Staff presented this material to the Anna City Council on the many challenges and concerns for FY19/20, to get feedback and consensus to prepare the annual budget. Later in the year the actual budget will be presented for review, approval and implementation.

1. City of Anna
Budget Work Shop FY19/20
July 25, 2019
6:00PM
Fire Station Training Room
Building
Anna Texas
One Step at
a Time!
Looking to
the future!

2. Always keeping our eyes on the ball!

3. Introductions/Comments
New Staff Rooles,
Reorganized Structure
New Opportunities, New
Processes, New
Adventures…
Agenda for Tonight! One STEP at a time!

4. ONE STEP AT A TIME…
The efforts
targeted here are
the foundation
for a recovery
plan; it is the first
STEP of many!
No overnight results
are anticipated; It
took years to get
here; it will take a
while to achieve our
strategy, but we are
relentless in our
mission.
These efforts will
stop the
hemorrhaging and
begin to repair not
only the structural
and systemic issues
but the culture as
we build a family
that serves our
neighbors.
We will do this
One
Small
Town
Evolution
Plan
at a time…
4

5. Tonight’s
Agenda
• Strategic Plan & Master Planning Efforts
• Financial Resources & Constraints
• Challenges and Opportunities
• Tax Rates & Available Funding
• Utilities
• Legislative Initiatives
• Supplementary Departmental Requests
• City Manager Recommendations &
Priorities
• Things on the Horizon
• Community Outreach
• Bond Election
• Accomplishments & Goals
• Questions (for you)
• What’s Next?

6. Strategic Plan

7. CityofAnna
StrategicPlan
Comprehensive
Plan
Zoning & Land Use
Growth
Management
Downtown
Thoroughfare
Parks & Trails
Utility
Rate Study
Stormwater
Economic
Development
Financial Plan
GIS/Mapping
Infrastructure
Transportation
Regionalism
Master Plans
Tying it all together is essential to community success…
These elements are just several of those to be considered.

8. Financial
Constraints/Concerns
• Financial policies (need to be updated &
revised)
• Operational balances from FY19 (need to be
determined before final budget)
• Funds tied up in reserve (well over 50%
currently; financial policy is set at 25%)
• Funds available are needed for growth of
organization and desired programs
• Water rates (pass through expenses have not
been considered since 2015 or earlier)
• Stormwater funding ($0 funding with growing
needs and mandates imminent as population
grows)

9. Financial Policies/Practices
• Financial Reserve Policies (Establishing a Targeted Range; 25%-40%)
• Over-funded balances would be assigned to established funds for strategic
elements identified
Capital Projects Fund Grant Matching Funds
Employee Benefits Fund Code Compliance
Equipment Replacement Fund Operations Bridges (S.B.2)
Debt Service
• Beginning with Next Year Budegt Cycle – 2-Year Budgeting (Annually)
• Over the Next Year - Development of a 5-Year Financial Modeling for
more accurate forecasting and planning

10. Challenges & Opportunities to Address
• Pay Plan/Employee Compensation/Benefits
• 3.5% tax cap effective January 2020
• Software (ERP, Financial, etc.)
• Stormwater Utility
• Sanitation System
• Communications/Outreach
• Public Safety Staffing
• Parks Development Planning
• Comprehensive Plan
• Downtown Plan
• Parks & Trails Plan
• SAFER Grant & Other Grants Management
• Municipal Complex Funding
• Utility Expansion
• Inflows & Infiltrations
• Engineering Services Management
• Capital Improvement Planning
• Economic Development
• Development Code Re-Write
• Personal Policies and Procedures
• Administrative Policies and Practices
• Chamber of Commerce Partnership
• Events Planning and Expansion
• Staffing/Training/Development

11. Tax Rates & and other Numbers of Interest
• Current Rate = $0.591288
• Taxable Value = $1,304,938,519 (up from $1.2B)
• The projected Effective Tax Rate is $0.537068
The projected Debt Tax Rate is $0.139748
The projected Rollback Tax Rate is $0.559740
• If we had to do the 3.5% this year the effect would have reduced the
rollback rate to $0.54224 (an almost 4 cent cut in the tax rate)
effectively we would have little of no capacity for growth of the
organization.
• This year a penny on the tax rate yields approximately $130,500
• Average Home Taxable Value = $221,880
• Average City Tax per Home = $1,311.95

12. Available
Funding FY20
(Preliminary
Numbers)
• Assuming Rollback Rate:
• General Fund - $400,000
• Unfunded Reserve Drawdown - $1,200,000
• Year-End Operational Balances – To Be
Determined
• Assuming No Pass Thru or Rate
Adjustments
• Utility Fund - $0
• Stormwater - $0

13. Stormwater Utility
• Goals
• Public Outreach
• Public Participation/Involvement
• Illicit Discharge Detection and
Elimination
• Construction Site Runoff Control
• Post-Construction Runoff
• Pollution Prevention & Good
House-Keeping
• Revenue can be used for
staffing, projects, equipment,
materials, operational impacts,
debt service, planning and
engineering, related to
stormwater

14. Residential Stormwater Utility Monthly
Charges in North Texas
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
$11
$12
$13
TARGETED
RANGE

15. Utilities Challenges & Opportunities
• NTMWD Charges to City Projected at 21% increase
• In the last 5 years the City has not imposed a rate increase yet the
costs for NTMWD have increased during this same period of time.
• The result is:
• Diminished operational financial capacity of the utility
• No bonding capability for needed improvements, expansion or system
reinvestment
• Cost to provide services are headed to costing more than revenue generation
capacity
• Rate Study is needed to provide solid recommendation for pass
through expenses.

16. Utilities Challenges & Opportunities
• NTMWD Water Rates have increased 58.5% since 2014 without cost
recovery
• NTMWD Sewer rates have increased 24% since 2016 without cost recovery
• Overall NTMWD rates will increase 21% in this upcoming year which makes
up 50% of our water supply expenses
• Average Anna utility bill is $115.22
• Recovering 50% of the increase would provide sufficient revenue to
• Replenish the reserve to targeted proposed levels and solidify utility bond ratings
• Provide revenue for bonding needed projects, improvement and expansion (Impact
fees do not provide for all funds required to address capacity improvements and
needs; This is determined by state law.)
• Recovery through a rate increase as a component of a pass through resulting from
the NTMWD rate increases

17. Utilities Challenges & Opportunities
• Average bill is $115.22
• 10.5% increase brings it
roughly to $127
• Targeting any less mean you
are subsidizing the NTMWD
increase
• Targeting the midrange can
address the reserve and
provide for bonding capacity
to a limited degree
• CAUTION: price elasticity can change usage habits so a
rate study can help in the development of fresh tiers
to ensure we are successful in generating enough
revenue to maintain operations
96.23 98.81
115.22
119.35 121.38 121.41 121.92 123.75
145.74
PROSPER FAIRVIEW ANNA MELISSA VAN ALSTYNE LITTLE ELM CELINA HOWE PRINCETON
FY 2019 Average Bill/6,000 Gallon Consumption
TARGET
MID-RANGE
$121-$122

18. Legislative
Initiatives/Impacts
• S.B.2 – 3.5% rollback cap - The bill lowers the city
property tax rollback rate (now called the “voter-
approval rate) to 3.5 percent, with an automatic election
required to exceed that percentage. (January 1)
• H.B.2439 - building materials (September 1)
• S.B. 1303 – City and ETJ Mapping and Notice provides
that every city must maintain a copy of the map of city’s
boundaries and extraterritorial jurisdiction in a location
that is easily accessible to the public
• S.B. 944 – Public Information Act/Temporary Custodians
- Personal use of phone etc. (September 1)
• S.B.1152 – allows cable and phone companies to stop
paying the lesser of their state cable franchise or
telephone access line fees
These items may have financial impacts.

19. Departmental Supplementals
• Preliminary requests from all departments
• $2,100,000
• Staffing Requests - $1,070,000 (of the $2.1M)
• 26 staff in total all funds
• 7 for SAFER if awarded (included in the 26)
• Non-Staff Related Supplemental Requests - $940,000
• Priorities
• Pay Plan
• Municipal Complex
• Financial Software
• Master Planning Efforts
• Public Safety and Park Staffing
• More on next page….

20. City Manager
General
Recommendations
• Strategic Plan Focus
• Pay Plan/Classifications (amount to be
determined in August 2019)
• Municipal Complex
• Comprehensive Plan and Related Elements
• Public Safety Staffing, Planning & Equipment
• Financial Software (HIGHEST URGENCY)
• Growth Management/Economic Development
• Planning for EMS transition
• Parks & Parks Staffing
• Yet “Items on the Horizon” will remain unfunded…

21. On The Horizon (Currently Unfunded)
• Economic Development Funding/Marketing Plan/Website/Etc.
• Sidewalks & Trails
• Thoroughfares
• Traffic Signals
• MS4 Permit & Funding
• Library
• Community Center/Recreation Elements
• Public Safety Buildings (west of 75)
• Parks
• Beautification/Art/Entryway/Landscaping
• Engine 2/Quint/Ladder Truck
• Major Utility Improvements
• Downtown
• More…

22. CIP Community Outreach
• Neighbors Survey
• Outreach Meetings and
Charettes
• Development of strategies to
propose to desired projects,
programs & facilities City-wide
to fulfill the adopted strategy
• Community Education Efforts
• Bond Election in May 2020
• Declare by February for May
Election
ADMINISTRATION,
$0.28
CITY COUNCIL ,
$0.03
CITY MANAGER'S
OFFICE, $0.23
CITY SECRETARY,
$0.06
FINANCE, $0.19
DEVELOPMENT,
$0.44
ANIMAL CONTROL,
$0.03
FIRE, $0.63
AMBULANCE, $0.05
POLICE, $0.98
MUNICIPAL COURT,
$0.05
PARKS, $0.21
STREETS, $0.36
ECONOMIC
DEVELOPMENT,
$0.04
GENERAL FUND SERVICES - COST PER DAY

23. Bond Election Strategy for Success
• Strategic Goals for
Bond Election Success
• Financially Sustainable
Goals
• Foundational Values for
Success
• Community Priorities
• Driven for Results

24. Organizational Accomplishments
• Acquisition of key staff
• Fire Chief
• Assistant (2CM)
• Economic Development Team
• Code Compliance Manager
• Public Works Director
• Community Services Managing Director
• Police/Fire staff
• Sherley Heritage Park Conceptual Plan (Playground, Pavilion,
Bathrooms, etc.)
• Fire Truck Acquisition
• New Audit Firm Acquisition
• Anna ISD Joint Meeting
• HOA meetings with Mayor and City Manager
• Award Winning Public Works Water Line Project (Texas Public
Works Association)
• Ferguson Parkway Grant Negotiation (NCTCOG)
• Public Right-of-Way Mowing Enhancements
• Water Tower Logo/Lighting
• Project Ground Breaking/Grand Opening Process
• Establish Development Review Committee
• On-Line Code
• Library Development Committee
• Hurricane Creek
• PID/TIRZ
• Sherley Tract Integration Redesign (In Process)
• Municipal Complex
• TMRS Revision
• Q12 Employee Survey & Operational Action Plan
• Quarterly Meetings with Staff
• Operational Updates
• Council & Candidate Orientations
• Boards & Commissions Selection Process
• Initiation of Pay Plan Study
• Social Media Development & Presence
• Numerous Operational Corrective Actions & Reorganizations
• City of Anna Strategic Plan
• This list grows daily…

25. Questions/Results
Policy Items Yes or No?
Rollback Rate Hold Current Rate for FY2020
City Manager General Recommendation Yes (Priorities as Identified)
Bond Election Elements for May of 2020 Yes (Start Process)
Utility Rate Study/NTMWD Pass Through Cost Recovery Yes (Midrange Target)
Stormwater Utility Yes ($3-$4)

26. What’s Next?
Upcoming
Budget Dates
August 13th –
Draft budget presented to
Council
Vote on Max Tax Rate & Set the
Date and Time for the Public
Hearings on the Tax Rate
Set the Date & Time for the
Public Hearing on the Budget
August 27th – 1st Public Hearing on the Tax
Rate
September 3rd –
Special Called Meeting
Public Hearing on the Budget
2nd Hearing on the Tax Rate
September 10th –
City Council to Adopt the Budget
City Council to Set the Tax Rate