Sugar Land 4B board approves FY25 projections amendment, forwards FY26 budget to City Council

The Sugar Land 4B Corporation on Aug. 20 unanimously approved an amendment to its fiscal year 2025 projections and voted to forward a proposed fiscal year 2026 budget to the Sugar Land City Council for final approval.

The action followed a presentation by Staff member Justin Barrado, who said July sales-tax allocations were 16% higher than budgeted and August allocations were 8% higher, producing about $930,000 in additional revenue compared with the original FY25 estimate. Barrado said that higher-than-expected interest income and previously approved board amendments also factored into the revised FY25 outlook.

Board members were shown a financial summary that reflects the board-approved use of fund balance, including a $3.4 million allocation for Lake Point Green and about $3.6 million in additional investments drawn from the reserve for opportunities to support grants and other projects. Barrado said the FY25 projected ending fund balance includes accounting adjustments and an estimated available fund balance of roughly $12 million under one presentation method and an alternate presentation with about $10.8 million in fund balance after certain accrual adjustments.

Why it matters: the 4B tax fund underwrites redevelopment, events and place-making that the city says drives tourism and private investment. The board’s approval lets staff present the amendments and the FY26 funding plan to the City Council at its Sept. 16 meeting, a required step before expenditures are executed.

Key items in the FY26 proposal - Total revenues: Barrado described proposed FY26 revenues of roughly $10.2 million (driven primarily by sales tax) and nearly $700,000 in interest income. He noted two small recurring revenue items being carried forward from prior years. - Expenditures and program funding: Proposed FY26 expenditures include about $3.9 million for redevelopment programming (operating budget, incentives and sponsorship shares), transfers of $1.35 million to the general fund for staff cost allocations, and $2.64 million to the city’s general debt service fund to support bonds issued for the Imperial acquisition. - Capital and reserves: The capital program totaled $2.1 million, including $1.8 million for Eldridge Park improvements and $300,000 for fund-grant program projects. The board also approved a $2 million “reserve for opportunities,” described in the meeting as a general-purpose reserve available for new initiatives in FY26. - Debt: Barrado said the corporation has just over $16 million in outstanding sales-tax revenue bond principal, with scheduled maturity in FY36. He reported the coupon on the existing sales-tax revenue bonds at about 2.4% and the more recent Imperial-related issuance at about 4.2%.

Board discussion and clarifications Board member Billy asked about the mechanics of sales-tax accruals; Barrado explained that municipal sales-tax allocations are received two months after the underlying sales activity and that the presentation adjusts prior-period accruals to match the timing. Board members also questioned marketing and public-relations increases included in the FY26 draft. Allison (board member) confirmed a three-year agreement split across FY25–FY27 for the PR/marketing contract; staff said final contract approval will return to the board on Sept. 2 and remains contingent on that later vote.

Votes at a glance - Approval of minutes from the July and Aug. 5 joint Sugar Land Development Corporation and Sugar Land 4B meeting — outcome: approved (unanimous; individual votes not specified in transcript). - Approval of FY25 projections amendment — outcome: approved (unanimous; individual votes not specified in transcript). - Approval of proposed FY26 budget and recommendation to City Council — outcome: approved and forwarded to City Council for consideration on Sept. 16 (unanimous; individual votes not specified in transcript).

What’s next The board’s FY26 recommendation will be considered by Sugar Land City Council at its Sept. 16 meeting. The FY26 budget contains several items that require further board-level approvals (for example, the final PR/marketing agreement on Sept. 2), and staff said any line items contingent on later approvals will be adjusted if those approvals do not occur.