Consideration of and action on amending the Fiscal Year 2017 budget to projections and approving the Fiscal Year 2018 budget

On September 25, 2017, the Board of Directors for Tax Increment Reinvestment Zone No. Four (TIRZ No. 4) approved a recommendation to the City Council for approval of amending the Fiscal Year 2017 budget to projections and approval of the Fiscal Year 2018 proposed budget. This recommendation was made in accordance with City Ordnance No. 1768, the Zone's creation ordinance which grants final budget approval to the City Council.

Fiscal Year 2017

Though Fiscal Year 2017 has closed, actual numbers will not be finalized until all accounts have been audited. The FY17 amendment is to update the budget to projections, which are based off actuals as of September 1, 2017. The Zone is anticipated to collect $591,834 in incremental taxes in FY17 with an estimated $7,080 in interest income, bringing total revenues to $598,913, which is a $39,545 increase from the budget. This increase in revenue is due to the County receiving payment on a long-overdue account. Expenditures are projected at $73,167, which is a $6,833 decrease from budget. The expenditures include $30,000 for administrative services and $43,167 for legal services. As a note, of the $43,167 encumbered for legal services, only $368.90 has been spent to date. This leaves a fund balance of $1,558,866, which is $100,250 higher than budgeted due to a combination of increased revenues, decreased expenditures, and an ending FY16 fund balance that was $53,872 higher than anticipated.

Fiscal Year 2018

Revenues for FY18 are estimated based on the proposed tax rates for each participating entity and the certified tax roll from the Fort Bend Central Appraisal District, including any values still under review at 90% as well as any abatements and exemptions. Total revenues are estimated at $718,295, including interest income. The FY18 property tax revenues are based on the following incremental values and proposed tax rates:

*MUD 138 and MUD 139 contributions to the Zone are equal to the amount collected on one half of the City’s tax rate

Proposed expenditures for FY18 total $100,500, of which $50,500 is available to the City for administrative services through the Support Services Agreement with the Zone. The remaining $50,000 is for legal services. The FY18 proposed budget shows an ending fund balance of $2,176,661. It is important to note that while this fund balance may seem high, it is necessary to build up the fund balance in order to implement the Project Plan, with the first priority project being structured parking.

Staff recommends the approval of amending Fiscal Year 2017 from budget to projections and approving the Fiscal Year 2018 budget as proposed.