Town finance staff briefed the Addison City Council on Sept. 2 on the town's FY2025 third-quarter financial results and presented the proposed FY2026 budget and tax-rate preview during two public hearings.

Steve Litton and Stephen Glickman, finance staff, said the third-quarter report covered Oct. 1, 2024, through June 30, 2025. Litton noted the town is 75% through its fiscal year and that hotel-occupancy-tax receipts are running a bit below expectations for the year-to-date period while other revenue sources were generally in line. "We anticipated that getting kicked off a little bit earlier, in this fiscal year," Litton said of a timing issue affecting hotel tax receipts.

Key finance figures presented to council included total general fund revenue projected at $52,347,000 and operating expenditures at the same figure, leaving a projected fund balance near $21,000,000 or roughly 40.2% of operating expenditures. Staff said the third-quarter permit total was nearly 1,000 permits with a permit valuation around $65,000,000 year-to-date. Sales tax receipts were up about 4% from the comparable quarter last year, and revenue per available hotel room was about $75'$76 with occupancy near 66'70% depending on the month.

Glickman reviewed the proposed FY2026 budget and property tax-rate mechanics. The proposed total tax rate in the budget is $0.6081 per $100 of assessed value. Staff explained that the town's calculated no-new-revenue rate is $0.6094 and the voter-approval rate is $0.653647; the proposed $0.6081 rate is slightly below the no-new-revenue threshold presented. Glickman described the composition of the rate and said council previously directed a $0.025 allocation for the economic-development fund; he noted that public safety constitutes more than half of the general fund budget and that personnel costs are about 65% of the general fund.

Enterprise fund items presented: the airport fund has projected operating revenue of just over $8 million and capital projects largely funded by grants; the utility fund projects operating revenue and expenses close to $17.8 million with no proposed water-rate increase and a proposed 1% sewer-rate increase to absorb higher wholesale sewer costs; the stormwater fund has no rate change proposed and reserves above policy targets. Staff also described planned one-time decision packages across funds and a multi-year capital-improvement plan totaling an aggressive $165 million over five years, with $35 million proposed for FY2026.

Council members asked detailed follow-ups. Councilmember Rick Christie asked about the fund-balance trajectory after the reported third-quarter drawdown; staff replied the fund balance will decline in the fourth quarter as property-tax receipts are spent and that an end-of-year balance in the low-$20 million range remains consistent with the proposed budget. Council members asked tourism and hotel staff to investigate the decline in hotel-tax receipts and to follow up with hotels; staff noted late payments from at least one hotel account had affected quarter-to-date figures and said tourism staff would pursue additional intelligence.

Council also discussed capital needs at Addison Circle District. Staff described a proposed $300,000 professional-services budget to survey, assess and design phased repairs for paver and tree-well issues across the Circle District, including mapping ownership lines, surveying utilities and producing phased construction estimates. Becky (public works) and other staff explained the goal is to produce a condition-and-cost assessment that would inform possible phased construction so the town avoids piecemeal fixes that could fail again. Council discussed seeking cost-sharing with the district property owner/manager (referred to in the briefing as MAA) once the town has a concrete scope and cost estimate.

Leslie from Development Services briefed council on the rental-registration and inspection program for lodging properties; staff reported most lodging establishments had registered and that inspections were nearly complete, with a summary of common violations and a report back expected in December'January.

Public comment included a statement from resident Joe Pedroza praising the council's decision packages for first-responder pay. "Police and fire are the absolute number 1 priority," Pedroza said, and he urged continued investment in facilities for public safety.

Next steps: the council held the first public hearings on the FY2026 budget and tax rate and scheduled a second hearing and vote at the council's next regular meeting; staff committed to follow-up briefings on hotel-tax variances, the rental-registration inspection summary and the Addison Circle District assessment scope and fee proposals.