Page 15 - City of Kennedale Adopted Budget FY22

G E N E R A L F U N D
There were, of course, concerns among public finance professionals regarding impacts that the COVID-
19 pandemic might have on sales tax revenue – and perhaps even property valuations. Though we are not
yet clear of this threat, the City of Kennedale has not seen significant negative effects thus far. Property
values grew by 5.74 % (compared to 2.7% last year). Sales Tax revenue is projected to increase modestly
by 4%. There is still reason for conservative optimism regarding AV value growth, new development, and
sales tax revenues. However, locally, there has been a shift in leadership, elected officials, and frontline
staffing in recent months.

For these reasons, a stable tax rate equal to that of the previous year – $0.774085 – is proposed to
support the budget as presented. The M&O Tax Rate – applied to property existing on the tax roll in
2020 plus new property on the roll in 2021 – will produce a 1.86% 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 $6 million COs planned for issuance
in September.

HIGHLIGHTS OF THE GENERAL FUND BUDGET INCLUDE:

▪ As presented, civilian employees would receive a 2% “cost of living” adjustment and
public safety step plans would remain in place. The Council made an impactful
decision by reimplementing the step plan and offering adjustments to civilian
employees that moved most to a compensation level of about 90% of the 2019 salary
study. Though there has been increased turnover recently among civilian employees,
this is often the case when a change in management occurs. Further, these more
competitive salary levels will allow the organization to continue attracting quality
candidates as well as help us to retain current staff. By offering a 2% adjustment for
the coming fiscal year, the Council can help salaries keep pace with the market and
lessen the necessity of a future significant adjustment.

▪ An expected 9.84% increase in employee health insurance costs is included with the
assumption that the City will absorb this estimated $44,256 increase.

If adopted as proposed, the General Fund will continue to experience a fund balance drawdown of
$903,536 and is expected to end FY21-22 with a fund balance of 11.1% of expenditures – still below
the adopted policy objective of 18%-25%.

W A T E R A N D S E W E R F U N D
This budget proposes no change in water and sewer utility rates or Stormwater Utility Fees.
Contracts for both the purchase of potable water from and the operation and maintenance (O&M) of the
Kennedale utility systems by Arlington Water Utilities (AWU) became effective on March 29, 2019, with
a planned review to occur after two years. This review is currently pending. Although this collaboration

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