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McGregor council reviews FY2025–26 budget and approves property tax rate of 0.530016
Summary
The McGregor City Council on Aug. 4 reviewed the proposed fiscal year 2025–26 budget — including assumptions on health insurance, pay increases and utility fees — and voted to set the property tax rate at 0.530016. The council also set public hearings for the budget and tax rate later in August.
McGregor City Council members reviewed the proposed fiscal year 2025–26 budget and on Aug. 4 voted to approve a property tax rate of 0.530016, the same rate used in the current year. The council announced a public hearing on the tax rate and the proposed budget for Aug. 21, 2025, with final adoption slated for Aug. 22, 2025.
The budget presentation, led by Lee Klump, director of finance, laid out key assumptions the administration used to build the draft. Klump said the draft assumes a 25% increase in health insurance premiums "based on what we've heard meeting with the health care people — it's not set in stone," and a 5% cost-of-living adjustment across the board. The city is also budgeting a market increase of 5% for patrol officers on top of the COLA, and the Texas Municipal Retirement System contribution rate is assumed to rise from 12.96% to 13.12% in January.
The presentation included a proposed 8% increase in water and wastewater fees and noted a rising contract cost for animal services with the city of Waco; Klump said the city's share rose from about $105,000 in fiscal 2025 to roughly $180,000 in fiscal 2026. Capital outlay highlights in the general fund include replacement self-contained breathing apparatus (SCBA) for the fire department budgeted at $27,000 and two equipped police vehicles budgeted at $143,500.
Finance staff showed revenue and expenditure breakdowns across funds. Property and sales taxes were listed as the largest general‑fund revenue sources; charges for services (primarily utility fees) are the main revenue driver in the utility fund. The airport fund assumes up to $100,000 in grant revenue tied to a ramp grant the city is monitoring. The cemetery fund and other special funds were presented as largely unchanged from the prior year.
Council members and staff discussed three tax-rate calculations provided by the tax office: the "no-new-revenue" rate (0.530892), the voter‑approval rate as computed for this year (0.531392), and the de minimis rate (0.581414). City Manager (unnamed) told council the discussion should begin with the voter‑approval framework but later the council moved to approve the current rate of 0.530016. The manager said he would recommend the 3.5% voter‑approval mechanism as a starting point for future consideration.
During the presentation staff noted some timing effects in debt service collection that produced an apparent shortfall for the current year but that the debt service fund balance will cover the timing difference in FY 2026. Staff also said the industrial park fund will use existing fund balance for some near‑term obligations and that land sales could bolster that fund in the near future.
Action: A motion and second to approve a property tax rate of 0.530016 passed on a voice vote; individual roll-call votes were not recorded in the meeting transcript. The council proceeded to schedule the required public hearings for August as stated.
No ordinance or budget adoption occurred at the Aug. 4 meeting; the council set the rate and the public‑hearing schedule required by state law. Additional budget details — including department budgets, contracted services line‑items, and the final insurance quotes — remain subject to revision before final adoption.
Ending: Staff asked council members to review the budget packet and direct questions first to Lee Klump before the next scheduled budget meetings. The council will revisit the budget and consider final adoption at the Aug. 22, 2025 meeting.
