Waxahachie council adopts FY2026 budget, keeps property tax rate at 61¢ and authorizes debt defeasance

The Waxahachie City Council on Monday adopted the fiscal year 2026 budget, held the property tax rate at 61 cents per $100 of valuation and approved a resolution authorizing defeasance of certain bond series to reduce future interest costs.

Chad Tusteson, the city finance director, told the council the proposed budget —maintains the rate of 61cent—— and provides funding for operating costs and capital needs as the city grows.— He said the vote on the tax rate was being held the same day as the public hearing and that no additional action was required after the hearing.

The council adopted the budget and the tax ordinance by voice vote after council members praised staff for work on the document. Councilman Smith moved to approve the revised fiscal year 2025 figures and to adopt the fiscal year 2026 budget; the motion carried. Later the council approved an ordinance establishing the 61-cent rate with an operations and maintenance component and a debt service component and conducted a recorded vote for that ordinance.

The council also moved to ratify the property tax revenue increase reflected in the FY2026 budget, a statutory requirement under Texas law when a proposed budget would collect more property tax revenue than the prior year.

On debt management, Tusteson and staff presented a resolution to defease and redeem portions of the city—s outstanding obligations. The resolution authorizes use of up to $6 million in debt capacity to defease 2014 bonds and a portion of 2016 bonds; staff said the transaction is expected to produce about $1.9 million in interest-cost savings. Tusteson noted the city previously defeased 2011 and 2013 bonds and saved about $1.1 million in interest costs.

Why it matters: The council—s budget actions lock in service funding and capital spending plans beginning Oct. 1, 2025, while the defeasance reduces long-term interest expense and may increase future bonding capacity.

Discussion and details: Council members highlighted that the budget includes a step pay/merit program for employees and an increase in the homestead exemption; staff estimated the average homeowner would see roughly $60$70 in annual property tax savings from the increased homestead exemption referenced in the meeting. Tusteson said the budget reflects stakeholder meetings, council work sessions and public hearings.

Formal actions: The council approved the FY2026 budget and related revised FY2025 figures, adopted the tax-rate ordinance maintaining 61 cents per $100 valuation, ratified the property-tax revenue increase, and approved a resolution authorizing defeasance and redemption of specified obligations. All motions as presented carried.

What—s next: The new fiscal year begins Oct. 1, 2025; the city will proceed with planned capital purchases and implement the adopted pay and exemption changes per the adopted budget.

(Reporting note: quotes and votes are taken from council meeting transcript.)