City Manager presents proposed FY 2025–26 budget; highlights water/sewer rate increases, compensation proposals and capital plans

City Manager Don Magner presented the city manager’s proposed fiscal year 2025–26 budget to the Richardson City Council, detailing revenue forecasts, expenditure priorities and next steps for public hearings and adoption.

Magner said he filed the budget and that the council will hold two public hearings: one on the tax rate and one on the budget, with the council scheduled to consider adoption on September 15. He outlined four key budget drivers — global/regional economic uncertainty, supply chain and commodity pressure, workforce and labor shortages, and legislative impacts from the Texas Legislature — and said those factors influenced the proposal.

On utilities, Magner proposed a 6% increase in water and sewer rates. He described the increase as a response to wholesale cost pressures, including a roughly 4% wholesale water increase and a 15.5% increase in sewer treatment costs passed through to the city. Magner said the proposed budget leaves roughly $4 million of FY 2025 year‑end fund balance in the water and sewer fund to help smooth what otherwise would have been a larger near‑term increase.

Magner proposed compensation adjustments intended to address recruitment and retention: a 4.5% merit‑based pay adjustment for sworn police and fire personnel (2.5% in October and 2% in April 2026), a 2.5% merit increase for general personnel in October and a $1 increase in the minimum starting wage for full‑time permanent and part‑time permanent employees (from $20 to $21). He said the budget includes $120,000 for market‑based adjustments to bring some pay ranges into competitive alignment.

Public safety funding remains a major share of the general fund. Magner said the police budget is now over $40 million and the fire budget nearly $33 million; public safety accounts for roughly 40% of all general fund expenditures. The budget funds a new fire recruitment class (12 apprentices) and includes purchases for PPE and vehicles (two ambulances and a brush truck), and 13 patrol vehicles for police.

Magner also outlined capital and infrastructure priorities: ongoing work from the 2021 bond program, $20 million in water and wastewater projects, funding for the Heights Aquatic Center improvements (noted as the highest priority in the city’s aquatics master plan), and drainage projects funded by a proposed $1 per month drainage fee increase. He said transfer‑outs for streets and alleys, parks maintenance and facility maintenance are unchanged from the prior year.

On revenues and tax issues, Magner said certified taxable value was down year over year (the presentation cited a 0.61% decline after adjustments) and described one‑time appraisal district errors that reduced FY 2026 property tax collections by several million dollars; the city has set aside approximately $372,000 in a reserve to address a supplemental roll adjustment. He recommended maintaining the current tax rate and noted the city called a public hearing on the tax rate for September 8.

Magner described other rate and fee proposals: a $0.50 per month residential solid waste increase (with a 26% senior discount), some building and parks fee changes estimated to generate roughly $312,000, and a proposal to raise the facility maintenance fee for the Eisemann Center. He said sales tax projections were conservative but budgeted at $54.2 million, and emphasized the city’s continued economic development efforts and a multi‑year capital plan with an estimated $64.1 million in FY 2026 capital spending across funds.

Council members asked questions about the North Texas Municipal Water District rate increases and whether the city can push the district for different capital or conservation strategies. Magner and other staff said the district’s capital plan and reserve levels drive a large share of the rate increases; council members suggested pursuing a rate study and exploring conservation incentives and tiered rates. Finance staff said the district provides a cost‑of‑service analysis every three years and the city had just received the second such analysis.

No votes or formal actions were recorded during the presentation; the transcript records discussion and questions from multiple council members and staff clarifications. Magner said staff will publish materials and return for public hearings and council consideration on the schedule detailed in the presentation.