Kennedale officials held a budget work session on Aug. 5 to review the proposed FY2026 spending plan, during which staff presented a tax‑rate reduction proposal and a list of projects and personnel items that could be adjusted to reduce a projected general‑fund shortfall. The staff proposal retained a lower property tax rate of 0.6925 per $100 valuation (a 1.4‑cent reduction from the current rate in staff materials), though council discussion centered on whether to make a smaller 1‑cent reduction to preserve roughly $170,000 in revenue.

City staff advised the council that the general fund faced a proposed net change in fund balance that would reduce reserves by about $786,352 under current budget assumptions. City Manager Daryl asked council members to help identify roughly $200,000 in reductions to avoid creating a high recurring pattern of budget shortfalls. He listed candidate items for reduction or deferment: a capital lift purchase (total cost about $134,000, with about half charged to the EDC), a new public‑works project‑manager FTE (roughly $112,000 fully burdened), an additional street‑lighting pilot (about $50,000), a police patrol vehicle (about $80,000), library RFID equipment (about $20,000) and various consultant or grant‑related allowances.

Council members discussed priorities and tradeoffs. Several members supported preserving the library RFID project and the street‑lighting pilot, citing deferred facility maintenance and potential safety and business‑development benefits. Multiple councilmembers also urged adding a grant‑writer position or contract to pursue outside funding, arguing that those investments could quickly offset costs. Daryl said the city has vetted grant‑services providers and expects any new grant position or contract would not deliver meaningful awards until several months after hire; council members agreed that the grant function should remain a priority.

On staffing and benefits, staff proposed a 3% pay increase for civilian employees; the public‑safety step‑pay plan continues for firefighters and police officers. Health‑insurance negotiations were in progress; the budget assumed up to a 5% increase but staff expected a lower change and planned to present final benefits figures at the council’s Aug. 19 meeting. Finance staff said the city’s days of fund balance would remain above the council’s written minimum (17% or 63 days) under the current projection, with projected days of fund balance of about 96 at the end of FY2026 if the budget and projections hold. Staff noted that unspent budgeted amounts in FY2025 increased reserves and provide flexibility going into FY2026.

Council members asked staff to bring back revised options and confirmed that the Aug. 19 meeting would include benefit negotiations and any recommended budget changes. The council did not adopt the budget at the Aug. 5 work session. At the end of the public portion of the meeting council moved into executive session under the Texas Open Meetings Act; the motion to enter executive session passed unanimously and the council convened in closed session.