Grayson County discusses advertising 4¢ levy increase, water-rate changes and school grant application during budget work session

Grayson County officials in a budget work session debated advertising a 4-cent property tax increase, proposed changes to water rates and whether to pursue a state Department of Education grant for classroom space at Independence Elementary.

County finance staff told the board the county faces an operating shortfall — about $145,000 in the operating fund — and recommended advertising a 4¢ levy increase for fiscal year 2026, which staff estimated would raise roughly $760,000. The same presentation proposed targeted water-rate changes to reduce the county’s subsidy of water operations and to fund capital needs.

The work session also included a presentation about a Department of Education grant application to add classroom space at Independence Elementary. The presenter said the project scope was reduced from 7,200 square feet to 5,482 square feet and that contractors quoted roughly $380 per square foot; the presenter priced the project at $400 per square foot, producing an estimated total construction cost of $2,192,800. Using a standard fee assumption of 6.5 percent, the presenter calculated a project total of $2,335,332 and said a 20 percent DOE grant, if awarded, would be worth about $467,000.66. The presenter cautioned that applying for the grant does not guarantee an award and said the county could withdraw if it could not secure required local financing or if bid prices came in substantially higher.

“ I do like free money,” the presenter said when describing the value of a potential 20 percent grant.

Finance staff reviewed water-system finances and recommended several rate adjustments. Staff said a prior 35 percent rate increase left the water operating fund still requiring a $145,000 subsidy from the general fund in the FY2026 estimate. Staff recommended aligning pass-through payments and adjusting rates for specific systems (including Fairview Old Town) to better reflect the county’s costs and the rates the county pays for wholesale water. Staff also noted a $250,000 grant and matching expense related to a required line inventory that is included in the FY2026 estimate.

Board members and staff discussed a sequence of funding uncertainties affecting planned water and school capital work, including FEMA reviews that have delayed disbursement of previously approved funding and changes in prior funding strategies (one attendee said earlier plans to pursue a different grant approach had been changed). Several members pressed for more detail on the status of FEMA funding, grant timelines, and the cost increases on water-filter and stormwater projects. One board member urged improved grant-seeking capacity by the county to pursue available funds.

During the session the board also considered discretionary reductions and options to reduce budget pressure, including eliminating county positions and reducing some outside payments. Staff outlined that removing three county positions would save about $300,000 and removing two county-funded positions in the sheriff’s office would save about $180,000, but noted those steps would still leave a significant budget gap.

A motion was made and seconded to advertise the recommended water-rate changes and to advertise a 4¢ levy increase; the motion was discussed further in the meeting excerpt but a final roll-call vote tally does not appear in the provided transcript segment.

The county’s next advertised public hearing on the FY2026 budget was stated in the meeting as May 8, 2025, followed by subsequent work sessions and final votes on school and county budgets in June, per the timeline staff presented.

The board asked staff to return with more detailed cost estimates and grant-status updates before finalizing levy and project decisions.