City Manager David Hall presented the proposed Fiscal Year 2026 budget to the City Council on Monday, Aug. 11, outlining roughly $70 million in general-fund expenditures, projected revenues just under $71 million and a proposed beginning general-fund reserve of $34 million. After the presentation, the council voted unanimously to publish a voter-approval maximum tax rate of 0.841997 per $100 of taxable value and set a public hearing on the budget and tax rate for Sept. 16, with a separate meeting planned Sept. 17 to consider adoption.

The budget proposal "is developed across many, many months with many, many meetings," City Manager David Hall said, describing input from finance staff and department directors. Hall emphasized that the proposed levy stays below the rate approved by voters for debt service, and he highlighted that general-fund beginning reserves have grown from lower levels in prior years to the $34 million figure proposed for FY2026.

Why it matters: the council’s decision to publish the voter-approval tax-rate ceiling preserves flexibility but does not set the final rate. Finance staff described the proposed tax structure as two parts: an operations-and-maintenance component and a debt-service component tied to voter-approved bond debt. Wendy Badgett, who presented the tax-rate resolution to council, said, "Council is not adopting the actual tax rate tonight. I want to make that clear." The published rate serves as a legal ceiling the council may lower but not exceed when it adopts the final rate.

Key budget figures and drivers
- General fund: proposed beginning reserves $34,000,000; projected revenues just under $71,000,000; proposed expenditures just over $70,000,000; a modest projected net increase to fund balance of about $335,000, of which $300,000 is noted as one-time. Hall said the city has increased reserves substantially over the last two-plus years.
- Capital: staff proposed carrying forward $81,000,000 in capital project funding into FY2026 (up from $71,000,000 carried forward previously) and reported a five-year capital program totaling about $332,000,000, including a large municipal-complex line of roughly $101,000,000 in the upcoming year.
- Utilities: the utility fund shows beginning reserves of about $16,600,000 and expected ending reserves of about $17,200,000. Staff said supplier rate increases (a district water rate increase cited near 7% and a 10% wastewater increase from the City of Garland) were partially passed through to customers; staff estimated a household using 7,500 gallons would see an increase of about $11.51.
- Refuse/drainage: refuse-provider Republic has increased contract rates (contract adjustments and CPI), and staff proposed residential refuse rates increasing about 10% and commercial rates about 11%. The drainage fund rate remains unchanged at $5.50 per equivalent residential unit per month.
- Personnel and benefits: the proposal includes seven new full-time positions; Hall noted prior additions and that several new positions in public safety were included. The employee-benefits fund reflects actuarial/market pressures (a cited 10% stop-loss premium increase, 6% rise in medical claims and 5% administrative increase) and modest increases to employee premiums (1%).

Council questions and staff follow-up
Council members pressed staff for more detail in several areas. One council member flagged an approximately $500,000 increase in the general-fund vehicle-maintenance line (from about $644,000 in the revised FY2025 budget to about $1,137,000 proposed for FY2026) and asked whether the rise reflected headcount, equipment replacement, or changed maintenance practices. Hall said part of the increase reflects a drive to improve vehicle maintenance and rising costs and that staff would provide a more detailed answer at an Aug. 18 work session.

Council members also questioned long-unspent bond-authorized dollars from prior bond issues and asked staff to identify whether older projects should be re-scoped, advanced or abandoned. Hall said some projects remain in planning and right-of-way acquisition phases and that staff expects to return with recommendations.

Formal actions
- Consent minutes: The council approved minutes from the July 15 work session and July 15 regular meeting on a motion by Mr. Bridal, seconded by Mr. Reeves; the vote carried unanimously.
- Tax-rate resolution and hearing: The council voted unanimously (7-0) to approve a resolution calling a public hearing on the FY2026 proposed budget and tax rate for Sept. 16 and to publish a maximum (voter-approval) tax rate of 0.841997 (0.572947 operations and 0.26905 debt service). The vote does not adopt a final tax rate; staff emphasized adoption may be lower and is scheduled for a special meeting Sept. 17.

What remains open
Staff will return with additional detail on large line-item changes (vehicle maintenance, certain capital project timelines and unspent bond proceeds) at upcoming work sessions. The council also asked finance staff to confirm assumptions about certified property values and potential adjustments stemming from appraisal appeals and other valuation changes.

The council adjourned at 7:31 p.m.