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Farmers Branch finance director previews FY27 budget: reserve boost proposed, $12.8M for water projects
Summary
Finance Director Jay Patel presented the FY27 budget update on July 7, reporting strong sales-tax collections, a staff proposal to raise the revenue stabilization fund sweep threshold from $23.0 million to $23.5 million, and plans to invest $12.8 million in water and wastewater infrastructure funded from cash to avoid debt service.
At the July 7 Farmers Branch study session, Finance Director Jay Patel presented an update on the fiscal year 2026-27 budget, outlining revenue trends, proposed reserve policy changes and capital priorities.
Patel told the council that sales-tax collections remain strong and are expected to outperform prior years. He proposed increasing the revenue stabilization fund threshold so that any sales-tax collections above the threshold are transferred into the stabilization fund. "We are proposing to increase our revenue stabilization fund threshold from $23,000,000 to 23 and a half," he said, describing the change as a step to help absorb operating-cost impacts the city has been absorbing in recent years.
On utilities, Patel said water rates should be viewed in the context of system age, size and deferred maintenance, and that Farmers Branch currently manages its utility system with zero debt. "Our city, this upcoming fiscal year, is investing $12,800,000 in water, wastewater infrastructure needs," Patel said, adding that the city prefers cash funding to avoid decades of interest payments and to preserve borrowing capacity for future councils.
Patel also noted a change on the budget priority slide: the Firehouse Theater partnership line was struck and the city is seeking to incorporate lobby and kitchen repairs within the operating budget per recent council direction.
During questions, a councilmember asked whether the pedestrian traffic improvements listed in a slide include sidewalks; Patel affirmed the broader intent of pedestrian improvements and said staff would confirm specifics. Councilwoman Villafranca asked for more detail on a proposed community garden and on the Code Cares program; Patel said staff is exploring options that would be budget neutral, including public-private partnerships and potential grant opportunities through the U.S. Department of Agriculture, and that staff would follow up with scheduling and additional details.
Patel told the council that no immediate direction was required and that more substantive budget discussion would occur in August after certified property values are available.
No formal budget decisions were made at the study session; the presentation was informational and staff will return with further details.
