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Coppell staff warn ‘Austin Gap’ will widen without changes to spending or revenue
Summary
City staff presented a five‑year financial forecast to the Coppell City Council showing expenditures rising faster than revenues under the council’s 3.499 tax‑rate direction, leaving planning tools and department prioritization to close a projected gap.
City staff told the Coppell City Council on Wednesday that the city’s five‑year internal forecast shows expenditures outpacing revenues under the council’s revenue direction, creating what staff called the “Austin Gap.”
Vanessa Tarver, assistant director of strategic financial engagement, told the council the forecast is “an internal planning tool” used to identify long‑term trends and prepare for the fiscal year 2026 budget. She said staff modeled existing operations plus department requests and used a 3.499 property‑tax scenario the council provided in January.
The nut graph: The forecast shows base operating costs (carried forward, salary and benefit changes, and a 4% inflation proxy) rising faster than allowed revenue growth under state limits staff cited, producing a multi‑year shortfall that staff and assistant directors are addressing through prioritization, reallocation and possible reserve use.
Staff reported the forecasted base general‑fund operating expenditures rose to roughly $79 million — including a built‑in increase for public safety salaries — and departments submitted 30 additional requests totaling about $3 million. After assistant‑director prioritization and a second retreat, staff reduced those general‑fund requests by 19 items and roughly $2.5 million.
“We use the five‑year forecast to introduce discipline into understanding that our revenues are now capped because of the Austin Gap,” Tarver said, referencing changes since statewide tax changes. Tarver and Adam Richter, assistant director of community experiences, described a two‑day assistant‑director process that resulted in ranked priorities and alternative funding ideas.
City Manager Mike Landry told council the work is already folding into the FY26 budget process and staff are preparing strategies including reorganizing roles as vacancies occur, leveraging technology and automation for routine tasks, reviewing service contracts and “thoughtfully stopping activities that bring limited value to the community.”
Council members asked for clarifications on assumptions used in the forecast. Tarver said the forecast applied a 4% inflation proxy to non‑fixed operating components and that some departmental fixed costs (for example, public safety personnel increases) were added before the inflation calculation. Multiple council members asked for the detail pages in the forecast document; Tarver pointed to detailed line items in pages 41–57 of the packet.
Several council members praised the process of assistant‑director review and said they want staff to continue seeking less‑onerous options such as reallocating transfers to enterprise funds, reducing some transfers from the general fund and searching for alternative funding sources. Staff identified near‑term strategies that included temporarily reducing transfers to internal funds and using increased interest income in some funds to offset transfers.
Tarver noted staff will continue to refine the forecast and present specific budget choices during the formal budget workshops in June and July. She emphasized the forecast is not a proposed budget but a planning tool to inform the proposed FY26 budget that council will consider at the summer workshops and in August public hearings.
Ending: Staff will return to council with detailed budget workshop materials, the formal proposed budget and tax‑rate options; council members asked staff to prepare additional comparative charts and to invite further questions so council can direct tradeoffs before adoption.
