Page 6 - BudgetBookCover_FY26_Adopted.pdf

City Manager's Budget Message

September 16, 2025

Honorable Mayor and City Council,

I am proud to present the Proposed Fiscal Year 2025-2026 (FY 26) Budget totaling $534 million. This balanced budget reflects our
commitment to Taking Care of Business Today while Investing in Tomorrow. Thanks to the conservative planning of this City
Council and the dedication of our internal team, this budget stays focused on core service delivery, sound financial management,
and continued progress on your strategic priorities while laying the foundation for a strong and sustainable future. As other cities
face tough decisions, we remain in a position of strength, not by chance, but by design.

In preparing this proposal, City leadership conducted an intensive internal review of expenditures to identify cost-saving opportunities.
We evaluated new or adjusted user fees to support long-term cost recovery and reviewed vacant positions while limiting new hires to
critical roles. Despite current economic pressures, we propose no reduction in manpower. Instead, we are investing in our existing
workforce through targeted skill-building and professional development. While a cost-of-living increase is not included in this budget,
we are providing a lump sum payment, funded from savings in our FY2025 budget, to recognize employee contributions. Health
insurance premiums for employees will also remain unchanged. Our commitment to delivering high-quality service to our residents is
unwavering. This proposed budget supports upgrades to internal systems and technologies that will strengthen customer service,
enhance transparency, and prepare our organization for long-term stability. It also prioritizes public safety by funding necessary
vehicle replacements and ensuring competitive pay to attract and retain well-qualified police officers and firefighters.

The FY26 General Fund totals $200.4 million, representing a 3.1% increase from last year. We project $147 million in property tax
revenue and propose maintaining the current tax rate of $0.66 per $100 of value for the fourth consecutive year. Existing property
values rose 2%, while new property values will generate an additional $3. million. The average taxable home value is $234,000, with
the homestead exemption holding steady at 17.5%. The owner of an average-value home will pay approximately $1,274 annually in
city property taxes.

Sales tax growth is expected to remain flat, with projected revenue of $85.6 million, slightly below last year’s total. The city collects
2% of sales taxes, allocated as follows: 1% General Fund, ¼% Park Venue Fund, ¼% Community Policing Fund, ¼% Street
Maintenance, and ¼% Epic & Epic Waters Fund. This budget includes a planned 4.5% rate increase for water and wastewater
services, driven by higher pass-through costs for purchase and treatment and the continued expansion of the city’s utility system.

While delivering essential services is our priority, this budget also advances the City Council’s goals. Key initiatives include downtown
revitalization, attainable housing, advancing our infrastructure master plan, healthcare access, and quality-of-life enhancements that
make us a top destination of choice. We continue to manage growth in the southern sector of our city while welcoming new retail,
entertainment, and residential developments. Another important initiative provided for in this budget includes a possible May 2026
bond election that will allow residents to weigh in on future city investments. Our AAA bond rating ensures access to low-interest
financing to support these future needs. Discipline, stability, and momentum with an emphasis on forward thinking are reflected in this
budget. It protects the progress we've made and helps us get back to the future, allowing us to continue progressive planning.
Although challenges persist, our steady and conservative approach has positioned us to continue delivering the services our
residents expect and deserve. Thank you for your leadership and continued partnership in keeping us Grand Prairie Proud!

William A. Hills
City Manager

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