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Tomball staff present FY2026 budget showing effectively flat tax rate after EDC aid
Summary
City staff told the Tomball City Council in a July budget workshop that general fund revenues are stronger than projected and that the proposed fiscal 2026 budget holds the city's tax rate essentially flat, helped by an Economic Development Corporation (EDC) contribution and planned debt issuance to fund capital projects.
Lede: At a Tomball City Council budget workshop, city staff presented the proposed fiscal year 2025-26 budget and said the adopted tax rate would be essentially unchanged from the current year when the EDC contribution and debt plan are included.
Nut graf: The presentation showed fiscal 2025 revenues running ahead of estimates and projected reserves well above policy levels. Staff said the combination of a conservative revenue forecast, an additional $1.5 million EDC contribution in the current cycle plus a proposed $500,000 follow-up contribution, and staggered debt issuances will allow the city to fund major capital projects while mitigating upward pressure on the tax rate.
Body: David, a staff member presenting the budget, said the city's fiscal 2025 revenues "are coming in about almost $2,000,000" above budget and that the general fund is projected to end the year near 78% of reserves, well above the council's 25% policy. He told councilors the staff issued $30,000,000 in debt this year and is planning additional issuances of $30,000,000 in fiscal 2026 and another $30,000,000 in 2027 to fund the capital improvement program.
On slide summary figures, the FY2025 actual tax rate was shown as 0.336365 and the proposed FY2026 rate as 0.334356; David summarized that as: "so, basically, I would look at it as we're maintaining the tax rate flat." He added that those calculations assumed a 6% growth in the tax base in the coming year and an assumed interest rate of 4.5%. The presentation also included a planned EDC contribution to debt service, described as a $1.5 million first-year amount and an additional $500,000 contribution that staff has discussed with EDC staff and expects the EDC board to consider.
Council members asked how the EDC contribution was reflected in the calculation; David confirmed the TDC/TEDC requests on the slide were included in the proposed budget and tax-rate calculation. Staff also pointed out that because bond payments often begin part way through a fiscal year, new issuances can produce only partial-year debt service in the first year.
Ending: Staff said certified values on July 25 will prompt a recalculation, and council scheduled a follow-up workshop on Wednesday to complete questions. No council vote was taken at the workshop; staff presented the proposal for council direction and later formal hearings and adoption in August.
