1. 1 Presented to the City Council by Karen Montgomery Assistant City Manager February 17, 2009 UPDATE ON FY 2009 SALES TAX COLLECTIONS

2. 2 City of Fort Worth Sales Tax Collections Overview Update on Sales Tax Revenue Comparative Review - Annual / quarterly / other cities Unique Attributes / Variables Assessment - fairly stable first quarter results; not impacted as severely as surrounding cities; staff monitoring closely On going communication plan Key Budget Dates February 17, 2009

3. 3 City of Fort Worth General Fund Revenues Historical Tax Collection Data from the Budget Office; FY2005-FY2008 Actuals, FY2009 Adopted BudgetFebruary 17, 2009

4. 4 City of Fort Worth Sales Tax Collections Sales Tax as a Percent of Total Revenue Data from Texas Comptroller’s Office and Budget OfficeFebruary 17, 2009

5. 5 City of Fort Worth Sales Tax Collections Metroplex Comparisons Sales Tax as % of FY2009 Budget Data from Adopted FY09 budgets of Fort Worth, Dallas, Grand Prairie and ArlingtonFebruary 17, 2009

6. 6 City of Fort Worth Sales Tax Collections First Quarter, FY2007 – FY2009 6.3% Data from Texas Comptroller’s Office and Budget Office (0.2%) February 17, 2009

7. 7 City of Fort Worth Sales Tax Collections Metroplex Comparisons FY09 Q1 vs FY08 Q1 Data from Texas Comptroller’s OfficeFebruary 17, 2009

8. 8 City of Fort Worth Sales Tax Collections Metroplex Comparisons First Quarter (FQ), FY2009 Data from Texas Comptroller’s OfficeFebruary 17, 2009 CityFQ % Change (FY2008-FY2009) Keller2.5% Burleson1.0% Fort Worth(0.2%) Southlake(1.6%) Watauga(1.6%) Arlington(2.0%) Dallas(3.9%) North Richland Hills(5.6%) Hurst(5.6%) Grand Prairie(11.3%)

9. 9 City of Fort Worth Sales Tax Collections FY2009 versus FY2008 10.9% (0.2%) (7.5%) Data from Texas Comptroller’s Office and Budget OfficeFebruary 17, 2009

10. 10 City of Fort Worth Sales Tax Collections Factors to Consider Going Forward Sales Tax Attributes –Highly volatile revenue source –Responds quickly to changing economic conditions –Difficult to project accurately or with much certainty –A 1% change in collections = approximately $1 million –Disparate information upon which to rely February 17, 2009

11. 11 City of Fort Worth Sales Tax Collections Disparate Information Positive Factors State Sales Tax Projections –FY09: +.4% –FY10: +.5% –FY11: + 4.2% –Source: Texas Comptroller’s Biennial Revenue Estimate 2010-2011 January retail sales up 1% across USA (vs Jan 08) –Sales tax revenue follows retail sales with a two month lag (Rec’d Dec sales tax in Feb) –First increase in 7 months –Source: AP, Commerce Department February 17, 2009 Negative Factors Severe downtown in market Continued job losses – locally Current unemployment rates –USA: 7.6% (Jan) –Texas: 6.0% (Dec) –Fort Worth: 6.0% (Dec) 4.3% - Dec 2007 –Source: BLS, Texas Workforce Commission Decline in gas drilling –Fewer bonuses / royalties paid Level of consumer confidence –News affects spending

12. 12 City of Fort Worth Sales Tax Collections Budgetary Impact 1st Quarter Re-estimate being held flat (i.e. at budget) of $104 million; same for CCPD 5 year analysis and forecast being conducted Economic Forum to be held on March 5 January sales tax collections reported by March 13 Will continue to monitor and report collections to City Council monthly February 17, 2009

13. 13 City of Fort Worth Sales Tax Collections Ongoing Communication March Reporting –March 13 th - Sales tax data posted by State Comptroller –March 13 th – Provide memo to Council –March 17 th – No meeting –March 24 th – Sales Tax Briefing to Council April Reporting –April 10 th – Sales tax data posted by State Comptroller –April 10 th – Provide memo to Council –April 14 th – Sales Tax Briefing to Council February 17, 2009

14. 14 City of Fort Worth Budget Timeline Key Dates March 5 – Economic Forum May 15 –Appraisal Districts’ Preliminary Values Reported –City Council Memo / Briefing - May 19 May / June – City Council Retreat – Budget Priorities July 24 – Appraisal Districts’ Certified Values Reported –City Council Memo / Briefing – July 28 August 18 – City Manager presents recommended budget Aug & Sept – Budget Study Sessions with City Council Sept 1 – Public Hearings Sept 8 – Public Hearings Sept 15 – FY 2010 Budget Adoption February 17, 2009

15. 15 City of Fort Worth Sales Tax Collections Summary First Quarter Sales Tax Results Fairly Stable Holding Budget Flat for Now Dynamic Economic Environment Updating 5 Year Forecast for Economic Forum Ongoing Updates to City Council February 17, 2009

16. 16 Questions?