Operational Update August 25, 2020

Posted on August 26, 2020

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Keeping you informed…

The City Council held a special meeting Monday, August 24th, to discuss several substantive issues facing the City of New Fairview, including the FY 2020-2021 budget, road repair and construction, impact fees, and reviewing options to improve management and control of critical infrastructure. I will go into detail about each of these issues below and would encourage you to take a few minutes to read through the information and if you have questions or concerns, please feel free to contact me and make your voice heard.

If you don’t have time to read all of the email, the following bullet points will give you an executive summary:

  • Council has directed staff to bring forward a budget that holds the tax rate flat, at the current $0.30/$100 of appraised value. The final budget will be presented at the September 14th meeting and adopted in the September 28th meeting.
  • Council has directed staff to fund the debt service, the cost of repaying bonds, for the road repair and reconstruction of Chisholm Hills, Branding Iron, and Hilltop Trail. Staff will be moving forward with this process immediately.
  • Council has directed staff to continue to evaluate what options the City has to improve management and control of critical infrastructure, such as water services.
  • Council has directed staff to obtain proposals for an impact fee study. This study will allow the City to place a proportionate cost of capital expenditures on new developments. It will likely slow development but will ensure that the current citizens are not paying the bill for future development.

The staff presentation from the special meeting can be viewed here. As with all presentations, this slide deck serves primarily as talking points and significant amounts of information was also delivered through followup to questions and discussion. We invite each of you to come and join us at City Hall for these meetings or simply log onto the virtual meeting from the convenience of a computer or phone anywhere.

FY 2020-2021 Annual Budget…

As I discussed in a previous email, the overall property tax base has decreased by approximately $5 million or 3.5% due to the decrease in the value of gas well properties. This reduces the revenue generated from property taxes by around $25,000 for the upcoming budget but the City Council has directed staff to develop a budget that will keep the taxes flat at $0.30/$100 of appraised value. Due to the increased revenue from building related permits, which has already exceeded $300,000 in the current fiscal year, next year’s budget should remain about the same.

The slide below shows the budgeted revenue. The two primary sources of revenue are property taxes, $476,743, and the building permits, $350,000. Sales tax is trending up over the last year, but is still recovering from a long decline, $130,00.
The slide below shows the proposed expenditures by department. Expenditures next year are increasing by $70,807 or 8.4%. This is primarily due to an the Councils direction to complete the audit, issue debt and begin the reconstruction and repair of Hilltop Trail, Branding Iron, and Chisholm Hills. You will also see a decrease in the Administration department expenditures, due to savings from professional services by hiring a city administrator, as well as the City Secretary department, due to one-time expenditures and professional service fees.

Road repair and reconstruction…

The Council has directed staff to move forward on repairing and reconstructing the Chisholm Hills, Branding Iron, and Hilltop Trail roads. This will require the City to complete the audit, should be finished by the middle of next week, complete the design and engineering of the roads, and then competitively bidding out the project. This will take some time to work through, but we will be repairing and reconstructing the roads in an expedited time frame.

How we got here from a four-year plan includes significant staff and the Council discussion of what options allow the City to start the road repairs and reconstruction as quickly as possible. This led to adjustments within the budget, reducing two proposed full time positions and reallocation of other budgeted supplies and materials. This provides the funding source of the debt service payments using the existing $0.30/$100 of property tax currently being collected.

Further, the City has finished the data collection and analysis of the City’s Pavement Condition Index (PCI) utilizing the Federal Highway Administration’s manual survey method. This is the same methodology used by the Federal Government and major cities such as Dallas or Houston. We have also developed an interactive map that will be incorporated into the City’s GIS mapping system on the City’s website. It incorporates road segments, assigns an objective PCI value to each road segment, and will be utilized to better assess the order in which roads will be repaired and reconstructed.

You can read more about the PCI process here.

What water is looking like…

The Council asked staff to complete a water study. In doing this, we are looking at the regional sources of water, such as aquifers and surface water. The Texas Water Development Board (TWDB) conducted an Aquifer Study and released a report in 2016 that outlines the major and minor sources of water in the state. The findings will show significant impact on New Fairview directly as well as the entire DFW area.

The TWDB study found that “the greatest water-level declines are in the Trinity Aquifer, focused in the Dallas-Fort worth and Waco Areas” (1) with water levels dropping 450 feet in the Paluxy aquifer over the last 100 years (2) while the number of wells being drilled have tripled within the last decade (3). An article in the Dallas Morning News discussed the booming drilling activity with a third-generation water well drilling company. The driller states that the massive development activity in the region is impacting established functioning wells, “at one time there’s plenty of water, then a development pops up next door and pulls water out from underneath the old well…it’s happening in a lot of places and everyone is having to dig deeper (3).”

Currently, there are three different entities providing water within the City limits and many more in close proximity. If the City decides to continue with the status quo, ceding control of this critical infrastructure, it is likely we will have several more over the coming years as well as increasing amounts of wells going dry. You can visit the Public Utility Commission’s website to view the interactive map that shows the geographic coverage of these entities.

The Council has directed staff to continue to research what options and partnerships are available to the City to plan for the long-term stability, quality of service, and control.

(1) TWDB Texas Aquifer Study
(2) Water-Level Declines in the…Aquifers of North-Central Texas
(3) Dallas Morning New Article

Impact fees, why do we want them…

Impact fees are up-front fees charged to developers for the burden their new development will place on City infrastructure. These assessments generate revenue for funding or recouping the costs of capital improvements or facility expansions required by and attributed to the new development.

Chapter 395 of the Local Government Code allows cities to impose these fees and there are specific guidelines that must be followed when working with developers and administering impact fees. Impact fees may also be imposed in the ETJ with some exceptions outlined in Chapter 395.

Implementing impact fees is a significant undertaking and will take months to obtain proposals, identify the firm the City wishes to work with, and then work through the study to establish the guidelines for administering impact fees within the City. The cost of completing this study will also be significant, but will ensure that future development pay their fair share of the cost.

You can read more about impact fees here or a more simplified version here.


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