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Farmers Branch officials are preparing for a tighter budget year, with flat revenue projections, rising emergency communications costs and major water and wastewater needs shaping early talks over the city’s fiscal 2026-27 spending plan.
Finance Director Jay Patel told the Farmers Branch City Council during a June 2 study session that staff is starting to match council priorities with available funding. A proposed budget is expected to go to the council by July 31.
Early projections show limited growth. Property tax estimates are currently flat, with final certified values expected in July. Sales tax revenue is stable compared with the previous year, but Patel said it remains tied to broader economic conditions.
Costs are also rising.
Patel said the city expects higher costs for health care, fuel, contracts, supplies and economic development incentives. The largest immediate increase discussed involved the North Texas Emergency Communications Center, or NTECC, the regional emergency communications center used by the city.
Patel said Farmers Branch was notified in late May that its upcoming NTECC operating cost would be $5.44 million, an increase of about $2.6 million. The council has already allocated $675,000 to help offset the increase, but the city still must absorb the remaining cost.
“It is a substantial amount that we’re having to plan our upcoming budget and account for,” Patel said.
Staff said the increase is tied to a change in NTECC’s allocation formula and the city’s use of the system. Council member Roger Neal called it “a pretty big hit” and asked whether the city is reviewing its usage to look for savings.
Water and wastewater costs are another major pressure point.
Patel said wholesale costs have risen over the past decade, while Farmers Branch had not passed along water rate increases for 10 years before the most recent increase. That created a gap between the cost of maintaining the system and the money available to pay for it, he said.
The city’s rate plan is expected to help fund about $65 million in water and wastewater projects over five years, including work tied to pipes more than 60 years old. Patel said the city also expects about $17 million in costs next year tied to purchasing or treating water.
The rate plan included a 15% increase in the current year and calls for 12% increases in the next two fiscal years. The council also added a 10% discount for senior and disabled residents.
Council member Elizabeth Villafranca urged caution as the city considers future spending.
“Just because we have a dollar in our pocket doesn’t mean we should spend it,” Villafranca said. “I think we need to be really careful with that budget surplus.”
Staff also reviewed programs and projects that could shape future spending.
Derek Hull, community services director, said the city’s minor home repair program provides eligible homeowners grants of up to $5,000 for certain repairs. The program is for owner-occupied homes that meet property value and homestead exemption requirements. It is not income based.
Hull said the city completed nine projects in fiscal 2025 and six so far in fiscal 2026. One project is underway, and two more are expected to begin by July 15.
The city currently has one contractor working through the program. Hull said staff plans to seek more contractors so multiple projects can move at the same time.
“This is a wonderful program that I think people really don’t know about,” Villafranca said.
Parks Director Robert Diaz also updated the council on city facilities and Mercer Park.
Diaz said a facilities assessment reviewed 16 locations and 28 buildings. Overall, he said, city facilities scored in the good range.
Mercer Park is at 60% design. The base plan includes a playground, pavilion, pickleball court and plaza areas. Diaz said staff hopes to start work later this year and open the park sometime next year.
The council did not take action on the budget during the study session. Staffing and compensation are expected to be discussed at an upcoming study session, followed by employee benefits.
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