From: Phil Dyer phildyer@plano.gov
Date: Thu, Jun 10, 2010
Subject: RE: David Smith - Collin County Judge
To: David Hall
David: Thank you for the message, and I hope you are doing well.
Let me answer your question---and I hope that the response is not too long.
We have been working on the budget since I was elected in May of '09. There is no question that the budget of Plano has changed---permanently. The growth of the 80's, 90's, and 00's threw off a ton of fees/revenues that fed the city coffers. Well, the growth is over (although we still have a lot of commercial land remaining to be developed), and that source of revenue has diminished.
Our sales tax is down. It will improve when the economy improves, but it won't get back to the levels of 3 or 4 years ago. The new retail in Allen, Frisco, McKinney, etc. is impacting us just as Plano's retail growth in the 80's and 90's impacted Richardson and north Dallas (goodbye to Richardson Square Mall, and Prestonwood Mall). It is the natural progression/evolution as new areas develop.
Right now, commercial real estate valuations are down significantly, which has a strong impact on our ad valorem tax revenue. That will come back, but it may be a couple of years (or more).
So, we are in a bit of a perfect storm in which our largest sources of revenue are all being impacted.
We have cut $20 million out of the budget over the past 18 months, and we are working on more. We have eliminated over 150 positions in the city, permanently.
So, that is the bad news. Now a bit of good news.
We are AAA rated by the bond rating agencies---the highest rating a city can have. They don't give those ratings to cities who are on the verge of a fiscal train wreck. Our city services are second to none---we have nationally accredited departments throughout our city organization. We continue to win all kinds of awards for excellence and/or innovation.
Finally, the city tax burden to the residents of Plano is lower (in most cases far lower) than in our neighboring cities. I am not criticizing those cities. They are well governed and well managed, and they provide good services. I think that we can stand right with them based on our city services. Here is the city tax burden on owners of a $250,000 home in local cities:
Plano $ 977
Allen $1,388
Carrollton $1,236
Dallas $1,496
Frisco $1,162
McKinney $1,464
Richardson $1,438
Ft. Worth $1,710
Arlington $1,296
The percentage difference is consistent at all price levels. So, the more expensive a home, Plano becomes an even larger bargain.
Bottom line is that Plano is a bargain compared to other cities. We could raise our tax rate a lot, and still be cheaper than almost all of the cities shown above.
We are not a fiscal train wreck waiting to happen. We have challenges, but we are working on this every day (literally). People who say this about Plano simply have not done their research. I always welcome the opportunity to visit with people about this. They may still think that the city tax burden is too high, and I respect that position, but let's work with factual information, and then we can make progress.
I always appreciate the fact that you do the research and gather your information before you communicate.
Please let me know if there is anything I can do.
Regards,
Phil
Phil Dyer
From: David Hall#
Sent: Thursday, June 10, 2010
To: Phil Dyer
Subject: Fwd: David Smith - Collin County Judge
Phil,
I have received some feedback stating that "City of Plano is heading for a fiscal train wreck". I would like to respond properly. Please let me know if there is something I do not know or confirm that Plano is in good shape financially.
David
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