3.2 cents is being applied to the operations side, and pay go stays at the 7.25% tax rate.

This chart depicts a history of our tax rate overall for the last 35 years, more or less, 36 years.

You can see since 2015, we've basically seen a sharp decrease in our tax rate as we saw the growth of the city, the growth in values as we went through this whole process.

The proposed increase takes us basically back to the 2023 tax rate.

Also, juxtaposed against this is the brown line that shows our population at the city's growth.

So the average taxpayer in Fort Worth, when you apply all of the you take the average home taxable value, which includes all the exemptions that would qualify for, last year that value was 246,000.