FY2016-17 Budget Final

City of DeSoto Five-Year Financial Forecast FY2017 – FY2021

3.2.3 Hotel Tax Revenue: The current ordinance sets hotel tax fees at 7 percent of taxable hotel revenue. Unlike other revenue sources, Hotel tax revenue experienced a consistent growth over the past 10 years. Tax revenue grew from $248,785 in 2006 to $840,967 in 2015 increasing by 238% from base year 2006. The growth in revenue was due to increase in the number of hotels in DeSoto. The number of hotels in DeSoto increased from 3 in 2006 to 7 Hotels in 2010. No new Hotels in DeSoto since 2010. The estimated growth rate for Hotel tax revenue will be estimated as the average of the percentage increase in tax collections since 2013. The forecast model assumes at least two new hotels will be introduced to the city for the next 5-years. 3.3 Municipal Court Revenue: Mu n icipal court revenue experienced an unusual growth rate in 2014 where revenue went from $998,413 in 2013 to $1,565,865 increasing by 57% from previous year. This is mainly attributed to the growth in revenue from Fines and Fees and a change in management and staffing in Municipal Court Department. Municipal Court Revenue

The increase in court revenue is 2014 is due to the increase in the number of warrants issued (from 3930 in 2013 to 10096 in 2014) and the increase in the number of collected warrants. New technologies have been employed for collections and staff added for warrant issuances. The average EGF for the past 10 years is 6.02% which most likely won't present the future trend. Collections for Municipal court are expected to slow down after the surge in the past 2-years. The forecast model will assume a 1% annual growth in Municipal Court Revenue.

$2,000,000

$1,800,000

$1,600,000

$1,400,000

$1,200,000

$1,000,000

$800,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Municipal Court Revenue

3.4 Charges for Services: Revenue for this category is derived mainly from water, sewer, drainage services, ambulance service charges, and penalty fees. Estimated Growth Rate (EGR) for charges revenue is estimated at 1.8%, which is the average annual change for years 2006 to 2014. Year 2015 was excluded due to the increase in sewer rate. The forecast is based on the assumption of maintaining the same water rate and the same rate for ambulance service charges.

Charges for services

$30,000,000

$28,000,000

$26,000,000

$24,000,000

$22,000,000

$20,000,000

$18,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Charges for services

Linear (Charges for services)

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