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Coppell staff warn of widening "Austin Gap," outline strategies to balance five-year forecast
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Summary
City staff presented a five-year forecast showing expenditures growing faster than revenues — staff called the shortfall the "Austin Gap" — and laid out department prioritization, requested items and strategies to narrow a projected structural shortfall ahead of the FY26 budget.
City of Coppell staff told the City Council at a work session that the city’s five-year financial forecast shows expenditures outpacing revenues and produced a planning shortfall staff called the “Austin Gap.”
The presentation, led by Vanessa Parker, assistant director of strategic financial engagement, and Adam Richter, assistant director of community experiences, covered fiscal years 2025–29 and described the forecast as an internal planning tool that “plays a critical role in helping staff identify long term trends, anticipate challenges, and develop strategies,” Parker said.
The forecast projects general-fund operating expenditures rising to roughly $79 million, up from about $74.3 million this year, and identified $3 million in new, department-submitted general fund requests on top of $79 million in baseline operational projections. Parker said the combination leaves a planning shortfall that staff calculated at about $6.3 million when the requests are added. “We are using the 3.45 tax, property tax revenue increase,” Parker said, and noted council direction at a prior retreat to use a 3.499 rate scenario in revenue modeling.
Why it matters: staff said recent state law changes and caps on revenue growth mean property value growth no longer produces proportional revenue increases for the city. “We use the five-year forecast to introduce discipline into the understanding that our revenues are now capped because of the Austin Gap,” City Manager Mike Landers said, referencing state restrictions discussed earlier in the presentation.
Key details: assistant directors ranked and prioritized 30 departmental requests during a two-day retreat. Day 1 produced a master list of requests totaling roughly $3 million spread across departments; day 2 reduced requests by 19 items and about $2.5 million through reallocation and identification of alternative funding sources, Parker said. Staff also presented three potential strategies to lower transfers from the general fund: a $1.1 million reduction in the transfer to the self-funded insurance fund, a $1 million reduction in the transfer to the Infrastructure Maintenance Fund (IMF) offset by increased IMF interest income, and a $500,000 reduction in the transfer to the capital replacement fund.
Council questions focused on the makeup of the $79 million operational projection (staff described that as the current operations budget increased by a roughly 4% inflation proxy plus specific built-in increases for salaries and benefits, such as a $1.5 million increase for fire and police), the source and permanence of the $3 million of new requests (staff said departments vetted and prioritized requests internally and that some requests may be charged to non-general funds), and the assumptions behind the revenue scenario (Parker and staff tied revenue limits to recent state actions, including SB 2, which staff cited as constraining revenue growth).
What happens next: staff said the forecast gives time to develop strategies ahead of formal budget deliberations. The presentation and the departmental prioritization will inform the FY26 proposed budget and the upcoming budget workshops; staff asked council to use the forecast information to guide direction on priorities and any program changes.
Ending: Councilmembers praised the transparency and modeling but noted the forecast is a planning tool, not a budget. Several asked staff to return with more detail on the prioritized requests (staff pointed council to pages 41–57 of the forecast packet for itemized requests) and to continue work on alternatives, including use of reserves, automation and contract reviews to reduce costs.
