Lewisville finance team lays out economic outlook, assessed‑value gains and budget calendar for FY2026

City finance and economic development staff presented an economic outlook and budget timeline to the Lewisville City Council on Monday, reviewing assessed‑value growth, development projects, bond rating notes and a recommended FY2026 budget calendar that does not require a voter election.

Director of Finance Dave Erb said the city’s taxable assessed value increased from about $11.7 billion in tax year 2020 to approximately $19.4 billion in 2024, a rise he attributed in part to the Castle Hills annexation and ongoing development. “That is a 65% increase over that 5 year period,” Erb said.

Why it matters: Erb and colleagues told council that assessed‑value growth, construction activity and sales tax trends underpin revenue projections for the upcoming budget. Staff recommended preparing the FY2026 budget without pursuing a property tax election, while keeping options open if council later chooses otherwise.

Key points from the presentation

- Assessed value and new value: Staff said new taxable value additions spiked (examples cited at $720 million and $780 million in recent years) and that single‑family residential accounted for about 46% of the total assessed value. City staff projected long‑term single‑family assessed value growth of roughly 4–6%.

- Bond ratings and borrowing: Erb summarized Standard & Poor’s and Fitch ratings from August 2024. He said revenue bonds previously rated AAA remain strong but noted Fitch reduced one general obligation rating; staff said the change reflected rating criteria updates rather than weakened city finances. Staff estimated about 4% as a planning assumption for the next bond sale’s interest cost.

- Development pipeline: Economic development staff presented a list of major projects, including Old Town multifamily, Lakeside Crossing, Crown Center and a large Wells Fargo data center. Christina Williams summarized retail, office and industrial trends via CoStar market data and said industrial vacancy remained low with heavy demand.

- Revenues and risks: Budget manager Ashley Carlisle reviewed general‑fund sales tax trends, building permit receipts and hotel occupancy. Staff said sales tax growth spiked with Castle Hills and has moderated since; FY2024 sales tax came in about $435,000 higher than the prior year. Carlisle also described federal grant reimbursements and noted some recent federal grant suspensions are being monitored but, as of the report, reimbursements were flowing for Lewisville.

- Calendar recommendation: Staff proposed the calendar that avoids a tax election, with the public hearing and votes on the budget and tax rate set in September per statutory deadlines. Staff’s recommendation: proceed without an election for FY2026 and continue monitoring revenues, inflation, interest rates and federal grants.

Council questions and next steps

Council members asked several technical questions about industrial vacancy rates, downtown projects, and hotel occupancy. Staff said they will continue one‑on‑one budget meetings with council, monitor building permits and sales tax receipts and return with final budget materials per the recommended calendar.

Ending

Staff recommended moving forward with budget preparations without an election and emphasized ongoing monitoring of sales tax, building permits and federal funding. Erb described the city as financially strong with solid reserves and continuing development activity expected to support revenues.