Cedar Park council sets maximum 2026 tax rate, reviews $215.2 million proposed budget and schedules public hearings

Cedar Park city staff on Aug. — presented the proposed fiscal year 2026 budget and asked council to set a maximum property tax rate and public hearing dates required by state law. Finance staff recommended a proposed maximum tax rate of $0.36 per $100 of taxable value and two public hearings, and council voted to set that rate and the hearing dates.

Erica Solis of the finance department told council the total proposed FY2026 budget is $215,200,000, with a general fund of $82,900,000 and a utility fund budgeted at $45,000,000. Property tax is projected to be 40% of budgeted resources, with sales tax at about 30%. Solis described the two components of the tax rate — maintenance and operations (M&O) and interest and sinking (I&S) — and said the proposed M&O portion is 0.193554 and the I&S portion 0.166446, for a combined proposed rate of 36¢ per $100 of taxable value, a 0.3¢ decrease from the current 36.3¢.

Solis said the proposed rate uses the voter-approval M&O calculation allowed under truth-in-taxation rules and that, under the proposed rate and the change in average taxable value (from $511,000 to $541,000 in the example given), the city portion of the tax bill on an average-valued home would increase by about $96 (roughly $8 per month), or 4.3% over the prior year. Solis also outlined proposed general fund expenditures, calling out $1,300,000 in adjustments to base and $5,900,000 in requested enhancements (including personnel and one-time projects). The presentation listed personnel additions in public safety and other departments, one-time requests such as $300,000 for microtransit and a $500,000 placeholder for a comprehensive-plan update, and capital projects proposed to be funded with short-term notes.

Council members asked questions about exemptions, the comprehensive-plan placeholder, debt-service capacity and specific capital items. Multiple council members debated whether a $500,000 comprehensive-plan update placeholder was appropriate; some said the current plan has worked well and questioned the scope and cost, while others said circumstances have changed and a full update could require extensive public engagement. Solis and other staff explained the placeholder is optional and could be removed or revised before final budget adoption.

Solis said the budget maintains a fund balance at about 34% of recurring expenditures — within the city's 25–50% policy target — and noted the budget proposes a $2,250,000 defeasance of debt as part of the I&S plan. The presentation also covered utility-fund projects (including an AMI meter replacement phase) and proposed utility revenue bonds; proposed type A and type B economic-development and community projects; and on-the-horizon items such as TMRS (Texas Municipal Retirement System) changes and health-insurance bidding.

Motion and vote: A council member moved to set a proposed maximum tax rate of $0.36 per $100 valuation (M&O 0.193554¢; I&S 0.166446¢) and to set public hearing dates for Sept. 4 and Sept. 11, 2025, for adoption of the budget and tax rate. The motion was seconded and passed unanimously.

Ending: Solis said staff will publish required notices and the city will hold the scheduled hearings before final adoption; council scheduled additional budget discussion for Aug. 14 and staff posted the proposed budget online on the city's budget website.