Smithville staff say revenues are stronger than expected; 2026 budget to include bond-funded utility projects

Smithville staff told the board during a work session that revenues through mid-August are outpacing earlier conservative projections and that a combination of stronger sales/use tax, permit activity and interest income has narrowed the city’s projected fiscal gap for the current year.

Rick, finance staff member, said the city’s year-to-date projected revenues were “just under $7,300,000” at the nine-month mark and that sales tax receipts as of Aug. 15 were about $1,440,000 while use tax was approximately $900,000. He told the board the 2025 adopted budget had assumed roughly an $810,000 deficit but that, based on current trends, staff now expects that shortfall to shrink to about $153,000 by year end.

The update matters because it frames a proposed 2026 budget that staff presented to the board. The draft for next year shows roughly $22 million in total proposed revenues and $33 million in proposed expenditures, driven largely by major water and wastewater capital projects that staff plan to fund in part through certificates of participation (COPs) and other bond issuances.

City staff stressed that the city’s budget approach remains conservative on both revenues and expenditures. The finance presentation highlighted several revenue drivers this year: sales tax growth tied to commercial development, use tax gains from online and large retail activity, an uptick in permit receipts driven by larger commercial projects, and higher-than-expected interest income. The presenter said those factors have repeatedly offset conservative estimates in past years and have helped…