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Highland Village adopts FY2025–26 budget; council conducts first read of tax ordinance
Summary
Council adopted the fiscal year 2025–26 budget on a unanimous record vote and held the first read of the tax ordinance that would set the ad valorem tax rate at 0.500984; staff presented budget highlights including a 3% employee pay increase, additions to public safety and street equipment, and an estimated 32% fund balance for FY2026.
The Highland Village City Council on Sept. 9 adopted the fiscal year 2025–26 budget on a unanimous record vote and held a first reading — also approved unanimously — of an ordinance levying ad valorem taxes at a rate of 0.500984 per $100 of assessed valuation.
City staff presented the manager’s recommended budget and opened a public hearing; no members of the public spoke during the hearing. Staff said local assessed valuations increased 4.2% this year to just over $3.5 billion, which staff said translates to approximately $760,000 in additional revenue. The proposed tax rate on the agenda was 0.500984, compared with the prior year rate of 0.500273.
Key budget highlights presented by staff included a 3% salary increase for all employees, two additional outdoor warning sirens for the fire department and new wildland response gear, a new drone program and additional cameras for the police department (partly financed with tax notes), a hot-mix asphalt repair vehicle for streets, and new programming funds for teen recreation. Staff also provided utility-fund revenue estimates and said the general fund’s estimated unassigned fund balance for FY2026 is about 32% (above the city’s 20–25% target) while noting planned deficit spending of roughly $2.2 million that would draw down reserves.
Councilmember comments focused on fiscal outlook and the need for future restraint; one council member asked staff to gather options to address a localized safety concern at Village Parkway and Marketplace (accident data was cited). After presentation and public hearing, Councilmember Cox moved to approve Ordinance 2025-13-30 adopting the FY2025–26 budget; the motion was seconded and passed on a record vote of 7-0. The council then approved on first read Ordinance 2025-13-31 to levy the ad valorem tax rate (0.500984) by the same 7-0 margin.
Why it matters: the adopted budget sets city spending priorities and departmental staffing and capital purchase plans for the coming year, and the tax ordinance establishes the levy that will fund city services. Staff flagged that future years will be more challenging due to slower sales tax growth and other pressures.
Council action and next steps: the budget ordinance was adopted (record vote 7-0). The tax ordinance was approved on first reading with specific statutory language required when a proposed rate raises revenue above the no-new-revenue rate; staff explained the motion included that required language. A second reading of the tax ordinance will be required before final adoption per state law.
