City Manager

City Manager’s Update on the FY17-18 Budget and Tax Rate

THURSDAY, AUGUST 31, 2017  |  DOWNLOAD A PDF VERSION OF THIS LETTER

The City of Kennedale is currently developing the budget for the fiscal year that begins October 1, 2017. A typical budget process includes:

  • Initial budget developed and proposed by the City Manager
  • Lengthy discussions and possible modifications by the City Council
  • Public hearings (View the calendar) to solicit comments and input from citizens
  • Adoption of official budget by the City Council prior to September 30

The City Manager’s proposed budget was presented to Council on Friday, August 11. Council has held three additional work sessions, sought information from staff, and suggested changes to the proposal. Those suggestions and their impact on services and the community are being evaluated, and will be further refined prior to the public hearings in September. Consideration for final adoption of the budget and tax rate will occur at the September 18 Regular Meeting.

The purpose of this letter is to provide detailed information to residents about the budgeting process and about the facts, issues, and impacts that the proposed budget could have on their community.

Three staff memorandums in response to City Council members’ questions regarding the proposed budget are already available. Thus, I will provide highlights of the current status of the developing budget, as of the date of this letter.

In preparation for the public hearings, I would encourage each of you to familiarize yourself with the budget and to seek answers to specific questions directly from City of Kennedale administration by calling or emailing either myself or Director of Finance Brady Olsen.


HIGHLIGHTS


The City Manager’s budget proposal to Council is designed to:

  • Maintain or enhance the level of services that residents desire and that exemplify the dynamic nature of modern local government, including but not limited to police, fire, EMS, library, public works, water and sewer, parks, planning, and senior programs
  • Provide these services in a cost-effective manner by maximizing efficiencies
  • Invest in the future through managed growth policies that enhance livability
  • Provide a sound infrastructure that will ultimately help keep tax and utility rates competitive
  • Include a two-cent ($0.02) property tax rate increase that would increase the annual cost for a typical homeowner (with a home value of $225,000) by about $45.00
  • Provide a 2% compensation increase to the City’s 77 employees
  • Fund the projected 15% increase in employee health insurance costs (following the bidding process, that amount has been amended to be a 20% increase)
  • Eliminate most cash-funding for capital improvements and, instead, issue $4 million in capital debt funding through Certificates of Obligation for needed water and stormwater projects
  • Reduce base sewer charges from $45 to $36; and reduce base charges on 1” or greater meters
  • Increase stormwater fees (assessed on your monthly utility bill) from $3.50 to $4.00
  • Reduce franchise fee payments paid by the water fund to the street fund from 9% to 5 (thus reducing the amount of funding available for street maintenance)

Due to rising service costs, the inclusion of minimal pay increases and very limited new or expanded programs, and cost increases for health insurance, the budget, as proposed, does have total expenditures that will exceed expected revenues by roughly $220,000. That deficit forces the City to, once again, rely on reserve funds to “balance” the budget, causing General Fund reserves to fall short of established policy guidelines.

To avoid or minimize the reliance upon reserves to balance the General Fund budget and, if possible, to avoid a tax rate increase, the City Council asked that options be examined. Unfortunately, to reduce the tax rate to the FY16-17 “effective” rate would require rather severe cuts to the service levels of all departments, including public safety, library, senior services, and code enforcement. Staff provided the City Council a comprehensive summary of options, which are posted under “Staff Memos” at www.cityofkennedale.com/budget.

Rest assured that staff and Council are working diligently to provide a level of service in this budget that reflects the desires of the community we serve. Unfortunately, some of the information seen on social media is inaccurate or misleading, and we want your information to be as factual as possible. Again, I encourage you to seek information and answers either by calling us directly or by visiting www.cityofkennedale.com/budget, where you can see the proposed budget, upcoming dates, and options being considered.

Thank you for continuing to support your great city by being engaged and informed.

Sincerely,
George Campbell
City Manager

QUESTIONS?

George Campbell, City Manager
gcampbell@cityofkennedale.com
Direct Line: 817-985-2102

Brady Olsen, Director of Finance
bolsen@cityofkennedale.com
Direct Line: 817-985-2110 

Upcoming Dates
City Hall (405 Municipal Drive) 

Thursday, September 7, at 5:30 p.m.
View on the calendar
Public Hearing on the Proposed FY2017-18 Budget & First Public Hearing on the 2017 Tax Rate 

Thursday, September 14, at 5:30 p.m.
View on the calendar
Second Public Hearing on the 2017 Tax Rate 

City Council Regular Meeting
Monday, September 18, at 7:00 p.m
(Work Session 5:30 p.m.)
View on the calendar
Consideration of adoption of the FY17-18 Budget and 2017 Tax Rate

Tax Rate Information

What is the Current FY16-17 Tax Rate? $0.767500 (per $100 of taxable value)
AN EXAMPLE, FOR COMPARISON:
$1,726.88 (on a home valued at $225,000 by the Tarrant Appraisal District (TAD)) 

What is the FY17-18 Effective Tax Rate? $0.726967 (per $100 of taxable value)
This is a property tax rate, based on existing properties, that would raise the same amount of revenue as the previous fiscal year.
AN EXAMPLE, FOR COMPARISON:
$1,635.68 (on a home valued at $225,000 by the Tarrant Appraisal District (TAD))

What is the FY17-18 Proposed Tax Rate? $0.787500 (per $100 of taxable value)
If the proposed two-cent rate increase is adopted, $487,954 more revenue would result from property tax than in FY16-17. This includes increases in valuations and newly added properties.
AN EXAMPLE, FOR COMPARISON:
$1,771.88 (on a home valued at $225,000 by the Tarrant Appraisal District (TAD))


City Manager’s Budget Proposal

FRIDAY, SEPTEMBER 1, 2017  |  DOWNLOAD A PDF VERSION OF THIS LETTER

I shared a letter yesterday outlining the budgeting process and the details of the budget that I have proposed to Council, which is based on revenues and those services identified by department heads as being needed or desired by the community we serve. In that letter, I also encouraged anyone with questions about the budget or tax rate to contact the City Manager’s Office or the Director of Finance directly.

In an effort to help the community better understand the discussions and considerations involved in this budgeting process, I have also posted three staff memos responding in significant detail to questions from Council members about specific line items and related practices and procedures, including the City’s relationship to separate entities like the Economic Development Corporation (EDC).

Again, I encourage interested citizens to contact staff or to rely on the accurate and timely information at www.cityofkennedale.com/budget. I feel led to reemphasize this after a mailer was sent to our community this week that included inaccurate or misleading information that may clearly leave the wrong impression as to the efforts being made by Council and staff to provide a comprehensive and transparent budget.  

Specifically, I want to take this opportunity to reassure residents that:

  • As the City Manager, I have recommended a two-cent increase to the ad valorem (or property) tax rate in an effort to restore the General Fund’s fund balance to adopted policy levels (of 18-25% of annual expenditures), while preserving an adequate level of service delivery. To my knowledge, neither the Mayor nor any member of the Council has yet committed to supporting that proposal. I would not anticipate such a decision or final commitment until after Council hears from citizens at the public hearings, scheduled for September 7th and 14th.
  • The budget that I have recommended does include reductions in total water and sewer rates for all citizens and, to my knowledge, neither the Mayor nor any member of the Council has suggested an increase in any of those rates.
  • In my examination of the Water Utility Fund, it was determined that there was a budgeting error that resulted in an inaccurate representation of the working capital (fund balance) that was actually available for use in the event of an unexpected need. There was, however, no “lost money” as represented in the mailer citizens may have received.

As this City administration makes every effort to be open and transparent to the citizens of Kennedale, I again urge reliance upon this official web page for accurate, impartial, and objective information. Thank you for your continued interest in your local government and in accurate and transparent reporting of our financial management.

Sincerely,
George Campbell, City Manager