Page 17 - Kennedale Budget FY21

MANAGER’S MESSAGE

G E N E R A L F U N D
For the past two years, projections have anticipated continuing growth in General Fund revenues via
moderate growth of new development, increasing AV appraisals for existing properties, and steady incline
in sales tax receipts. While there is still reason for optimism regarding future growth and development,
there is also reason to be very cautious regarding AV and sales tax gains. Sales tax revenues in FY19-20 are

expected to decrease by ~2.3% due to the impacts of COVID-19. However, in FY20-21, they are
expected to increase by 5% over current year projections. Property values grew only slightly – with
appraised values estimated to increase only 2.7% over last year’s values – including construction newly-
added to the tax rolls.

A tax rate increase of nearly four cents from $0.734970 to $0.774085 is incorporated to support
this budget. The M&O Tax Rate – applied to property existing on the tax roll in 2019 plus new property
on the roll in 2020 – will produce a 9.9% increase in total property tax revenue to the General Fund. This

change in the total tax rate is also the result of maintaining the current debt service requirement for general
obligation (GO) debt, including the $2 million tax note recently issued and the planned FY20-21 issuance
of approximately $6M (reflected in the debt service tax rates for 2019 and 2020 outlined on the previous
page).

HIGHLIGHTS OF THE GENERAL FUND BUDGET INCLUDE:

 There are no compensation adjustments for civilian or public safety employees. Further, the
improvements made to the compensation plans in the last two years including the step-plans
for Fire and Police will be suspended unless additional revenue is appropriated. Total cost to
restore the step-plan funding for public safety is $121,017 and a 2% across-the-board
increase for civilian employees would likely cost an additional $90,000.

 Year two of the phased plan to replace two self-contained breathing apparatus (SCBA) for the
fire department is included at a cost of $19,000.
 An expected 2% increase in employee health insurance costs is included and assumes the City
will absorb this estimated $19,031 increase as no compensation increases are provided in
this budget.

The General Fund will continue to experience a fund balance drawdown of $309,441 and is
expected to end FY20-21 with a fund balance of 8.3% of expenditures – below the adopted
policy objective of 18%-25%.

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