Corpus Christi council adopts balanced budget, sets tax rate and approves utility rate increases

Corpus Christi City Council adopted the city’s fiscal 2025–26 operating and capital budgets, set a property tax rate and approved planned increases to city water and wastewater rates at its Sept. 9 meeting. After extended discussion on affordability, bond ratings and operating needs the council approved the second-reading budget ordinances and a tax rate of 0.599774 per $100 of assessed value. The council also approved staff-recommended increases for water and wastewater rates to meet debt obligations and fund infrastructure work.

Council members and staff described the budget as balanced and noted the fiscal year begins Oct. 1. City finance staff said the adopted budget reflects changes from prior meetings, including removing a proposed stormwater rate increase and trimming capital investment related to the Inner Harbor project. The council approved the capital budget on second reading after an amendment removing the Inner Harbor project from the five‑year CIP.

The council voted to set a tax rate of 0.599774 per $100 valuation, a rate staff said is about 0.23% above the “no-new-revenue” rate but well below the voter-approval threshold. Finance staff said the adopted rate is estimated to bring roughly $6.06 million in additional property‑tax revenue over the prior year; they said about $3.7 million of that would be available for general fund operations and $2.4 million for debt service.

Council debate focused heavily on proposed increases to utility rates. Staff presented rate options for the water utility and for wastewater, citing higher electric costs from pumping supply (Mary Rhodes pipeline), contract water purchases and required capital work including Owens Stevens plant upgrades. The recommended option for water — the staff’s full proposal — was approved by council after an earlier amendment to scale back the increase failed. The council also approved the wastewater rate proposal, which staff said is driven largely by the city’s EPA consent decree and by required collection and plant improvements.

During the water rate discussion, the city’s financial adviser told council representatives of national rating agencies had raised concerns about recent decisions and requested earlier meetings; staff said rating agencies look at trends in willingness to adjust rates to meet utility obligations and that not taking action can put downward pressure on bond ratings.

Council members and staff repeatedly noted the council had other ways to fund infrastructure, including bond programs. At the meeting the council passed related ordinances and smaller fee adjustments across parks, airport and animal services as part of the consent agenda.

The council did not reinstate a citywide street-user fee during the Sept. 9 session. A motion to add a monthly street maintenance fee failed. Staff had warned that without a recurring street fee the city would face a multi‑million dollar shortfall for routine arterial and collector maintenance beginning in fiscal 2026–27.

Council members said they would continue discussing longer‑term funding options that give residents a direct vote, including voter‑approval tax options, while others said targeted fees tied directly to street users were needed to avoid cuts to street maintenance.

Votes at a glance - Operating budget (second reading, FY2025–26): approved (motion carried). Appropriation ordinance adopted as amended; council removed the Inner Harbor CIP item and approved the operating appropriations for the new fiscal year. (Outcome: approved) - Capital Improvement Plan (FY2025–26, second reading): approved as amended (Inner Harbor removed). (Outcome: approved) - Property tax rate (ordinance setting rate at 0.599774 per $100): adopted (Outcome: approved) - Ordinance ratifying property tax increase reflecting adopted budget (amount cited by staff about $6,061,319): adopted (Outcome: approved) - Water rates (first-reading/adjustment; staff option recommended): council approved staff-recommended option (Outcome: approved) - Wastewater rates (first reading; staff option recommended to meet consent-decree needs): approved (Outcome: approved) - Street-user fee (ordinance to reestablish a monthly street maintenance fee): motion failed (Outcome: failed) - Various fee updates (animal care, airport parking, marina/water-related fees): passed as part of consent agenda or on individual votes (Outcome: approved)

Why it matters: The budget and tax decisions set the city’s spending priorities and the near‑term revenue plan for public safety, utilities and capital work. The utility rate votes reflect an attempt to close projected funding gaps for major water and wastewater capital needs and to maintain bondholder confidence. The council’s failure to pass a new street fee leaves a recurring gap city staff says will require further choices next year.

What’s next: The operating budget becomes effective Oct. 1. Staff will implement the approved water and wastewater rates on the schedule announced in the presentations and report back on implementation matters. Councilmembers said they will continue to examine voter‑directed options and the bond schedule to manage street and other capital needs.