SLDC reviews proposed FY2026 budget; board hears debt, transfers and reserves plan

The Sugar Land Development Corporation held a budget workshop July 1 to review proposed fiscal year 2026 revenues and expenditures, projected debt service obligations and planned capital projects; no final budget action was taken at the workshop.

The review matters because staff presented a multi‑year funding plan that reallocates revenue to higher debt service and specific capital projects while retaining policy minimum fund balances. Justin Maybellado, Assistant Director of Budget, told the board revenue for FY2026 is projected at $9,600,000 in sales tax, with a combined estimated $1,300,000 in additional revenue for the current fiscal year when stronger sales tax performance and investment income are tallied.

Key FY2026 highlights presented by staff included a proposed program/operating budget of $1,200,000; $4,100,000 budgeted for incentives (which includes year two of a previously approved Plug and Play agreement estimated at $1,500,000); a $1,000,000 reserve for opportunities; and $2,300,000 in scheduled capital improvement projects (CIP) including $300,000 for major roadway landscape improvements and $2,000,000 for major street rehabilitation. Maybellado said the sales tax forecast uses regional CPI growth of 3.71% for projections and that the beginning available fund balance is approximately $24,600,000.

Staff also discussed changes in transfers: the proposed FY2026 budget includes a transfer to the city general fund of $1,620,000 to reimburse salaries, benefits and cost allocation; and a transfer to the city’s debt service fund of $3,200,000, which staff said reflects SLDC’s share of recent certificate of obligation debt issued to purchase the Imperial property and ongoing debt obligations tied to the Smart Financial Center. Maybellado explained the higher debt service reduces the reserve available for opportunity funding in the near term but said the board can amend the budget if sales tax performance exceeds forecasts.

Board members asked for additional detail on outstanding debt, interest rates and the timing and sources of revenues used to repay certificates of obligation. Maybellado said he would provide a detailed debt schedule after the meeting. He outlined the near‑term calendar: the SLDC budget will be filed with the city council package on July 15, the board will review FY2025 projections and proposed amendments on Aug. 5, the full city budget workshops will be held in August with SLDC program review on Aug. 28, and final city budget adoption is scheduled for Sept. 15.

The workshop included discussion of implementation and monitoring practices: staff noted the budget assumes certain committed incentives remain payable and that any new incentives will be presented to the board in future budget amendments. No formal vote was taken on the FY2026 proposal at this meeting; staff will return with updates and supporting schedules for formal action later in the summer.