Pearland council reviews FY 2026 proposed budget; staff recommends 63¢ tax rate and 5.5% water increase

Pearland City Council held a special meeting Aug. 11 to review the city manager’s proposed fiscal year 2026 budget, staff’s recommended property tax approach and two water/sewer rate scenarios.

City staff presented a balanced general fund budget they said meets the city’s 25% fund policy and showed a proposed property tax rate of roughly 63 cents per $100 of taxable value while recommending that the council set a maximum rate of 63.5 cents to preserve flexibility. Staff also recommended a 5.5% water and sewer rate increase for FY 2026 (staff provided an alternative 7.5% scenario for comparison).

The budget matters because it sets the city’s operating resources and fees for the coming year, and it allocates money for long‑deferred maintenance needs including streets, sidewalk repairs, and replacement of large equipment. City staff framed the proposal around council strategic priorities and said it preserves service levels while funding targeted supplementals.

Staff presentation and key numbers

Trent Epperson and Finance and Budget staff walked the council through the budget development process and key assumptions. Rachel Winslow, Head of Office of Management and Budget, summarized the document and said the 400‑page budget is a policy, financial plan and operations guide. Winslow told the council the proposed general fund is balanced, meets the 25% (90‑day) fund policy and that staff projects the ending fund balance will remain above the policy minimum.

Major revenue and expense assumptions highlighted by staff included: - Property tax: staff built the budget using a proposed tax structure that staff described as approximately 63 cents; staff asked council to set a maximum tax rate of 63.5 cents, a half‑cent above the proposed rate, to preserve capacity during adoption. Staff also presented the tax rate worksheet and the city’s certified taxable values supplied by appraisal districts. - Sales tax and permits: sales…