Heath council adopts FY2025–26 budget, sets tax rate at $0.27565 and approves fee, contract and budget amendments

The Heath City Council on Sept. 23 adopted the city’s fiscal 2025–26 budget, set the property tax rate at $0.27565 per $100 of taxable value and approved several related ordinances, a culvert contract and a budget amendment to fund Water Well No. 1 and license‑plate cameras.

City Manager Steve Alexander presented the budget and related financial options and told the council the staff recommendation was to split the planned water debt into two issues (option 2) rather than issue the full amount at once. Council approved that option; the ordinance adopting the budget (No. 250,923 A, option 2) passed on a recorded vote. Mayor Jeremiah McClure, Mayor Pro Tem Scott Dodson, Council members Cindy Horn, Johnny Myers, Michelle Thurgood and Mitch Olby voted in favor; Council member Ryan Mormon recorded the lone vote against the budget ordinance.

At a separate vote the council adopted the property tax ordinance (No. 250,923 B) setting the voter-approval rate at $0.27565 per $100 of taxable valuation. The council also adopted a resolution (No. 250,923 A) ratifying that increase as required by state law. City staff and the mayor clarified the tax rate is lower than last year’s rate (29.0311¢ to 27.565¢), but rising property values mean the calculation is an “effective” tax increase under state rules; that statutory phrasing requires a ratification.

Council also approved the FY 2025–26 master fee schedule (ordinance 250,923 C), which includes water and wastewater rate adjustments for 2026 tied to the water financing options the council considered. Separately, the council amended the current fiscal year budget (ordinance 250,923 D) to add $5,497,777 for construction of Water Well No. 1 and $65,400 for expanded Flock license‑plate recognition cameras. That amendment passed with one dissenting vote.

Other actions included approval of a final plat (case FP202502) for two tracts at 7440 S. FM 549, and award of the Meadowview Road culvert replacement project to a low bidder. The council approved the consent agenda without objection.

Votes at a glance (key items) - Ordinance 250,923 A — Adopt FY 2025–26 budget, option 2: Passed (record vote). Mover: motion recorded; second recorded. Vote: McClure, Dodson, Horn, Myers, Thurgood, Olby — yes; Mormon — no. Notes: Option 2 splits the bond issuance (Phase 1: $40,500,000 in FY2026; Phase 2: $21,500,000 in FY2027). Staff presented financial impacts (example figures: revenues reduced to $91,700,000; appropriations $110,500,000; ending fund balance $43,400,000 under Option 2 as presented). - Ordinance 250,923 B — Levy property tax rate at $0.27565 per $100 (voter-approval rate): Passed (record vote). Vote recorded as unanimous in roll call. Note: City attorney/staff explained rate decline vs. last year while taxable value increases trigger state-required “effective increase” language. - Resolution 250,923 A — Ratify property tax increase: Passed (record vote). Notes: statutory ratification because proposed rate exceeded the no-new-revenue maintenance-and‑operation rate. - Ordinance 250,923 C — Adopt master fee schedule (FY2026) (option 2): Passed unanimously. Notes: water rate adjustments for 2026 only; later years presented as projected scenarios. - Ordinance 250,923 D — Amend FY2024–25 budget to add $5,497,777 (Water Well No. 1) and $65,400 (Flock cameras): Passed. Vote: recorded as 6–1 (one no). Notes: funding moved from utility capital reserve; staff said some costs will be reimbursed from future CO proceeds. - Case FP202502 — Final plat approval, 2 tracts totaling 5.372 acres, 7440 S. FM 549: Passed unanimously. Mover: Councilman Mormon; Second: Councilman Thurgood. Notes: staff and Planning & Zoning recommended approval; structure to be built outside mapped floodplain areas. - Meadowview Road culvert replacement — award to low bidder (amount shown $780,915): Motion passed unanimously. Staff presented project history, emergency designation, and design choice; engineering explained design uses larger box culverts and floodgates rather than raising the roadway to contain costs. - Consent agenda (minutes and routine items): Accepted unanimously.

What the votes mean - Financing approach: Council chose the phased (two-issue) bond approach (option 2) staff recommended. Staff said splitting the issue reduces the near-term required rate increases and times borrowing to match construction needs. - Household bills: Staff and the consultant presented sample bill impacts; one illustrative household using 15,000 gallons (10,000 wastewater) would see average monthly bills move in the models from about $236.13 to between $281 and $285 depending on the financing option and timing presented.

Context and immediate next steps Staff will proceed with the actions required by the adopted ordinances: preparing bond issuance documents consistent with the phased plan, launching the fee schedule for FY2026, and beginning construction work for Water Well No. 1. Staff said they will return with resolutions and formal bond‑issuance paperwork to reimburse capital expenditures from certificates of obligation when those COs are sold.

Ending Council members who spoke emphasized that the budget choices are intended to preserve Heath’s long‑term water supply and storage while limiting near‑term rate shocks; at least one council member recorded a dissent on the budget motion. The council moved on after approving the final items and project updates.