City finance staff told the City Council of Rose on July 30 that the draft fiscal 2025–26 budget relies on the state ‘‘de minimis’’ tax provision to raise roughly $500,000 and includes a 12.8% utility-rate increase that is the second year of a five‑year plan. The presentation also includes a 5–6% solid-waste rate increase expected to generate about $100,000 and assumptions of flat sales tax.

The proposed budget matters because it pairs rising operating and benefit costs with weakening sales-tax receipts, prompting staff to use the de minimis allowance rather than higher cuts to city services. "This was a difficult year for us," said Mr. Cruz, a city finance staff presenter, and he warned the council that a rolling 12‑month sales‑tax indicator has turned negative: "This month was the first time we've been negative in quite a few years, actually, although it's 0.19%."

City staff said the 12.8% water and sewer increase is year two of a five‑year rate plan presented last year by consultant NewGen; staff estimated that the increase would yield about $200,000 in water revenue and about $500,000 on the sewer side under the plan. The solid‑waste rate change was described as a 5–6% increase producing about $100,000. Staff noted that the sales‑tax total used in baseline revenue is gross sales, not taxable sales, to capture wider economic activity.

The budget presentation included several personnel and benefit actions. Staff proposed a 3% cost‑of‑living increase in the budget planning documents and reflected higher employer retirement contributions under TMRS (the Texas Municipal Retirement System). Medical insurance expenditures were shown in the budget as a projected total of about $1.595 million, with a placeholder increase of 16% while staff await broker responses.

Capital needs and one‑time projects discussed in the workshop included a projected $20 million program of projects tied to debt service, with about $11 million identified for wastewater‑plant work, water‑line replacements and water towers. Staff said the wastewater line replacement work could use pipe‑bursting methods and that the city is evaluating whether to proceed with current contractors or solicit others.

Council members asked staff to increase public notice about utility rate changes; one council member requested basic public communications such as a website post or bill message ahead of the October billing cycle. Staff said they would post rate information and links to help customers prepare.

Other budget details presented: certified property values rose about 5.6% year over year; the number of sales‑tax outlets counted by the controller has fallen to about 268 (the lowest since 2020 in the slides shown); and the local cost index (an MCI number staff is developing) differs from the consumer price index. Mr. Cruz said the city has narrowed a proposed local growth basket to roughly three dozen items but is still validating the data.

The council did not take final action on the tax rate or budget at the workshop. Staff scheduled procedural dates and a special meeting to finalize tax‑rate notices required by state law; staff also indicated it will return with finalized median value numbers and other clarifications used to compute projected homeowner impacts. No formal motions or votes were recorded at the workshop.

Why this matters to residents: property taxes and utility bills fund public safety, utilities and capital work the council discussed; staff showed that roughly half of the general fund supports fire and public safety functions and that employee costs and benefits consume a large share of recurring revenue. The proposed mix of de minimis tax revenue, utility rate increases and modest program reductions is the staff recommendation to maintain services while funding infrastructure and benefits in the coming year.

Looking ahead, staff said they will present finalized tax‑rate options, updated property‑value medians and the consultant NewGen's further analysis on the utilities plan at upcoming meetings so the council can consider final budget adoption and any rate ordinances.