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Farmers Branch plans to keep its property tax rate unchanged for another year, but residents could see a roughly 12% increase in water and sewer rates under the city's proposed fiscal year 2026-27 budget.
The proposed budget totals about $178.5 million across all operating and capital funds. It maintains the city's property tax rate at 54.35 cents per $100 of taxable value while putting more than $22.3 million toward capital projects.
Although the tax rate would remain unchanged, the amount of property tax revenue collected by the city is expected to increase.
Farmers Branch's certified taxable value is approximately $10.57 billion, 4.31% higher than the previous year's certified tax roll. The city expects General Fund property tax revenue of $46.5 million, compared with $45.45 million in the current revised budget.
That means some property owners could still see higher city tax bills if their taxable values increase, even though the tax rate itself remains the same.
The city's Budget in Brief estimates that a homeowner with the average home value of $452,788 and a homestead exemption pays about $1,969 annually in city property taxes. Commercial properties generate about 72% of the city's property tax revenue, compared with about 28% from single-family homes.
However, residents could see a more direct increase on their utility bills.
The proposed budget recommends a cumulative water and sewer rate adjustment of approximately 12% across customer classes. The city says the increase is needed to keep the Water & Sewer Fund financially stable and bring rates closer to the cost of providing service.
Water and sewer operating expenditures are projected at $42.2 million, up from about $35.3 million in the current revised budget. The increase is driven primarily by higher wholesale water and wastewater treatment costs, infrastructure needs and other operating expenses.
According to the city's Budget in Brief, Farmers Branch did not increase water and wastewater rates between 2015 and 2024, despite increases in wholesale costs from Dallas Water Utilities and the Trinity River Authority.
The city also plans to use approximately $4.4 million from its accumulated Water & Sewer Fund balance for capital infrastructure. The fund is projected to end the fiscal year with about $3 million, within the city's established target range.
The proposed budget includes about $22.3 million for capital improvement projects, including street revitalization, pedestrian improvements, traffic signal rehabilitation, drainage improvements, utility replacements, park field lighting, Parks Master Plan projects, Valwood Park improvements and the Shoredale Lane water main replacement.
The city's Budget in Brief says about $12.8 million is planned for water and sewer infrastructure. Farmers Branch has maintained a pay-as-you-go approach to its Water & Sewer Fund, which remains debt-free.
Public safety also remains one of the city's largest expenses.
The proposed Police Department budget is about $23.2 million, compared with $20.9 million in the current revised budget. The Fire Department's proposed budget is approximately $17.1 million, up from $16.7 million.
The budget proposes step adjustments for public safety employees and a 1% increase for nonsworn employees. The city also plans a compensation study during the coming fiscal year.
City officials cite competition for employees, health care costs, inflation and increasing contract and service costs among the pressures on the budget.
The General Fund is expected to end fiscal year 2026-27 with approximately $21.7 million in reserves. That is above the city's 20%, or approximately 72-day, high reserve target, although slightly below its preferred 25%, or 90-day, target of approximately $22.2 million.
General Fund operating expenditures are proposed at approximately $92.8 million, down from $98.2 million in the revised 2025-26 budget. The city attributes much of the decrease to the removal of previous-year carryovers, open purchase orders and one-time expenditures rather than reductions in city services.
The 2026-27 budget is also the first annual budget developed under the city's new three-year strategic plan, adopted by the Farmers Branch City Council in February. The plan is intended to connect the city's longer-term priorities more closely with annual spending decisions.
The proposed budget still must be approved by the Farmers Branch City Council.
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