Plano City Council approves $124 million budget with rate increases for water and sewer

The City of Plano City Council meeting held on July 30, 2025, focused on the city’s financial strategies and budget proposals for the upcoming fiscal year. The meeting began with a review of the city’s sales tax cap policy, which has been in place since 2008. This policy has proven effective, contributing significantly to the city’s financial health, including a $25 million allocation for capital maintenance and the establishment of a rainy day fund.

City officials reported that the sales tax revenue for the fiscal year 2023-2024 is projected to reach $118 million, with an anticipated increase to $124 million for 2024-2025. The council has also incorporated an inflationary factor into the sales tax calculations to mitigate the impacts of rising costs.

Building and development revenues are expected to stabilize, with officials projecting $8 million in fees despite an initial forecast of a 15% decline. The budget for the upcoming year includes no new programs or services, maintaining a focus on existing commitments. A 3% salary increase for all employees, alongside a $5.2 million investment in a wage determination tool, was also highlighted.

Public safety funding will see an increase of $750,000, aimed at enhancing crime prevention efforts. However, the North Texas Municipal Water District has announced a significant cost increase of $12.8 million, leading to an 8% rate hike for both water and sewer services, effective October 1.

The capital improvement program is projected at $319 million, primarily for street improvements and public safety facilities, including new police and fire stations. The city plans to issue $98 million in general obligation debt to finance these projects.

The meeting concluded with a discussion on the city’s financial policies, emphasizing the importance of maintaining a healthy fund balance. The city aims for a target of 60 days of working capital, currently at 58 days, and is working towards strengthening its rainy day fund, which stands at $4.5 million against a target of $20 million.

Overall, the meeting underscored the city’s commitment to fiscal responsibility while addressing the needs of its residents through strategic budgeting and planning. Further details on the budget will be discussed in the upcoming work session scheduled for August 14.