Wichita Falls begins 2025–26 budget process, signals focus on employee pay and modest utility rate adjustments

City management used a June 17 pre‑budget workshop to lay out revenue forecasts, capital needs and a multi‑year approach to employee compensation for the 2025–26 fiscal year.

City Manager Jeff Jenkins and finance staff framed the session as an early step in a long budget cycle aimed at balancing capital investment, workforce compensation and service levels. “We want a budget that works well for the people and you are their voice in that,” finance staffer Steven told council at the start of his overview.

Staff said preliminary property valuations from the appraisal district are expected to rise about 2.76% for the tax year; certified values are due July 23 and will determine final tax revenue estimates. Steven told council the “current tax rate is 0.6848 per $100 evaluation” in their working materials and that state statutory calculations (including voter‑approval tax‑rate thresholds) will constrain the council’s options when it comes to adjusting rates.

Sales tax revenue has flattened in the most recent months, staff said, and interest‑rate expectations remain uncertain as the Federal Reserve determines policy; both affect projected revenues. Management highlighted the approaching expiration of one reinvestment zone (commonly called TIF 2), which has been diverting incremental local property taxes to a redevelopment fund; staff noted that expiration would return roughly $474,000 annually back to the city if the zone is not extended.

Workforce compensation emerged as a central budget issue. Staff emphasized the importance of competing for and retaining skilled employees and reported that the public‑sector employment cost index is currently about 4.4%, a benchmark staff said should inform base pay increases. Steven recommended a new comprehensive compensation study (estimated cost about $100,000) to identify pay compression and target gaps. The city’s last comprehensive compensation update was completed in 2020 and not all prior recommendations were implemented, staff said. Jenkins and staff said they will seek ways to both “keep up” with market movement and “catch up” on previously unaddressed pay gaps.

Staff presented a three‑part operational strategy to address budget pressures: (1) seek quick operational efficiencies (low‑cost, immediate savings); (2) review procurement and contracts for better pricing or in‑house options; and (3) pursue longer‑term revenue or capital investments that reduce costs (examples included landfill gas capture to produce revenue). Management set a working target of identifying about 4% in operational savings citywide and reported preliminary items equaling roughly 1% already identified for the coming budget.

On utilities, staff recommended modest rate increases to maintain system health and keep pace with costs. A retail water and sewer rate study was recommended; staff noted that when measured as a combined typical monthly bill (water, sewer and sanitation components) Wichita Falls sits below the peer average and recommended a modest 2% increase for water/sewer to follow inflationary trends rather than large multi‑year “lurches.” Sanitation rates were noted to be below peer averages as well, in part because Wichita Falls provides twice‑weekly curb service that many peers do not. Staff asked council to consider modest adjustments to both sanitation and stormwater fees to cover increasing costs and capital needs.

Capital priorities cited included ongoing street repairs, water‑supply work (Ringgold lake project funding already set aside), lift‑station rehabilitation, airport facility needs and performance‑hall renovation contingencies. Staff noted debt currently maturing in coming years and the opportunity to redeploy freed debt capacity for capital work.

Key process dates: staff plans to transmit a detailed budget document to council on July 28, schedule one‑on‑one briefings for council members in early August, hold a more detailed budget workshop on Aug. 12, hold the public tax‑rate hearing on Aug. 19, and bring the final budget to council for adoption on Sept. 2, with the new fiscal year beginning Oct. 1.

Council members asked for follow‑up detail on average monthly utility bills and confirmation of meter and base charges so proposed percentage increases can be expressed in dollar terms for residents. Staff committed to provide practical dollar examples when it returns with the detailed budget.

The workshop closed with broad direction to staff to pursue a combination of compensation planning, targeted operational savings and careful use of reserves and one‑time funds to smooth transitions while maintaining service levels. Staff said they will convene a fiscal sustainability group to continually review opportunities and report back to council during the budget cycle.