Council holds hearings on proposed FY2025‑26 budget and tax rate; delays final adoption until Aug. 22

The McGregor City Council held public hearings Aug. 21, 2025, on a proposed fiscal year 2025‑26 budget and the proposed tax rate. The council did not adopt the budget or tax rate at the meeting and scheduled final adoption for a special called meeting on Aug. 22, 2025.

Lee, city finance staff, presented the budget and the three tax‑rate options provided by the McLennan County tax office. The city’s current adopted rate for fiscal year 2025 is 0.530016 per $100 valuation. For the proposed budget staff used the voter‑approval tax rate, 0.531392; Lee said the no‑new‑revenue rate is 0.530892 and the de minimis rate (which would allow an additional $500,000 in ad valorem collections) is higher. Using the voter‑approval rate, Lee said the maintenance-and‑operations portion of taxes on a $100,000 home would increase by about $11.49 while total tax change including interest and sinking would amount to $1.38 per $100,000 in assessed value as shown in staff slides.

Key assumptions and budget highlights presented by Lee included a 25% budgeted increase in group health insurance (staff said negotiations with the broker and carrier were ongoing and actual rates might change), a 5% cost‑of‑living adjustment (COLA) for staff, and a TMRS employer contribution increase from 12.96% to 13.12% effective Jan. 1. The budget also includes an 8% increase in water and wastewater rates to offset wholesale cost increases, and ongoing funding for the city’s tornado siren program (now in its fourth year).

Staff included capital outlay in the general fund for two fully equipped police vehicles ($143,500 total) and SCBA breathing apparatus for the fire department ($27,000). Animal shelter contractual expenses were budgeted at $180,000 annually, up from a historical figure Lee said had been about $105,000. For the utility fund Lee said revenues and expenditures were budgeted at roughly $6.7 million and that most requested utility capital items were included, totaling about $811,000 in capital fit into the utility program for the year.

Lee outlined contracted services across funds, noting approximately $1.6 million for “bluebonnet water fees” in the utility fund, $740,000 for garbage services (Progressive Waste Solutions/Waste Connections), $385,000 for electricity, $335,000 for Walker Partners engineering, $299,000 for a payment to the Waco Industrial Foundation, and a contractual payment of $150,000 to SpaceX under an existing agreement. He also noted TML insurance and legal fees among the larger recurring contracted expenses.

On airport funding, Lee said staff budgeted a 90/10 TxDOT routine airport maintenance grant: the city plans $111,111 in local spending to draw a maximum $100,000 in grant funds. Lee said cash and pooled investments were lower than the previous year as capital projects were being spent; cash and investments on hand at June 30, 2025, were $28,367,955 and fiscal‑year‑to‑date interest earnings were $700,428.

During council Q&A, members asked for additional breakdowns of how personnel costs and COLA adjustments were allocated across funds. Lee described historical and current splits for positions whose time is charged to multiple funds — for example, the assistant city manager’s time split 50/50 between the general fund and utility fund, and other administrative positions split to reflect workloads across funds. Council asked for a numerical breakdown and Lee said he would provide a detailed allocation.

The council opened and closed the required public hearings on the tax rate and proposed budget with no public speakers and then took a procedural vote. A motion to “take no action” on the budget (so that the council could adopt final budget and tax rates at the scheduled Aug. 22 special meeting) passed by voice vote. No final tax‑rate adoption or budget adoption occurred at the Aug. 21 meeting.