Page 24 - Approved Annual Budget FY 2019-2020_Flat

Specialist, and an increase in the collective bargaining agreement. The Fire Department also includes an increase
for Fire Fighting Gear and Equipment---$192K. The other departments had small increases.

Highways and Streets
Highways and streets are budgeted with a decrease of $311K. The decrease is due to a one-time adjustment for
emergency response equipment, $247K, in FY 2019, and a reduction in electricity costs for Street Lights. There
was a Permit Tech added to the Engineering department that offsets some of the decreases.

Health and Welfare
Health and welfare budget was increased by $304K, mainly due personnel adjustments and the addition of a Code
Enforcement Officer Supervisor, an Environmental Health Supervisor, and an Administrative Clerk. In addition,
$103K has been approved for capital equipment.

Culture and Recreation
Culture and recreation are budgeted with an increase of $932K. The Parks department accounts for the largest
increase of $528K due to an addition of seven (7) Groundskeepers and $184K of capital equipment in order to
continue maintaining the same level of service. All other departments had relatively small increases, which are
mostly attributed to various equipment.

Fund Balance
Revenues and transfers-in are budgeted to exceed expenditures and transfers-out, increasing unassigned fund
balance by $1.9M. Resulting fund balance amounts to $56.3M and represents 179 days of operating expenditures,
which is in excess of the minimum fund balance policy of 140 days.

SPECIAL REVENUE FUNDS

Hotel Occupancy Tax Fund
The Hotel Occupancy Tax Fund was established to account for hotel occupancy tax collections within the City.

The Hotel Occupancy Tax Fund is estimated to generate $4.16M in hotel occupancy tax revenues—an increase of
12% from last year’s budget. This year the Chamber of Commerce will continue to be allocated 2¢ ($1.1M); the
Convention Center, 4¢ ($2.2M); with the remaining 1¢ ($552K) allocated to the Performing Arts Center to
support operations. This allocation translates to a minimal fund balance being projected by year end.

Venue Tax Fund
The Venue Tax Fund was established to account an additional 2% for hotel occupancy tax collections within the City for the
construction and operating of a Performing Arts Center.

The Venue Tax Fund is estimated to generate $1.2M in hotel occupancy tax revenues. The City held an election
increasing the Hotel Tax from 7% to 9% of which the additional 2% was allocated to the Venue Tax fund for the
construction of a New Performing Arts Facilities. This year’s funds will be used to meet the debt requirements
($859K) and the balance to the Performing Arts Fund ($331K) to support operations.

Development Corporation of McAllen, Inc. (Development Corp) Fund
The Development Corp of McAllen, Inc. (4B) was established to account for the additional ½ cent sales tax for economic
development.

The Development Corp Fund was established in fiscal year 1997-98 to account for the revenues from the
additional ½¢ sales tax rate for economic development, approved by the voters in May 1997. Sales tax revenues
from the ½¢ rate this year are estimated at $18M, which is proportional to the estimate provided in the General

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