MEDC reviews financials and sales-tax trends as staff readies budget projections

The McKinney Economic Development Corporation received a detailed presentation of February, March and April 2025 financial reports at its May 20 meeting and discussed sales-tax performance and forecasting ahead of the summer budget season.

Why it matters: Sales tax is a primary revenue source for city services and economic development programs; the board considered recent monthly volatility and asked staff to model multiple revenue scenarios for the upcoming budget process.

What staff reported: Chance Miller, assistant finance director, presented the three monthly financials. He reported February revenue collections of $2,700,000 with total expenses of about $410,000 for the month. For March, staff reported $1,800,000 in revenue and higher expenditures resulting from a land purchase: "we had $42,200,000 that was when we purchased the land back in March," Miller said, and total March expenses were reported at about $43,100,000.

Miller explained April reporting included debt issuance accounting under Governmental Accounting Standards Board (GASB) rules: "this is when the debt issuances went through so you'll see $63,200,000 coming in the way that we are required to report according to GASB," he said, and noted associated bond issuance costs increased non-departmental expenses for the month.

Sales tax trends and budget projections: Miller walked the board through month-to-month sales-tax variances tied to collection timing and Comptroller allocations. He said the February sales-tax report (applied to December receipts) showed a 12.7% increase that brought year-to-date growth to 4.7%. The March report (applied to January receipts) showed a 1% decrease for McKinney, while April (applied to February receipts) reflected a 5.4% decrease; Miller said the city was monitoring a 2.7% year-to-date increase relative to the budget target of 5%.

Miller and board members flagged an audit reallocation affecting one large taxpayer: an administrative/waste-management firm previously allocated to McKinney had its sales tax allocated to a different jurisdiction for prior years, producing an apparent drop of about $888,000 in city receipts once the Comptroller reallocated those amounts. Miller explained this reallocation made year-to-date comparisons appear weaker but that trend adjustments should exclude the reallocated amount when appropriate.

Board direction: The board discussed forecasting and asked staff to present multiple budget scenarios for the summer budget process. Miller said staff had already reduced growth assumptions in internal planning and would present planning scenarios (2.5% growth, flat, and decline) to the finance committee and then to the full council ahead of the August presentation and September budget adoption.

Ending: The board approved the three months of financial reports as part of a single motion later in the meeting and asked staff to continue refining revenue projections through the summer budget timeline.