FY2027 Budget Work Session

On Tuesday, May 19, 2026, the Fort Worth City Council held a budget work session on the FY2027 Budget, convened by Mayor Mattie Parker at 11:00 a.m. in the City Council Work Session Room. The session focused on a proposed street maintenance fee, an update on property and sales tax revenues, and a budget response on the Street Maintenance PayGo Program. The meeting adjourned at 12:17 p.m.

Consent Calendar

• No consent calendar items were listed or discussed.

Public Comments & Testimony

• No public comments were made during the meeting.

Discussion Items

Budget Response BR27-001: Street Maintenance PayGo Program Delivery Update Chief Transformation Officer Christianne Simmons presented a proactive budget response addressing the effectiveness of TPW's current street maintenance PayGo delivery and the department's capacity to spend additional funding. No council questions were raised on the response.

Street Maintenance Fee Proposal Lane Zarate (TPW Assistant Director) and Trey Shanks (Freese & Nichols Inc.) presented a detailed proposal for a dedicated street maintenance fee to address a $66 million annual funding gap. The fee is designed as a supplemental, usage-based charge using vehicle miles traveled (VMT) derived from the Institute of Transportation Engineers' Trip Generation Manual.

• The proposed residential fee is $3 per month per single-family dwelling unit.
• For all other properties, charges are prorated based on property type and size (e.g., apartment complexes, schools, hotels, retail, offices). Examples shown: an apartment complex ~$440/month, a school ~$180/month, a church ~$65/month, an Amazon fulfillment center ~$2,700/month.
• The fee is estimated to generate $27.4 million annually (about 40% from residential properties, 60% from non-residential).
• Implementation would begin in spring 2028 to align with a new water department billing system, allowing an 18-month window for public engagement and process development.
• If adopted, the fee would be used 25% in-house for preservation (e.g., crack sealing, surface sealing) and 75% contracted for heavier maintenance (e.g., mill and overlay, panel replacement).
• Projected benefits: increase pavement life by 12% per year, achieve a five-year preservation cycle for all good streets, and avoid an estimated $126 million per year in future reconstruction costs (comparable to preventing one full bond program's worth of deterioration annually).

Council member questions and discussion included:

• Council Member Beck asked for examples of preservation vs. heavy maintenance. Lane Zarate explained that for asphalt, preservation includes crack sealing and surface sealing; heavy maintenance includes mill and overlay. For concrete, preservation is joint/crack sealing; heavy maintenance is panel replacement.
• Council Member Flores inquired about the year-over-year data starting point (2018 vs. later). Zarate responded that the data covers 5 years (from the 2022 condition assessment to the 2026 assessment). He also asked about fog seal; Zarate described it as an asphalt liquid that creates a fresh surface coat, noting it is cheaper than crack seal.
• Council Member Hall asked where liquor stores and car washes fall in the property categories. Trey Shanks responded that car washes are in auto services and liquor stores in retail.
• Council Member Beck suggested showing how many red streets could be tackled with the fee. Zarate explained that the fee helps avoid incurring future costs by slowing backlog growth, rather than directly saving bond money now.
• Council Member Lauersdorf emphasized communication and asked about school district involvement. Zarate stated that school districts were invited but only universities attended. Lauersdorf offered to connect staff with school districts for one-on-one meetings.
• Council Member Peoples expressed strong support for the fee, stating that most people, once informed, understand and support it.
• Council Member Crain asked about shopping centers – whether the center or individual businesses pay. Zarate responded that the property owner receives the bill. Crain raised concerns about small businesses and suggested a different treatment. Zarate noted that non-usage-based exemptions would require a legal opinion and could break the fee's defensibility. Crain also asked about contractor capacity; Zarate confirmed that the contracting community is comfortable with up to $20–25 million in additional contract maintenance per year, and the proposed fee's contract portion ($19 million) falls within that range.
• Council Member Flores asked how the fee impacts PayGo funding. Zarate responded that the fee is supplemental and does not change the need to keep existing PayGo revenue.
• City Manager Chapa warned against non-usage-based exemptions, citing a slippery slope of legal challenges if the fee is not evenly applied.

Property & Sales Tax Update Brady Kirk (FWLab Assistant Director) provided an update on property and sales tax revenues, key to closing the FY2027 budget gap.

• Property Tax: The April 2026 preliminary values show about 8.5% growth overall, driven by commercial and new construction, with single-family residential values appearing flat. Protests are already at $18 billion under protest in Tarrant County (versus ~$20 million last April), which adds uncertainty to July certified values. A new business personal property exemption (increased from $2,500 to $125,000) is estimated to reduce general fund revenue by about $5 million (slightly less than the prior $6 million estimate).
• Sales Tax: For FY2026, collections are tracking close to the budgeted $263 million, with a projected year-end total of $261.5 million (about 0.5% under budget). For FY2027, two scenarios were presented: a high-growth scenario of $276 million and a low-growth scenario of $267 million. The July 2026 payment (reflecting May activity) will be the last data point used for setting the FY2027 budget.
• Unused Increment: The city has significant unused increment from prior years, allowing a flat tax rate even with some existing value growth.

Key Outcomes

• No formal votes were taken; the session was informational.
• Staff will refine the street maintenance fee proposal, conduct public engagement, and provide additional data (e.g., a graph showing the impact on red street backlog) as requested.
• The City Manager's office will coordinate with school districts for one-on-one briefings, as suggested by Council Member Lauersdorf.
• The proposed budget for FY2027 will be presented to the council in August 2026, with adoption expected in September 2026.
• Council Member Hill requested detailed budget binders for the FY2027 proposed budget; City Manager Chapa indicated binders would be available in August.