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Belton staff previews lean FY2026 budget; possible tax‑rate uplift eyed to maintain reserves
Summary
City finance staff presented a conservative FY2026 draft that holds new positions out of the general fund, limits pay increases and projects a small use of reserves unless the council adopts a higher tax rate; staff warned the certified tax roll in late July will determine final rates.
City finance staff presented a preliminary budget preview for fiscal year 2026 that keeps a tight spending posture, holds new general‑fund positions out of the baseline budget and limits merit increases while warning the council it may need a tax‑rate adjustment to maintain the city’s 30% reserve policy.
Finance staff said the city began fiscal 2025 with about $8.94 million in unassigned general‑fund reserves and expects to end the year with roughly $8.46 million (about 34% of budgeted expenditures). The draft FY2026 numbers shown to the council project revenues of roughly $25.43 million and expenditures near $25.53 million; under those assumptions the city would still finish FY2026 above the 30% reserve policy at an estimated $8.30 million (about 32.7%).
Presenting the plan, Mike (city finance staff) described the proposal as “a very lean budget for fiscal 2026” and said it currently includes no new general‑fund positions and a capped merit pool of about 3% (less than a full‑merit cycle). He told council members the city’s policy objective is to maintain at least 30% of fund balance to protect bond ratings and cash flow.
Staff ran illustrative tax‑rate calculations from the appraisal district’s preliminary certified valuation: the no‑new‑revenue tax‑rate estimate shown in the presentation was $51.25, the voter‑approval rate was $54.22 and the so‑called de minimis rate was $54.33. Staff emphasized those are preliminary figures and that the certified roll, due in late July, will produce final numbers. Mike said every penny of tax‑rate change in Belton yields roughly $210,000 to the general fund.
Council members pressed staff on assumptions used for sales tax growth, collection rates and capital transfers. Finance staff noted one‑time audit adjustments and large deliveries can produce spikes in sales tax receipts; staff’s working projection for sales tax in FY2026 ranged roughly from a conservative 1.6% to a more optimistic 4% depending on how one treats one‑time receipts. Staff also identified a list of supplemental budget requests — about $548,000 in items including position reclassifications, a potential human‑resources generalist and fire department reclassifications — that are not included in the baseline numbers presented.
Staff outlined the timeline ahead: the appraisal district’s certified roll is expected the week of July 25; staff will return with a proposed tax rate and a formal proposed budget in July. If the council decides to maintain the current tax rate, staff said it would need to identify corresponding expenditure reductions to balance the budget. Council members asked for follow‑up information on overtime trends, the compensation study results (expected in June), and department‑level breakdowns of supplemental requests.
No budget votes were taken; staff will return in subsequent meetings with the water and sewer funds, internal service funds, the capital improvements plan and a proposed tax rate after the certified roll is available.