The Rockwall City Council at a special budget work session Aug. 25 directed city staff to publish a proposed property tax rate of 25.75 cents per $100 of assessed value for the fiscal year 2026 while it continues deliberations. The vote to publish the rate passed 4-2 after an earlier, separate motion to advertise the “no new revenue” rate failed 3-3.

The vote matters because the advertised rate sets the maximum the council may adopt when it holds a public hearing and later adopts a final rate; the council scheduled a public hearing for Sept. 2 and budget adoption for Sept. 15. City staff said the proposed 25.75-cent rate would support operations, market-based pay adjustments, and allow the city to issue up to $22 million of the voter-approved 2018 street reconstruction bonds if the council chooses to move forward.

Mary, a staff member presenting the budget, told the council the city’s total assessed value is about $10.8 billion, including about $210 million of new value; the county appraisal district calculates the average single-family homestead at $472,950. Under the proposed 25.75-cent rate, the average single-family home’s city portion of the tax bill would be about $1,217 annually, a $151 increase from the current bill, Mary said. She explained the advertised rate is not an adoption but allows public notice and the hearings required under state law.

The memo presented to council projects general fund revenues of about $58.05 million, with a 3.9% overall increase from the previous budget and an assumed 6% growth in sales tax receipts tied in part to coming retail such as H‑E‑B and IKEA. Staff said the city would preserve a roughly six-and-a-half month reserve and would not spend down reserves in FY2026 under the proposed plan.

Personnel costs drove much of the discussion. Mary proposed market adjustments: a 2% adjustment for many city employees; a 2% increase for frontline police officers (police received a substantial increase last year) with a 5% across-the-board adjustment proposed for other police ranks; fire personnel are proposed for a 5% across-the-board increase because fire pay trails market. Mary said about two-thirds of employees are “topped out” and will receive only the market adjustment rather than additional merit pay.

Council members emphasized different priorities. Council member Thomas pressed staff to show scenarios at different rates (current rate, no-new-revenue rate and the advertised rate) so the council and public can see tradeoffs. Mayor Pro Tem Mueller, who moved to publish the 25.75-cent rate, said the increase would help preserve capacity to pay for roads and other capital projects voters previously approved. Council member Henson proposed, and the council considered, publishing the no-new-revenue rate (23.4687 cents) but that motion failed 3-3.

Other budget items discussed included health insurance, which staff said has seen unusually high claims (staff reported claims up about 34% in the most recent full year), and the end of the volunteer fire department program at the end of the calendar year. Staff also called out planned debt service and the option to issue up to $22 million of the 2018 street reconstruction bonds to fund several ready-to-build street projects.

Formal motions recorded in the session: a motion by Council member Henson to advertise the no-new-revenue rate (23.4687 cents) failed 3-3 (seconded by Councilwoman Jeffers). A subsequent motion by Mayor Pro Tem Mueller to advertise the proposed budget’s rate of 25.75 cents per $100 passed 4-2, with Council member Henson and Mr. McCallum voting no. The council also asked staff to return with three scenarios — the advertised rate, the current rate, and the no-new-revenue rate — for review prior to final adoption.

The council did not adopt the tax rate at the Aug. 25 meeting; the publication requirement met tonight’s procedural step that enables public notice and the required hearings later in September.