Frisco council declines to pursue new revenue streams despite rising expenses
FRISCO — Annual expenditures are growing much quicker than Frisco’s revenue streams, and town officials are working to strike a balance between offering services and cutting costs.
But until council members have a specific project in mind, they’ve decided not to pursue any new revenue sources.
“Local government has been asked to take on more than police, fire, streets and snow removal over the years,” Frisco Town Manager Nancy Kerry said during a work session discussion on finances in late February. “Increasing revenue generally relies on increasing the number of visitors and customers. We’ve obviously had an increase in customers over the last few years, so revenue is going up. But at the same time, with all the additional programs, services and activities, there’s going to need to be additional revenue sources somewhere.”
Last month, town staff led a discussion on the town’s revenue sources for council members as part of the town’s 2019-20 strategic plan, highlighting the fact that the growth of expenditures has far exceeded increases in revenue over the past several years.
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Total revenue for the general fund, the town’s chief operating fund, has risen about 8% over the past three years, from about $14.2 million in 2017 to an expected $15.3 million in 2020. During that same period, expenditures have grown nearly 31% from $10.4 million to $13.6 million.
“I think (those numbers) should be troubling to anyone that looks at them,” Frisco Finance Director Bonnie Moinet said. “It’s the reason council established the goal to look at these revenues, and that’s why we had this discussion. … It hasn’t taken very long for us to get to this point. And I don’t think there’s reason for alarm. The town is sound financially, but I certainly think it’s an indicator that we need to be spending what revenues we have wisely.”
During the work session, staff walked council members through the town’s existing economic drivers — namely Main Street, commercial and retail services along Summit Boulevard, the marina and the Frisco Adventure Park — and provided possibilities for ways to increase revenue. Ideas essentially fell into two categories: trying to increase current revenue streams through higher taxes and fees, and developing new streams through activities at the marina and Adventure Park.
Tax increases would make an immediate impact. According to the town, a 1% increase to the sales tax would generate an additional $2.4 million, and a 1% increase to lodging taxes would generate an additional $230,000. But any tax increases would require voter approval, and councilors agreed that community members would be hard to convince, particularly without a set plan for spending the additional funds.
Council members also balked at the idea of new revenue streams, such as the addition of summer tubing or wedding, event and music venues at the Frisco Adventure Park.
“I think we’re so far away from being able to defend that ask,” councilor Dan Fallon said, noting that the town made several large investments over the past year, including the addition of new communications, housing and environmental coordinators to town staff. “So before you go looking for sales tax dollars and new revenue streams, there’s a whole list of things we need to go through to defend it. Is that new labor number responsible? Are we investing our dollars adequately? … As a taxpayer, there’s no way I’m going to put up with that.”
Council member Deborah Shaner — who’s set to leave office following April’s election — urged her colleagues to reconsider, noting the need for additional revenue and slamming the council for what she called “irresponsible” spending over recent years.
“I don’t agree that we don’t need to have more revenue streams,” Shaner said. “… I’m leaving here in a couple months with fear in my heart because of how much money we’re spending, and how nobody is alarmed by these expenditures and revenues starting to catch up with each other. It’s too late once your revenues are underneath your expenditures.
“Please wake up, and pay attention to what’s happening here. We’re spending too much money. … I hope somebody pays attention to these numbers turning upside down before it’s too late. Because I’m leaving with fear, and I’ve watched what I consider to be some pretty irresponsible and pretty frivolous spending.”
Ultimately, council members decided not to make any changes to the town’s existing revenue sources, at least not until a specific use for increased funds is identified.
And the council did voice a dedication to be watchful with future spending.
“The last eight years, we’ve been very fortunate,” Mayor Gary Wilkinson said. “The economy has been very good … but all these new things are plateauing. And those good times aren’t going to last. I would emphasize being careful on how we spend money.”
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