HomeMy WebLinkAboutIR 7385 FINFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7383
To the Mayor and Members of the City Council
May 30, 1989
Subject:
I= BAJAKCE1 GUIDEL
IS
g� - GENERAL FUND AND GENERAL D .
SERVICE FUND
General Debt Service Fund
The 9-30-88 fund balance of the General Debt Service Fund was $16,684,000
(an improvement over the $15,748,000 projected in the September, 1988
I.R. ). The most recent discussion with Council concerning this fund
balance is in the 1989-90 Budget Implications section of Informal Report
No. 7368 (Attachment B) presented to Council on March 16, 1989. Subsequent
to this report revenues to the General Debt Service Fund have been
re-estimated resulting in a projected 9-30-89 fund balance of $14,427,000.
The recently received 1989 preliminary appraised property values from
Tarrant Appraisal District provide a base upon which to estimate 1989-90
receipts from the debt service tax levy. This information plus an estimate
for interest earnings results in a projected 1989-90 revenue of
$48,636,000. The 1989-90 debt service requirements (including those for
the recent $14,000,000 sale, but no possible future sales) is $55,824,000.
This alone would result in a 50% deterioration in the fund balance to
$7,239,000. In the opinion of staff and the City's financial advisor a
drop of this magnitude could have a negative impact with the bond rating
agencies. As stated in the March, 1989 I.R. a planned, gradual reduction
coupled with a reasonably favorable fund balance in the General Fund would
not be expected to produce the same negative reaction. For this reason,
staff is recommending a 2 cent increase in the debt service tax levy for
1989-90. This would increase the rate from the present $.2824 to $.3024,
increase estimated revenues by $2,878,000 and result in a fund balance of
$10,117,000 which is 18% of the 1989-90 annual debt service requirements.
If no alternate direction is received from the City Council, staff will
proceed with developing the 1989-90 proposed budget using the guidelines
included in this report.
oLugl�a2
s
Rarman=e�1�
City Manager
op
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CIT�,OUNCIL MEMBERS Am` No. 7385
`pftortrTo the Mayor and Members of the City Council
May 30, 1989
V S
TEXAy Subject:
FUND BALANCE GUIDELINES - GENERAL FUND AND GENERAL DEBT
SERVICE FUND
General Debt Service Fund
The 9-30-88 fund balance of the General Debt Service Fund was $16,684,000
(an improvement over the $15,748,000 projected in the September, 1988
I.R.). The most recent discussion with Council concerning this fund
balance is in the 1989-90 Budget Implications section of Informal Report
No. 7368 (Attachment B) presented to Council on March 16, 1989. Subsequent
to this report revenues to the General Debt Service Fund have been
re-estimated resulting in a projected 9-30-89 fund balance of $14,427,000.
The recently received 1989 preliminary appraised property values from
Tarrant Appraisal District provide a base upon which to estimate 1989-90
receipts from the debt service tax levy. This information plus an estimate
for interest earnings results in a projected 1989-90 revenue of
$48,636,000. The 1989-90 debt service requirements (including those for
the recent $14,000,000 sale, but no possible future sales) is $55,824,000.
This alone would result in a 502 deterioration in the fund balance to
$7,239,000. In the opinion of staff and the City's financial advisor a
drop of this magnitude could have a nega-tive impact with the bond rating
agencies. As stated in the March, 1989 I.R. a planned, gradual reduction
coupled with a reasonably favorable fund balance in the General Fund would
not be expected to produce the same negative reaction. For this reason,
staff is recommending a 2 cent increase in the debt service tax levy for
1989-90. This would increase the rate from the present $.2824 to $.3024,
increase estimated revenues by $2,878,000 and result in a fund balance of
$10,117,000 which is 18% of the 1989-90 annual debt service requirements.
If no alternate direction is received from the City Council, staff will
proceed with developing the 1989-90 proposed budget using the guidelines
included in this report.
ouglas Harman
City Manager
OFFICIAL RECO,1O
AW CITY
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n
FT. '
WO-A �J, TEX.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS