Coppell staff presents balanced FY2026 budget, proposes slight tax-rate cut amid 6.6% valuation growth

City staff on Monday presented the proposed fiscal year 2026 budget to the Coppell City Council and outlined how certified 2025 property values, staff reductions and one-time fund-balance uses shape the plan. The presentation, led by Kim, the city budget presenter, included a proposed tax rate of 0.444976 and an updated estimate that the average home receiving a homestead exemption would see the city's portion of its bill rise about $119 for the year.

The presentation matters because certified taxable values rose about 6.61% for tax year 2025, increasing the tax base to roughly $12.5 billion, and staff projected the plan must balance lower allowable property-tax revenue growth with rising costs. "The proposed tax rate is the 0.444976," Kim said, adding the rate is roughly 1.4 pennies less than the current 0.458632. She also said the proposed maintenance-and-operations revenue is about $47 million, roughly a 3.4% increase in property tax revenue compared with the current year.

Kim told the council the proposed budget is balanced in the technical sense — revenues plus proposed use of fund balance equal or exceed expenditures — and that it assumes constrained property-tax revenue growth under state law commonly referred to in the presentation as SB2. "Yes. I'm referring to what was referred to when legislation passed as SB2," Kim said, explaining the cap limits property-tax revenue growth to 3.499% and creates an "Austin Gap" between projected expenditures and allowable revenue. To narrow that gap, the proposed budget reduces staff through vacancy management and position eliminations and uses assigned fund balance for some one-time projects.

Staff detailed specific fund changes: a $5.5 million transfer from the general fund to the municipal utility drainage district (a direction previously given by council), removal of a $250,000 transfer from the Rolling Oaks Memorial Cemetery fund at council direction, and adjustments in special revenue funds such as the Coppell Recreational Development Corporation (CRDC) and the Crime Control and Prevention District (CCPD). Kim said three positions were moved to the water-sewer fund and seven positions were eliminated from the general fund; combined with CRDC changes the net citywide employee-count reduction was about 7.5 full-time equivalents.

Water and sewer budget lines changed after staff received updated rates from Dallas Water Utilities and the River Authority. Kim said the updated volume rate for water rose 12.3% (from about $0.57 per thousand gallons to $0.64), while contractual demand charges for water decreased slightly. Overall, she said, updated rates reduced the water-and-sewer expense projection by nearly $1.3 million compared with the June presentation. "The total change for the proposed budget presented on January 23 to what's in your packet tonight is a decrease of almost $1,300,000 in the expenses of the water sewer fund," Kim said.

Council members pressed staff for clarifications. When asked about inflation assumptions, Kim said staff used 5% for salary and benefits and 3–4% for other supplies, maintenance and services. Councilmember Mike asked for a time horizon for the staffing and reorganization approach; staff said the goal is to begin reductions now so the city can align expenditures with projected revenues within about five years. Councilmember Jim asked for details about the "Vision 2040" initiatives and the funding; Kim said $2.2 million of assigned fund balance was identified for Vision 2040 projects and the broader work-plan allocation currently shows $9.6 million budgeted after that adjustment.

Kim also showed a breakdown of the typical homeowner's tax receipt: public safety accounted for about $943 annually (~43% of the local portion), public works about $310 (~14%), community experiences (recreation, library, senior center, tennis) about $386 (~18%), and general government roughly $450 (~21%). She noted that an average homeowner's combined city services and bond payments translate to about $215 per month. Kim added that a senior homestead combined exemption example would yield about $445 less annual tax than a homestead-only bill.

The council and staff discussed process and next steps: staff will file the finalized budget document with the city secretary on August 5; on August 12 council is expected to adopt a maximum tax rate to satisfy state posting requirements and a recorded vote; public hearings on the tax rate and budget will be held August 26; and subsequent council votes finalize the budget and tax rate in August. Kim cautioned that the official tax-rate calculation from Dallas County had not yet been received and that the presented rates were staff calculations that historically agree with the county's calculation.

The workshop included questions from members of the public on specific line items. A resident asked about a 51% proposed increase in ENCORES street-light rates mentioned in the presentation; councilmembers and staff discussed that the traffic division budget increased $189,000 to reflect that proposed charge. Kim said staff reduced some budgeted expenditures after receiving updated vendor rates and clarified that the reduction in the June-to-July budget presentation reflected better-than-expected external rates, not a fall in the city's underlying costs.

No formal council votes were recorded during the workshop. Staff emphasized the difference between operating expenditures and one-time uses of fund balance, and said the proposed general fund operating expenditure budget increased about 2.38% over the 2025 operating expenditures (excluding one-time transfers). Kim closed by thanking council and staff for work on early steps to reduce the Austin Gap and noted staff will bring any necessary fee or rate recommendations to council later in the year if the fiscal-year-end results require it.

The council's next formal steps on the budget and tax rate were scheduled for August, and staff said available receipt handouts summarizing the tax-bill breakdown were available to attendees after the meeting.