Red Oak council adopts FY2025–26 budget, raises tax rate and approves $2025 tax notes

The Red Oak City Council on Aug. 18, 2025, adopted the city’s fiscal year 2025–26 operating budget, approved a property tax rate of $0.695306 per $100 of assessed value, ratified the resulting increase in property tax revenue and authorized the sale of tax notes after a competitive bidding process that yielded a low interest bid from Regions Bank.

Council met in a special called session at 6:30 p.m. at the Red Oak Council Chamber. Mayor Pro Tem Willie Franklin presided; Mayor Stanfield was absent but noted. City staff presented the budget and tax items and Hilltop Securities presented results of the city’s competitive sale of tax notes.

The council adopted Ordinance No. 25-039 to approve the budget for the fiscal year beginning Oct. 1, 2025, and ending Sept. 30, 2026. The ordinance was adopted on a recorded roll-call vote with all five council members voting yes (Miller, Franklin, Blake, Smith and Flannery). The council had held a public hearing on the proposed budget on Aug. 11, 2025, and reviewed the document during two budget workshops on July 21 and July 30, 2025. City staff said the budget is based on the assumptions discussed at those workshops and on the city’s strategic plan.

During the same meeting the council held the required public hearing and then adopted Ordinance No. 25-040 to set the city’s 2025 tax rate at $0.695306 per $100 of assessed value, split into a maintenance and operations (M&O) rate of $0.457028 and a debt service rate of $0.238278. City staff explained that because the proposed rate exceeded the “no new revenue” rate (0.577197), the city was required under state law to hold the public hearing and take the record votes described in the Texas Property Code. Staff also stated that the proposed rate did not exceed the voter-approval rate that would trigger an automatic election under the tax code.

City staff summarized the tax-rate mechanics and consequences: “The proposed tax rate for tax year ’25 or fiscal year 26 is 0.695306 per $100 evaluation,” and staff said “the city of Red Oak is proposing to increase property taxes for the 2025 tax year” because the proposed rate is above the no-new-revenue rate. Council voted 5–0 to adopt the rate.

Following the budget and tax-rate actions, the council considered and adopted Ordinance No. 25-042 to authorize the issuance and sale of City of Red Oak, Texas Tax Note Series 2025. Hilltop Securities, acting as the city’s financial advisor, reported that they received seven bids for the tax note and said the low bid came from Regions Bank at an interest rate of 3.49 percent. Jim Sabonis, managing director at Hilltop Securities, told the council: “We received 7 bids, and the low bid was provided by Regions Bank at an interest rate of 3.49%, which is much lower than the 5% that we originally anticipated.” Sabonis said the seven-year tax note will fund street and road improvements, safety equipment, vehicles, parks facilities and costs of issuance. The council approved the ordinance authorizing the notes 5–0; the adopted motion included a proviso that final revisions be reviewed and approved by the city manager and city attorney.

Finally, the council adopted Ordinance No. 25-041 to ratify the property tax revenue increase reflected in the newly adopted budget. City staff reported that the budget’s total property-tax revenue increase over the prior fiscal year is $3,025,925 (about 16.7%), and that $2,500,861 of that increase is attributable to new taxable value added to the roll. The council voted 5–0 to ratify the revenue increase, a separate vote required by state law after adopting a budget that raises more property-tax revenue than the prior year.

Votes at a glance: Ordinance 25-039 (FY2025–26 budget) — adopted 5–0 (Miller, Franklin, Blake, Smith, Flannery); Ordinance 25-040 (tax rate $0.695306) — adopted 5–0; Ordinance 25-042 (authorize sale of Tax Note Series 2025) — adopted 5–0; Ordinance 25-041 (ratify property-tax revenue increase) — adopted 5–0.

The council did not receive public comments during the tax-rate public hearing; city staff said no comments were submitted. After the votes the mayor pro tem thanked staff for their work and the council adjourned the special meeting.

Because the council adopted the budget and separately ratified the property-tax revenue increase as required by state law, the tax rate adopted at the meeting will be used in city calculations for levying taxes during the 2025 tax year unless further action is taken at a subsequent meeting.