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Flower Mound CDC hears sales-tax dip and forecasts budget pressure after losing a large taxpayer
Summary
Finance staff told the CDC that sales-tax forecasts are down roughly 9% and that the town lost a top sales taxpayer to a Central Texas relocation, likely reducing revenue by roughly $500,000; staff said the CDC fund balance provides a cushion but capital pacing may be required.
At the April 28 Flower Mound CDC meeting, Finance staff presented a detailed update on the CDC (4B) special sales-tax fund and warned of revenue volatility after the loss of a major local sales taxpayer.
John Zagorski, who presented the financial update, said the CDC fund—sourced from a quarter-cent of state sales tax—has a strong balance (about $12 million) and can currently cover roughly 109% of the year's budgeted expenses. He told the board the town is seeing a roughly 9% decrease in its sales-tax forecast this year and attributed a substantial portion of near-term declines to the recruitment of the town's top sales taxpayer to a call center in Central Texas. Zagorski said the loss equates to roughly $300,000–$400,000 monthly across funds and that, depending on continued trends, "we're likely gonna take roughly a $500,000 hit." (John Zagorski)
Zagorski outlined staff mitigation strategies: slow or space capital projects, reassign some operating costs between funds to protect property-tax relief, avoid immediate personnel hires, and use flexible contracts as a short-term buffer. He forecast a modest reduction in CDC-funded capital next year, with a projected 4B contribution moving from roughly $5,000,000 to about $4,750,000 if current trends continue.
In response to a board question, Zagorski said he maintains regional comparisons: Highland Village is feeling the impact more than Flower Mound while higher-density Lewisville has been less affected. He encouraged board members to request additional data for deeper comparisons.
Zagorski closed by urging continuing monitoring and staff follow-up to refine projections and recommend program pacing if revenues weaken further.
