Kennedale — Members of the Kennedale Economic Development Corporation spent more than two hours July 22 hashing out the proposed FY2026 budget as officials warned rising renovation estimates for the former Dollar General and a higher-than-expected YMCA price tag widened a budget gap.

The debate centered on whether the EDC should fund a $500,000 renovation for the town-center building that the board controls, a lift purchase budgeted at about $130,000, and a $250,000 grants line. Staff said the YMCA partnership originally budgeted at $500,000 now looks closer to $869,000, and that the city is losing about $8,500 a month in lease revenue from the vacated Dollar General space. Director Horton told the board, "This is the last EDC meeting before we take our budget to council for adoption. So, just your last opportunity to provide some input to Mr. Hull and myself on what we'll present to council." The draft budget at the time showed a projected net change in the fund balance of negative $721,000.

Why it matters: the EDC controls revenue that is meant to spur private investment in Kennedale’s town center and support local businesses. Large one-time expenditures or overruns could reduce the EDC’s reserve and limit future development incentives.

Most urgent items and board direction

Board members repeatedly returned to three linked items: the Dollar General building (town-center renovations), the potential YMCA tenant, and an equipment purchase (an aerial lift) proposed for shared use by EDC programs and public works. Staff said the Dollar General space would require a minimum of about $400,000 in work to be leasable; the EDC had proposed $500,000. That figure was described as an investment to raise rental value and increase sales tax collection, but staff flagged a new estimate that pushed the YMCA-related cost to roughly $869,000.

Members expressed concern that proceeding without clearer commitments could deepen the shortfall. One board member summarized the fiscal picture: if the draft budget stood unchanged, "we would be overspending $700,000," and warned that continuing deficits of that size would exhaust reserves in a few years. Staff noted there are possible offsetting revenues — for example, a 380 economic-development agreement with Quick Roofing and potential land‑sale proceeds — but those were not included in the draft as guaranteed receipts.

Actions and informal decisions

The EDC took no formal, recorded roll-call vote to adopt the budget at the meeting. Instead, after extended discussion the board reached a working consensus to reduce the grants line and remove the lift purchase from the FY2026 budget authorization. Specifically, the board directed staff to cut the grants allocation from $250,000 to $125,000 and to omit the $130,000 lift purchase from the version being forwarded; staff reported that making those two adjustments would reduce the projected net change in the fund balance from negative $721,000 to roughly negative $526,000. Members discussed a possible 50/50 cost split with the city for the lift (roughly $65,000 each) but ultimately agreed to remove the lift from the EDC purchase plan for 2026 and revisit it later. A separate motion earlier in the meeting to approve the consent agenda passed unanimously.

Discussion points and concerns

- Return on investment for the Dollar General renovation: speakers said investing now could increase rental income and property value, but several board members worried that a large up-front expense would not be recouped within the EDC’s remaining control of the property (staff noted the property will revert to the private owner, Craig Hughes, in 2030). One board member described the area as in a period of strong growth and urged using EDC funds to capitalize on that momentum; others urged caution because of the current revenue shortfall from the vacant tenant.

- YMCA estimate increase: staff said the YMCA estimate provided last week raised the projected EDC commitment from $500,000 to $869,000; staff said they needed more time to negotiate with the YMCA and the property owner and to identify potential partner contributions.

- Lift purchase vs. rental: board members offered competing views. Supporters said owning the lift would save repeated rental costs and provide a tool the city and EDC could use for tree work, holiday decorations and contractor support. Opponents argued renting the equipment for an estimated $6,000–$10,000 a year would preserve cash in a year with an uncertain renovation cost. Staff noted that removing the lift from the budget would require a later budget amendment if the board chose to buy in-year.

Next steps

Staff said they will carry the board’s guidance to the City Council at a budget workshop scheduled for Aug. 5 and will continue negotiations with the YMCA and the property owner. Director Horton told members she would not move forward to council without the EDC's blessing: "If you give me the blessing to move forward with the 50% [split] I'm going to turn around August 5 and ask the council the same thing." The board’s adjustments — halving the grants and removing the lift purchase — were the working changes staff said they would present to council for consideration.

Community and fiscal context

Board discussion noted the EDC’s nearly 700-day fund reserve reported earlier in the meeting and a sales‑tax revenue shortfall compared with last year; staff said quick‑roofing 380 payments and other new revenues may partially offset the loss of the Dollar General lease. Several members asked staff to re-examine the budget to identify further trimming opportunities without undermining key development objectives.

The EDC did not adopt a final FY2026 budget at the meeting; staff will present a revised proposal to City Council for formal action in the coming weeks.