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Farmers Branch plans to invest $12.8 million in water and wastewater infrastructure next fiscal year without issuing debt, a strategy Finance Director Jay Patel said would avoid millions of dollars in long-term interest costs.
The City Council reviewed the proposed investment during its July 7 study session as staff continued developing the fiscal 2026-27 budget. Council members took no action, and Patel said more detailed tax-rate discussions will follow after the city receives certified property values.
Patel said most cities of a similar size would finance an infrastructure investment of that magnitude over 20 years. Doing so could add about $900,000 a year to the operating budget and cost roughly $5 million in interest, he said.
“Our approach of cash funding our projects avoids decades of interest payments for our community members,” Patel said.
He said the strategy also preserves the city’s borrowing capacity for future projects and regional infrastructure needs.
Farmers Branch operates its water and wastewater utility without debt. Patel said utility rates vary among cities because systems differ in age, size, customer base and infrastructure needs.
The proposed budget also would raise the sales tax threshold used for the city’s revenue stabilization fund from $23 million to $23.5 million. Farmers Branch currently transfers collections above $23 million into the fund.
Patel said sales tax revenue has strengthened in recent months and is expected to outperform prior years. However, increased business recruitment also has raised the city’s incentive payments, prompting staff to recommend retaining an additional $500,000 in the operating budget before transferring revenue.
Another significant budget pressure is the city’s employee health fund, which may need an additional $600,000 for the plan year beginning Jan. 1.
Human Resources Director Jeffrey Ross said the projected increase reflects anticipated medical claims, pharmacy expenses and higher stop-loss insurance premiums. The city has included the increase in its budget planning.
Farmers Branch maintains a self-funded health plan, meaning the city pays employee claims directly. Stop-loss insurance reimburses the city for costs above $200,000 on exceptionally large claims.
Staff recommends retaining UMR, part of UnitedHealthcare, as the medical plan administrator while changing pharmacy administrators when the current agreements expire at the end of the year.
Ross said UMR’s proposal could save about $52,700 annually in administrative costs and increase annual administrative credits from $30,000 to $50,000. Those credits can be used for plan expenses, wellness programs and employee health initiatives.
He said the savings involve plan administration and do not offset the $600,000 increase, which is tied largely to projected claims and rising medical costs.
The proposed pharmacy change is intended to reduce costs and improve clinical programs. Pharmacy expenses account for about 15% of total health plan spending.
Employees with existing prescriptions would need to provide their pharmacies with updated plan information. Retaining UMR would create little disruption to medical coverage because the provider network would remain unchanged.
Council members also questioned the rollout of Code Cares, a developing volunteer program intended to help residents who are elderly or otherwise unable to maintain their properties address code compliance problems.
Community Services Director Derek Hull said the city plans to connect volunteers, faith-based organizations and businesses with residents who may be unable to maintain their properties. The work could include landscaping, outdoor cleanup and other projects that do not require permits.
The program also could assist residents who do not qualify for the city’s minor home repair program or need help with work that program does not cover.
Hull said staff began developing Code Cares in 2023, later shifted attention to the minor home repair program and expanded partnerships with businesses and faith-based groups. Staff is now building the program’s framework and identifying volunteers and residents who may need assistance.
City Manager Ben Williamson said the goal is to use resources beyond the city budget and workforce.
“How can we have residents help residents and the city be part of that?” Williamson said.
Council member Elizabeth Villafranca said the program appeared to have advanced without enough council discussion about eligibility, volunteer safety and liability, and how residents and businesses would participate.
“It sounds like a great program, but I feel like we got ahead of ourselves,” Villafranca said.
She requested a future study session devoted to the program. Staff said Code Cares would be available citywide and that the council would receive additional updates as the program develops.
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