The City Manager and budget staff presented the City of College Station’s FY 2026 proposed budget on July 27, 2025, describing a $474,225,698 plan that staff said represents a 51.74% decrease in capital appropriations and a net budget decrease of 12.42% from the prior year. Mary Ellen, speaking for the City Manager’s Office during the council’s special meeting, said the document is intended to be sustainable over a five‑year horizon and to reflect changes from the state, federal government and Texas A&M University.

The proposed budget reflects preliminary taxable values from the Brazos Central Appraisal District. Staff reported net taxable value up 15% year over year, with about 3% new value added inside city limits; average single‑family taxable value rose about 4.5%, multifamily valuations rose about 31% and commercial valuations rose about 22%. Those valuation changes, combined with the tax rate the council sets, determine expected ad valorem revenues.

“The Proposed Budget … is $474,225,698,” Mary Ellen said during the presentation. Staff also provided an estimated proposed tax rate of 48.743 cents per $100 of assessed valuation as the starting point for council discussion and noted that the estimate includes decreases in both the operations and maintenance portion and the debt service portion of the rate.

Why it matters: the general fund pays core services — primarily police and fire — and staff told the council ad valorem taxes make up roughly 25% of general‑fund revenue and sales tax about another 25%. The presentation emphasized the council’s discretion over the tax rate and the timing of legal deadlines if the council wishes to exceed voter‑approval thresholds.

Key revenue and fee items
- Sales tax: staff said sales tax’s purchasing power has risen modestly; FY 2025 year‑end estimates showed a 0.67% year‑over‑year increase (driven in part by one‑time audit payments and a large football weekend). For FY 2026 the budget assumes a 1% increase over FY 2025 year‑end estimates (about $417,000), with staff cautioning that large single events can materially affect year‑to‑year comparisons.
- Hotel occupancy tax: staff presented a FY 2025 year‑to‑date increase of about 5.6% and proposed budgeting only a modest additional increase for FY 2026, citing uncertainty about major event timing.
- Fees and utilities: no general electric, water or wastewater rate increases are included for FY 2026, though staff said water and wastewater may require future increases to support planned wells and treatment improvements. The budget ties several planning and public‑works fees to the CPI‑U; a consultant recommendation to index solid‑waste fees would increase solid‑waste fees by about 5% plus additional fee adjustments that together would raise an average single‑family monthly utility bill by about $2.97 under the proposal.

Personnel and hiring
Staff described personnel as the largest general‑fund expense and proposed a pay plan similar to FY 2025: a 3% across‑the‑board pay‑scale increase, a 1% market adjustment for non‑step employees, a 3% public‑safety scale increase plus step increases where eligible, and targeted merit funding. Healthcare premiums were budgeted flat for a sixth consecutive year.

On headcount, council materials showed FY 2025 approved positions at 1,071.5; budget amendments during FY 2025 added 16 positions (including two mental‑health peace officers funded by a CIT grant and 12 firefighters funded by a SAFER grant). The FY 2026 proposal begins with two fewer positions than the amended FY 2025 total and adds 23 positions, primarily in public safety: 12 additional firefighters to staff Fire Station No. 7, six additional police positions (1 patrol lieutenant and 5 officers) with equipment and vehicles, and six more police officers identified in an “over‑hire” process staff proposes to formalize in policy. Staff described the over‑hire approach as a way to use normal vacancy churn (budgeted at 3%) to allow hiring windows without immediate supplemental appropriations, and said the six over‑hire police positions are likely to show as active in late FY 2026 or FY 2027 depending on academy schedules.

Capital and debt
Staff said the apparent 51.74% decline in capital spending reflects timing: prior appropriations remain in place for many ongoing projects, so fewer new appropriations are requested this year. Major ongoing projects cited included Fire Station No. 7 completion, Rock Prairie Road rehabilitation, Capstone realignment and the Public Works Operations Center (design funded; construction appropriations not yet requested). Staff said they plan to request approximately $91.9 million in debt issuance in FY 2026, about $70 million of which staff attributed to utilities and roughly $50 million tied to water projects in the five‑year forecast. For FY 2026 the electric fund is expected to use one‑time cash for capital in place of debt where possible.

Fund balance and reserves
Staff projected an FY 2026 general‑fund balance of about $92.3 million, with $25.8 million required under the city reserve policy (20% of expenditures), an amount set aside for bond‑rating support and council requests, and a $5 million contingency labelled for federal uncertainty related to grant funding processes.

Discussion and next steps
Councilmembers asked staff to clarify frozen valuations, the sales‑tax credit applied to voter‑approval calculations, how appraisal litigation affects valuation, and how multifamily and commercial revaluations compare with historical trends. Staff said many commercial and multifamily values were “catching up” after earlier years of suppressed valuations and expected those increases to moderate in future years if the appraisal district’s adjustments are complete.

The presentation produced no vote to adopt the budget on July 27; instead staff scheduled a public hearing and additional workshops for council review. The council later voted separately to call a public hearing on the FY 2026 proposed budget (see separate article for that action). The City Manager and staff indicated detailed line‑item follow‑up and a workshop with outside‑agency presentations are scheduled before any final action.

Ending
Mary Ellen closed the presentation by reminding council members of the required five‑year look and the city‑charter duty to present a balanced budget. Council members said they expected a substantial workshop discussion on Aug. 16 and invited additional questioning and supplemental materials in advance of that meeting.