FY22 Budget Executive Summary
On Sept. 16, Irving City Council adopted the Fiscal Year 2021-2022 (FY22) budget based on $0.5941/$100 valuation, which remains unchanged for the last eight years. The pandemic impacted operations and services across the organization, and the city’s structurally balanced FY22 budget addresses citywide staffing shortages, critical infrastructure needs, operational efficiencies and service level enhancements.
Irving experienced the effects of the global COVID-19 pandemic like other cities around the world and nation, but the overall impact was less detrimental and recovery was faster than previously expected. The City of Irving was in a strong financial position because of sound fiscal management by the visionary leadership of City Council. The budget continues to provide a conservative fiscal approach to service delivery that addresses critical needs identified in operations, public safety and infrastructure.
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FY22 ALL FUNDS COMBINED
The FY22 total budget is $798.3 million which is $110.4 million more than FY21 or 16.05 percent. Notable changes causing the increase include:
- Capital makes up the majority of the $110.4 million overall increase at $63.1 million or 23.0 percent from FY21. The budget includes funding for existing and new capital projects and equipment. Road to the Future and Drainage Solutions for a Better Tomorrow are existing capital projects funded in FY22. Significant projects from the new election included in the budget are the purchase of the Airport Property ($13.45 million), Mustang Recreation Center Expansion Land ($5.35 million), Arts Center Roof ($3.0 million) and Driving Skills/Training Pad in the Public Safety Joint Facility ($6.0 million).
- Salary adjustments prompted by a class and compensation study, a 1.5 percent Cost of Living Adjustment (COLA) and regular step and merit increases to ensure that employees are paid competitively to market - $6.7 million or 4 percent.
- Fire pension contribution rates are fully funded at the Actuarially Required Contribution (ARC) per agency requirements from savings from the proposed issuance of Pension Obligations Bonds – net adjustment of $1.6 million or 3 percent.
- Outside Services are increasing by $3.1 million or 37 percent primarily for the receipt of the American Rescue Plan Act (ARPA) Funds as a result of the impacts of the COVID-19 pandemic. Planned uses of the funding for FY 22 include hotel occupancy revenue losses, American with Disabilities (ADA) compliance initiatives, small business grants, affordable housing initiatives and Heritage District incentives.
- Miscellaneous increased by $9.1 million or 57 percent from FY21 primarily due to the increase in economic incentive agreements. The city’s participation rate in Tax Increment Reinvestment Zone (TIF) 1 has decreased from 70 percent to 60 percent, resulting in an increase of $1.3 million in revenue to fund economic development initiatives.
- The Debt Service rate for FY22 is $0.1300, a one penny shift from maintenance and operations (M&O) to fund the 2021 bond authorization of $563.4 million. Debt Service increased 1.3 million, or 49 percent, from FY21 for existing projects in streets, parks and city building improvements. The city plans to use $33.3 million from the remaining 2006 General Obligation (GO) bond authorization and $317 million from the 2021 GO bond authorization for funding projects related to city buildings, public safety, parks, libraries, and information technology. The total debt funded for the FY22 Capital Improvement Program is $277 million, which is an increase of $198.2 million from FY21.
- Interfund Transfers increased to $21.4 million, or 23 percent of the adopted budget. These interfund transfers are for debt service, equipment and capital projects.
FY22 General Fund
The FY22 General Fund, the operating fund of the city, is $244.6 million, or $11.7 million (5 percent) higher than FY21. The certified value increased to $32 billion from $29.6 billion in FY21.
- $448 million in new construction resulted in a 1.5 percent increase in values.
- Existing properties increased 5.56 percent.
- Total taxable value increased 7.06 percent.
- The adopted rate of $0.5941 will increase property tax revenue by $4.1 million or 3.7 percent.
Sales Tax (31.7 percent), the second largest revenue source of the General Fund, is budgeted at $76.8 million, an increase of $6.1 million or 9 percent from FY21. Irving was fortunate that sales tax revenues were not negatively impacted by the pandemic like other cities. FY22 Sales Tax Allocation is $633.4 million for Irving.
Out of every dollar spent on taxable goods and services in Irving, 8.25 percent of sales tax is generated and allocated to the State of Texas, Dallas Area Rapid Transit (DART) and the City of Irving.
- State of Texas – 6.25 percent – $479.8 million
- DART – 1 percent - $76.8 million
- City of Irving – 1 percent - $76.8 million
Both property tax and sale tax revenues account for 79.2 percent of the General Fund revenues. Of the $11.7 million (5.0 percent) increase, property tax and sales tax make up $10.2 million of the increase. Other General Fund revenues continue to be depressed by the coronavirus pandemic.
The average single family taxable home value in Irving increased from $209,809 to $220,694 representing a 5 percent increase or $10,885. This increase in taxable value results in an increase in tax liability regardless of the lowered tax rate.
Irving residents are served by one of three independent school districts: Irving ISD, Carrollton-Farmers Branch (CFB) ISD or Coppell ISD. The total tax liability is impacted by school district and county which the residence is located. The city offers a homestead exemption of 20 percent and a senior (aged 65 and older) exemption of $45,000.
FY22 Total Property Tax Bill based on an average single-family home - $220,694.
The city has total authorized positions of 2,443:
- Full-Time – 2,049
- Part-Time – 394
Solid Waste, Drainage and Sewer Rates Increase
Water rates remain unchanged from the prior year, but the cost to maintain infrastructure and service levels for sanitation, drainage and sewer services will increase approximately $8.62 per month effective Oct. 1.
Solid Waste will increase $4.42 (includes sales tax) per month or $53.04 annually to fund operations, capital equipment, debt service and new landfill post-closure costs
FY22 begins the third year of a five-year, $100 million plan to address drainage issues under the Drainage Solutions for a Better Tomorrow capital plan. The increase of $1.50 to the existing rate of $7.50 for a total rate of $9.00 per month or $108.00 annually funds stormwater infrastructure projects across the city’s drainage systems.
Sewer rates will increase $2.70 per month or $32.40 annually due to the pass-through cost for sewage treatment by the Trinity River Authority.