Kennedale staff outlines two debt scenarios to finance FY26 capital program

City Manager John Horton presented preliminary financing scenarios at Kennedale’s June 2 budget workshop, saying the city’s financial adviser had modeled two options to help pay for a slate of capital projects presented by departments.

Horton said one option would be a single bond issuance in the $8–9 million range in FY26; an alternative would split borrowing into two issues — roughly $5 million in one year and $6 million the next — to spread payments and allow time for matching funds and other grants. He cautioned that Samco Capital requires the certified tax roll and certified property values before it can produce final interest‑rate and term estimates.

Council members pressed staff about flexibility, debt capacity and timing for projects such as a $2.1 million fire quint and a $3 million Peggy Lane water‑sewer‑road reconstruction. Horton said some projects (for example, certain water tank work) are already allocated ARPA funds that must be spent by the federal deadline in 2026, which affects cash and debt timing. “These are very preliminary numbers,” Horton said; “but there are two plans we’re looking at.”

Staff also noted that prepayments on large vehicle orders can lower cost if the council elects to pay a portion of the purchase up front, but warned that the city would still likely need to issue debt to cover multi‑million‑dollar purchases. Horton said the city’s improved bond rating is helpful but not the only factor in pricing; certified values, projected revenue and legal/tax constraints will affect final capacity and interest rates.

No formal bond authorization was taken at the workshop; staff said they will return with refined financing proposals after the certified tax roll is published.