Page 16 - Kennedale Budget FY21

MANAGER’S MESSAGE

This budget is the product of several months of work by the City’s Leadership Team as they serve the public
and incorporate policy preferences expressed by the City Council. Each department evaluates the services
provided throughout the past year and then weighs that against the service delivery desired by the citizens of

Kennedale going forward. That process includes close scrutiny of existing expenditures and program
outcomes to determine cost effectiveness and, specifically, whether or not savings can be achieved. Each
Director reviews their budget proposal with the Finance Office and with the City Manager before
departmental budgets are evaluated for inclusion in the Program of Services to be considered by the City
Council. Additionally, new or expanded programs are evaluated and – as determined appropriate –
recommended. While new program requests were assessed to provide a clearer picture of operational
needs, no new programs have been included in this proposed budget.

In October 2019 – shortly following the adoption of the FY19-20 budget – our bond rating agency,
Standard & Poor’s (S&P), reviewed the City and, while the GO rating was not lowered, the outlook was
revised from “stable” to “negative” as a result of a decision by Council for FY18-19 to reduce the tax rate by
five cents, thereby forcing a drawdown of the General Fund balance to less than 16%. Steps were
immediately implemented to improve the budgeted fund balance for FY19-20 in an attempt to reduce the
likelihood of further negative consideration or a downgraded bond rating. Budgetary savings combined with

a better than projected beginning fund balance did, in fact, result in a projected ending General Fund
balance for FY19-20 of approximately 12.5% (rather than the budgeted 7.9%) of annual expenditures.

This budget implements the adoption of a tax rate that would generate the maximum revenue possible
without exceeding the voter approval (rollback) tax rate. This is the minimum tax rate that would allow for
continued provision of very minimal services and a positive – yet still insufficient – FY20-21 General Fund
ending balance, which is expected to further diminish to 8.3% with the adoption of this budget.

T A X R A T E C A L C U L A T I O N S
2019 Total Tax Rate $0.734970 ELEMENTS OF THE AD VALOREM
M&O Rate $0.544429
Debt Service Rate $0.190495 (PROPERTY) TAX RATE

2020 No-New-Revenue $0.756520 Maintenance and Operations (M&O)
(“Effective”) Tax Rate (NNR)
The portion of the tax rate that supports
2020 Voter-Approval $0.774086 ongoing General Fund operations
(“Rollback”) Tax Rate (VATR)
Interest and Sinking (I&S) or Debt Service
2020 Proposed Tax Rate $0.774085
M&O Rate $0.582686 The portion of the tax rate that supports
Debt Service Rate $0.191399 payments on debt for general government
(not utility) improvements
A V A I L A B L E E X E M P T I O N S
Over 65 $60,000 Total Tax Rate = M&O + I&S
Disabled Person $60,000

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