KENNEDALE, Texas — The Kennedale Economic Development Corporation (EDC) spent most of its July 22 regular meeting discussing the EDC’s proposed fiscal year 2026 budget after staff warned that projected town-center renovation costs and lost rental revenue could push the fund balance into a sizable deficit.

The issue matters because the packet presented to the EDC showed a projected net change in the EDC fund balance of roughly negative $721,000 under the draft FY2026 budget; board and staff discussion tied that gap primarily to renovation spending for the former Dollar General building and to a larger-than-expected cost estimate from a potential YMCA partner.

Director Horton summarized near-term revenue and reserves figures and flagged the town-center line items driving the shortfall. “Our fund balance, we’re showing almost 700 days in our reserve,” Horton said, noting that figure had increased from about 478 days the prior year. Staff also told the board the EDC was losing roughly $8,500 per month in lease revenue after Dollar General vacated the site.

Board members and staff outlined the headline budget drivers: an initial renovation allowance of $500,000 for the former Dollar General that staff said might be insufficient, and a YMCA proposal that was presented to staff at $500,000 but later described during the meeting as $869,000. City staff said the newer estimate increased the budget exposure and created multiple funding decisions the EDC must face before the council adopts the city budget.

The board debated several options to reduce the FY2026 shortfall. Members discussed a proposed purchase of a utility lift (quoted in the packet at about $130,000) and whether the EDC should pay half with the city (a 50/50 split) or continue renting equipment. Board discussion included maintenance and warranty considerations, an estimated 20-year useful life for the equipment, and typical rental costs staff cited between $6,000 and $10,000 per year.

By the close of the discussion the EDC recorded no formal roll-call vote on the lift, but the chair announced removal of the lift purchase from the EDC’s recommended budget and indicated the board would revisit the purchase in 2027. The board also reached informal consensus to reduce the EDC’s competitive grant line (the “functional grant”) from $250,000 to $125,000 and to cap the number of grants at about five in FY2026 — an action the board described as a budgeting direction to staff rather than a formal council motion.

Staff and board members discussed options to offset the shortfall, including using other reserve balances or proceeds from potential land sales if a buyer materializes. Staff cautioned that the draft budget authorizes seeking expenditures but does not obligate the EDC to spend those funds; if a deal or renovation does not proceed, staff said the line item need not be spent. Council approval will still be required to finalize the city budget and any amendments.

Board members emphasized competing priorities. Some members argued for investing in town-center improvements now to increase sales tax and property values, while others urged caution given the current projected deficit and the uncertainty around the YMCA estimate and long-term tenant interest.

What’s next: staff said the EDC’s input provided at this meeting will be packaged for the city council’s August budget workshop, and any final decisions about purchases or renovations will return to the EDC and council for formal approval as required.

Ending note: no formal EDC votes on the FY2026 budget were recorded at the July 22 meeting beyond the routine consent agenda earlier in the session; the items discussed were budget directions and informal board consensus for staff to present a revised budget to council that reflects the grant reduction and the removal of the lift purchase from the EDC recommended spending plan.