Arlington City Council Regular Meeting - August 11, 2026: Budget and Tax Rate Discussion
Arlington City Council Regular Meeting - August 11, 2026: Budget and Tax Rate Discussion
The Arlington City Council held a regular meeting on August 11, 2026, to discuss the FY2027 budget, including health plan modifications, accrued sick leave policy, and the proposed property tax rate. The council adopted resolutions setting the maximum tax rate for consideration and scheduling a budget public hearing. No public comments were made during citizen participation.
Discussion Items
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FY2027 Budget Presentation: City Manager Trey Yelverton and his team presented the proposed budget, emphasizing "financial resiliency". Key points included:
- Rising costs for city equipment: patrol cars from $51,000 to $83,000 over five years; road rebuilding from $1.4M to $1.8M per mile.
- Past cuts: $7.7 million in FY2026, 42 eliminated positions (84 over five years), reduced Saturday hours at the Action Center, reduced park mowing, and 84 vehicles removed from fleet.
- Budget structure: General fund (police, fire, libraries, parks), capital projects, debt service, enterprise funds (legally restricted). Revenue sources: property taxes (45%), sales tax (29% – 53% from non-residents), fees/grants.
- Sales tax from entertainment district helps keep property tax rate lower than neighboring cities; hotel taxes are restricted to tourism by state law.
- City's portion of property tax bill is ~25% of total (rest goes to school district, county, etc.). Arlington already provides the maximum property tax exemptions allowed by state law.
- Investments: more in police than collected in property taxes; fire/911 investments exceed general sales tax; street maintenance sales tax renewal dedicates all funds to roads.
- Results: crime down 12%, four-person fire station staffing, 85 miles of roads repaved since 2022.
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Health Plan Modifications: Trey discussed the city's total compensation approach. Current health plans (high deductible and co-pay) with city sharing 87.5% / employee 12.5% (transitioning from 90/10 last year). For FY2027, the city proposes moving to 85/15 plus a 10% rate adjustment due to rising costs. To offset impact, the city will provide a one-time $500 contribution per employee (HSA for high deductible plan; rate reduction for co-pay plan). Analysis showed:
- 64% of employees see no net impact on their raise (3% + $500).
- 5% of employees face an impact up to $1,500 (primarily those with family coverage).
- Councilmember raised concern about age-based rating; staff will explore.
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Accrued Sick Leave Policy (Terminal Pay): Trey explained the current policy: vacation payout is always given; sick leave payout is limited to retirees under specific criteria (20 years city service, or age 60 with 5 years city service, or rule of 70) to avoid abuse where employees claimed retirement but went to work elsewhere. Lifetime cap of 960 hours.
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Unfunded Priority Requests: Over $15 million in unfunded department requests were identified. Key items discussed:
- Real-time crime center expansion to 24/7 staffing (including drone as first responder) – unfunded.
- Equipment for police gas masks and firefighter bunker gear – unfunded.
- Homelessness services: diversion program ($150,000) and Arlington Life Shelter water bill offset ($50,000) – unfunded. City staff explained diversion uses one-time payments (avg. $1,400) to prevent homelessness. Life Shelter could add ~10 beds if water bill waived.
- Transportation: restoring Handy Tran service area ($100,000) – currently funding not included; city is seeking cost-sharing with neighboring cities. Safe Streets Arlington implementation plan – unfunded.
- Street maintenance: $5 million increase proposed, but long-term need is $30–60 million more annually.
- Workers' compensation fund and self-insurance fund need replenishment (current litigation fund down to ~$3 million from $12 million).
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Tax Rate Discussion: The proposed tax rate is $0.6298 per $100 valuation (same as last year). Because of appraisal district actions (tax freeze, low reappraisal), the calculated no-new-revenue rate is $0.636334, which is higher than the proposed rate. The city manager explained that setting a maximum rate for consideration is a policy decision that will impact service levels. Councilmembers expressed varying views:
- Councilmember Ware supported no-new-revenue as a ceiling to send a message to the Tarrant Appraisal District (TAD).
- Councilmember Hogg favored the current proposed rate due to legislative uncertainty and sustainability concerns.
- Councilmember Pham warned about TAD board elections and past tax freezes causing shortfalls.
- Councilmember Shelton favored moving to no-new-revenue to enhance services at a small cost to residents (~$15/year per household).
- Mayor and other members expressed caution about raising taxes given unknown future state mandates and TAD actions.
- Consensus emerged to set the ceiling at the no-new-revenue rate ($0.636334) for discussion, but not necessarily to adopt that rate.
Key Outcomes
- Resolution 4.1 (Property Tax Rate Ceiling): Council voted to set the maximum proposed tax rate at the no-new-revenue rate of $0.636334 per $100 valuation. Motion by Councilmember Garcia Dumas, second by Councilmember Shelton. Passed unanimously.
- Resolution 4.2 (Budget Public Hearing): Council voted to call a public hearing for the FY2027 operating budget. Motion by Councilmember Hunter, second by Councilmember Ware. Passed unanimously.
- Next steps: Budget town halls will be held in the coming weeks; final budget adoption scheduled for September 8 and 15, 2026.
Meeting Transcript
Parents get to know each other. It is probably our best event all year. This is a program that the YMCA has run for literally decades to help those adults with a range of abilities and disabilities lead a great life. Familiares y amigos desde las bancas celebrated, cada carrera del equipo de sus amores, convertiendo el Vandergriff part in Parque de Pelotais Liga. Right. It's like watching Texas Rangers. And every single time I hang out with my friends, like the whole squad. So amazing. Oh yeah, it's really fun. It's my first time playing baseball, and I'm really excited. And we mainly help people 50 and older gain strength, boost stamina, and just enhance their dreams of longevity and enjoying retirement. That's why we exist is to help this community that's largely underserved in the fitness marketplace, be and enjoy everything that they work so hard to achieve. I'm a man of faith, and I've always derived my inner strength from my faith in God. And inner strength is it doesn't have to be spiritual like that, but it's one of those things where I've always thought people have it within themselves to begin to change their lives, to begin to grow their lives. If you just have the support that you need and maybe the right tools, you can do almost anything you set your mind to. What it does for me is it helps me realize I've got a bigger purpose than just myself. The American dream for me is the ability to make a difference in my community while also having the leverage to be there and be a present husband and be involved in my children's lives. I gave that to you. Good afternoon, everybody. It is three. Oh, one PM on August eleventh. We're going to go ahead and call the afternoon session of the Arlington City Council session to order. We're going to jump right in to our budget discussion with two point one. Usually do that at the end of our presentation. So last week I got kind of forgetful regarding that, so I skipped it at the end, and we were rushed to do some other things. So I thought I'd start actually by today showing you the uh the budget video that we put out publicly that Jay Warren and his team have worked on to prepare. That's Arlington's proposed budget. Hundreds of pages, and it's kind of hard to absorb. So we're gonna break it down for you in a couple of minutes, and let's start with a little bit of context here. You know, last year Arlington made some hard calls, not the kind that gets you applause, the kind that quietly keeps the lights on. We tightened spending and we stayed balanced. And honestly, that work never really stops. So this year's budget isn't about doing more. It's about something just as important. Prioritizing spending on the services that matter the most to you. Now you've felt inflation this year, there's no doubt. Groceries, gas, everything. Well, the city feels it too, just at a much bigger scale. Cities buy specialized stuff, police cars, fire trucks, the software that runs 911, and that stuff has gotten really expensive. Consider this. Five years ago, a patrol car cost around $51,000. What does it cost today? Try $83,000. One mile of rebuilt road, 1.4 million dollars in 2021, and today it's almost 1.8 million. Now that's not waste. That's just what it costs to keep a city running today. So here's a question we hear a lot. Okay, but when my budget gets tight, I cut back. Why can't the city? Folks, it's a fair question, and here's the thing.
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