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Rising utility costs, aging infrastructure and concerns about affordability dominated discussion during the May 5 study session of the Farmers Branch City Council.
Finance Director Jay Patel outlined early priorities for the city’s fiscal year 2026-27 budget, including major investments in water and wastewater infrastructure, traffic improvements, facility maintenance and neighborhood projects.
The city plans to increase annual water and wastewater capital funding from $9 million to $12.8 million next year as part of a long-term effort to address aging infrastructure.
Patel said previously approved utility rate increases are intended to fund those projects without issuing additional debt.
“The only way this is possible is due to the plan that was passed by council to make sure that we’re increasing water rates at a level where we can fund that operation and prevent us from issuing additional debt,” Patel said.
Council members repeatedly returned to the impact those increases are having on residents.
“Fuel is high, groceries are high, everything is so high right now,” council member Elizabeth Villafranca said. “Another 12% increase seems like a lot in these times.”
Discussion also focused on how the city explains spending decisions to residents. Council member Roger Neal asked for clearer public breakdowns showing where water-rate revenue and event funding are being spent.
“It’d be nice to be able to share with them, okay, yeah, we’ve taken this money from you, but here’s what we’re actually going to do with it,” Neal said.
Mayor Terry Lynne said the city faces increasing pressure to balance infrastructure needs with affordability concerns.
“We have a lot of people who’ve been in this city for many, many years,” Lynne said. “Young families can’t necessarily afford to live here. We are not the starter-home city that we once were.”
Patel also warned council members about proposed state legislation that could significantly reduce Farmers Branch sales tax revenue by changing how local sales taxes are distributed. Because of the city’s large warehouse and commercial base, Patel estimated the city could lose up to $5 million annually if Texas moves from a point-of-sale to point-of-destination model.
The city currently directs sales tax revenue above $23 million into a revenue stabilization fund intended to cushion against future economic or legislative changes.
Earlier in the meeting, council members reviewed possible monument signage projects for neighborhoods and city entry corridors. Staff presented preliminary concepts for both static and digital signs, with electronic versions estimated at about $45,700 each and static signs estimated at roughly $30,000 each before site preparation costs.
Neal said the signs could help reinforce neighborhood identity as beautification projects continue across the city.
“Some of the residents are very proud of their neighborhoods,” Neal said.
Several council members supported exploring the idea but requested additional design options and maintenance information before moving forward. Staff said the project would eventually go through a formal request-for-proposals process.
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