Ask the Budget Guy | FY 2010-11



It has been stated that property taxes and other general fund revenues will not be used to pay the debt of the Entertainment Venue. Where will the money come from if the dedicated revenues are not sufficient to pay the debt?

The city’s 7 percent hotel occupancy tax will be pledged to repay the bonds in the event that anticipated revenues and contingencies are insufficient.

Is it true that the decrease in tax revenue is in part due to the Heritage Crossing project, in that so many dwellings/buildings were removed and now sit as vacant land at a lower taxable rate?

When compared to the value lost, the demolitions in South Irving are not significant enough to affect the tax rate. The majority of the tax revenue decrease is from commercial properties in North Irving. The decline in value for office buildings is driven by reduced occupancy and leasing rates, which have decreased the revenue generated by those properties. As was seen in the 2001 recession, Dallas Central Appraisal District valuations are driven by the revenue potential of commercial properties and are expected to improve in tandem with the national economic recovery.

Are any city departments over budget for the current year?

No. All departments are below their expenditure budgets for the current year. Furthermore, all departments have budgeted less and reduced expenditures, where possible, for the coming fiscal year as well.

If Code Enforcement is a key focus area for the city, why does the budget show funding for five fewer code enforcement personnel in the coming year?

While the department budget shows five fewer positions, this includes only one code inspector and one building inspector. Four of the five positions were vacated during the past year and are being held vacant as part of a citywide effort to reduce expenditures.

Code Enforcement continues to be a key focus area for the city and resident satisfaction has increased. Staff is maintaining a high level of efficiency while reducing the budget and holding vacancies. We have shifted work schedules to have code enforcement officers available to respond on evenings and weekends, and we have implemented programs such as the volunteer-driven Code Cadet program and targeted neighborhood enforcement. The department also is using community services workers to help enforce city ordinances.

How much does the City of Irving receive in revenue from the company that operates Twin Wells Golf Course? Where is that reflected in the city’s records?

For FY 2010-11, $200,000 in revenue is being projected from Twin Wells Golf Course. This revenue is included in the General Fund’s Recreation revenue category.

Are any funds allocated in the FY 2010-11 budget for improvements along Irving Boulevard between the Trinity River and Loop 12?

Funding has been authorized in the amount of $310,000 through a Keep Irving Beautiful grant from the Texas Department of Transportation for landscaping and median improvements. A monument sign is not included in the current budget, but may be added in the future as funding allows.

What is the status of the Texas Stadium site redevelopment? Is the $2 billion “Sky Park” project on hold?

The city continues to receive interest from developers for the redevelopment of the stadium site. The Sky Park proposal was one of several concepts that the city has received. Any future redevelopment will take advantage of the mass transit infrastructure and highway improvements being put in place today. In the interim, the city has contracted with the Texas Department of Transportation (TxDOT) to use the stadium site as a construction staging area.

The city is working with TxDOT on a concept bridge that will include pedestrian access and landscaping. The bridge will connect the stadium site to the proposed DART Orange Line station site located directly across State Highway 114. Like many TxDOT projects, funding for the actual project will be identified once the design is further along and the project is closer to “shovel ready.”

Is everything paid for from the General Fund?

No. While the General Fund is the main operating fund of the city, Irving has more than 120 funds, which are separate due to state and federal regulations, accounting best practices or because of decisions of the City Council.

Including the General Fund, there are nine main funds that comprise the majority of city operations:

Summary of Operating Expenditures for Major Programs

Fund/Program 2009-10 Adopted Budget 2010-11 Proposed Budget
General Fund $176,362,533 $169,505,476
Water and Sewer $81,812,269 $84,128,881
Solid Waste Services $11,622,026 $11,723,038
Municipal Drainiage Utility $4,646,044 $4,883,382
HOT Revenue Funds    
ICVB $6,327,498 $6,046,256
Arts Center $4,424,410 $3,891,693
Main Street and Events $113,799 $115,173
Heritage and Museum $368,423 $244,846
Total HOT $11,234,130 $10,297,968
Housing and Human Services $8,655,743 $3,901,254
Total Major Funds $294,332,745 $284,439,999


Please provide a listing of the departmental budgets for FY 2010-11.

For the General Fund, departmental budgets for FY 2010-11 total $169.5 million.

  2009-10 Budget 2010-11 Proposed Budget
Goal 1 - Land Use
Planning and Inspections

$2,555,893

$2,448,157
Goal 2 - Vibrant Neighborhoods
Code Enforcement

$2,997,901

$2,475,560
Goal 3 - Economic Development
Economic Development

$970,705

$854,614
Goal 4 - Public Safety
Police
Fire
Municipal Court Services
Animal Services

$51,858,535
$35,508,219
$2,798,365
$1,275,035

$49,047,936
$32,621,402
$2,775,564
$1,490,681
Goal 6 - Effective Communications
Corporate Communications

$3,378,268


$2,727,380
Goal 7 - Culture, Recreation and Education
Parks and Recreation
Library Services

$15,672,238
$6,916,717

$12,420,322
$6,192,199
Goal 8 - Sound Governance
Mayor and Council
City Secretary's Office
City Manager's Office
Financial Services
Management Operations
Non-Departmental
Performance Team
City Attorney's Office

$215,566
$1,067,421
$829,178
$2,108,551
$0
$21,523,024
$2,792,583
$2,186,832

$201,632
$981,346
$755,766
$3,239,544
$956,175
$22,919,521
$808,082
$2,040,682
Goal 9 - Infrastructure
Capital Improvement Program
Transportation
Information Technology
Intergovernmental Services

$8,491,243
$3,368,110
$7,671,806
$2,176,343

$6,732,716
$7,755,725
$7,725,124
$2,334,349
Total Expenditures $176,362,533 $169,504,476


How much of the increase in the municipal services bill goes to the General Fund?

The only portion of the municipal services bill that goes to the General Fund is the franchise fee on water, sewer and sanitation revenues. For an average residential customer, the franchise fee should increase by $0.06 per month.

What happened to the $12 million in savings that have been realized over the past four years?

Operating savings have been used to offset revenue declines in the past two budget cycles and help the city reduce costs while maintaining service levels. Over the past two years alone, Irving has seen a reduction of $20.2 million in General Fund revenues. Property tax revenues alone have fallen by $10.3 million. For FY 2009-10, savings were used to help balance the budget without changing the tax rate. For the FY 2010-11 budget, process savings, vacancy savings, deferral of capital and maintenance, and other departmental reductions were insufficient to balance the budget due to continued revenue declines. An adjustment to the tax rate was necessary to balance the budget without reducing services.

How many employees work for the City of Irving?

For the FY 2010-11 Budget, 2,270 full-time, part-time and seasonal positions are authorized. This includes 62 positions that remain authorized but will be unfunded next year due to budget constraints. Holding these positions vacant will save $4 million.

Is Irving self-insured? How much does health insurance cost the city?

The City of Irving’s health insurance program is self-funded. The city is responsible for payment of claims using premium dollars contributed by the city and employees who are covered by the program. The city contracts with an insurance company as a plan administrator to provide access to medical providers and pay claims. For the past three years, the total cost for health insurance has been:
  • FY 2006-07–$15.9 million
  • FY 2007-08–$16.7 million
  • FY 2008-09–$19.9 million


How much of the budget goes toward the Heritage Crossing project?

The Heritage Crossing Project is budgeted in the Economic Development Fund. For next year’s budget, the Economic Development Fund has allocated $384,000 for the Heritage Crossing redevelopment project.

Why doesn’t the city match tax increases with a dollar-for-dollar operating expenditure reduction?

We have. In fact, the City Manager’s Budget proposes a two-to-one reduction in expenditures so that $2 of expenditure cuts are made for every $1 of tax revenue increase. In addition, the City of Irving has reduced expenditures without decreasing services to the residents by holding vacant positions, looking for cost savings in all programs, and deferring all but the most essential capital, equipment replacement, computer replacement and maintenance projects.

If taxes are increased due to lower property values, will the city ever reduce taxes?


We have before. In fact, the city has not increased the tax rate since 2004, which was more than seven years ago. In 2007, the city actually lowered the tax rate by 0.73 cents after property values recovered after the 2001-2004 recession.

Last year, revenues also declined due to appraisal value decreases. Council and management did not increase the tax rate to the effective rate, but instead maintained the 54.06 cents tax rate for another year.

Since the property tax accounts for 40 percent of general revenue, it is the main funding source for Police, Fire, Public Works, Libraries, as well as Parks and Recreation services.

Has the city manager received a raise this year?

No. Though City Council provided the city manager with a favorable review during his last evaluation in July 2010, he did not receive a salary adjustment. The salaries of city staff, including the city manager, are evaluated by City Council on an annual basis.

How is the city reducing expenditures?

Over the past four years, the city has made several reorganizations and reassigned job duties to reduce costs of service and eliminate duplication of services among departments. Every program in the city is being reviewed to identify cost savings and find ways to reduce administrative costs without affecting the quality of service. The city is now holding more than 62 positions vacant and does not plan to fill these positions in the next year. This will save the city approximately $4 million in salary and benefit costs.

Why doesn’t the city reduce services to ease the tax burden on residents?


Through surveys, town hall meetings and budget input hearings, the majority of residents have indicated that they wish to maintain the level and quality of services received from the city. As a result, the city has not reduced hours at any library, recreation center or aquatic center.

The city also is mindful that in times of economic hardship, there is an upsurge in the use of city facilities as people look for lower cost alternatives for recreation and entertainment. An example of an excellent, low-cost service is the city’s after-school program. For $180 per six weeks, city staff will pick up students at their elementary school and transport them to a recreation center. The after-school program provides participants with a snack, tutoring, recreation and supervision from 3 to 6 p.m. each school day. The cost of this program averages $2 per hour, which is half the cost of similar private-sector after-school programs in Irving. Reducing such programs would have a negative impact on Irving residents who are least able to afford it.

In sum, the proposed budget reduces costs without significant impact to services, and enables the city to provide residents with high-quality services at a good value.

How much will my taxes increase under the proposed budget?

According to the Dallas Central Appraisal District, the value of an average home in Irving fell from $129,434 last year to $127,193. Overall residential properties in Irving fell by 0.77 percent. Calculated on the average residential home with a 20 percent homestead exemption, the proposed tax adjustment to 57.61 cents would increase the tax bill by $26.43 per year or $2.20 per month. Whether taxes on an individual property go up or down depends on the change in that property’s appraisal.

How are tax revenues decreasing if the city is raising the tax rate?


For the upcoming budget year, the taxable value of all properties in Irving has declined by $919 million or 5.15 percent. Tax revenues collected at the existing rate of 54.06 cents would result in a decrease in general fund revenues of $6.4 million.

The rate necessary for the city to receive the same amount of revenue from existing properties as in the previous year is called the “effective tax rate.” This rate has been calculated by the Dallas Central Appraisal District as 5.12 cents above the current rate or 59.18 cents.

The city’s proposed rate of 57.61 cents is well below the effective rate of 59.18 cents, so the city will still collect less revenue than last year. Whether taxes on an individual property go up or down depends on the change in that property’s appraisal.

Why are my taxes so high?


Irving residents enjoy one of the lowest tax rates in the North Texas region. Taxes imposed by the City of Irving are necessary to provide funding for government services and account for only 22 percent of a resident’s total tax bill. School taxes are the largest component of the total tax bill at 54 percent, and the remaining 24 percent is assessed by Dallas County, Parkland Hospital District and Dallas County Community College.

In an article featured on The Dallas Morning News website on August 11, 2010, the City of Carrollton reported the results of a study that examined the total cost of all city services, including the tax rate, water and sewer rates, drainage fees, sanitation and recycling rates for Metroplex cities. Of the 19 cities included, Irving was the third lowest, just ahead of Addison and Farmers Branch. When compared against the 10 largest cities in the Metroplex, Irving had the lowest overall cost of service. Individually, Irving has the second lowest tax rate, and has the lowest water and sewer rates among the top 10 cities.