Fair Oaks Ranch council approves first reading of FY 2025–26 budget and sets tax rate at 28.53¢ per $100

The Fair Oaks Ranch City Council on Sept. 15 approved first readings of an ordinance adopting the fiscal year 2025–26 budget and an ordinance levying a property tax rate of 28.53 cents per $100 of taxable valuation, actions required before final adoption and tax-rate implementation.

Summer Fleming, the city's director of finance, told the council the proposed budget includes no change in the city's overall tax rate from the prior year and projects 2.2% sales-tax growth. "This proposed budget incorporates no change in the city's overall tax rate and encompasses all the service delivery and estimated sales tax growth at 2.2% over the prior year budget," Fleming said during the public hearing presentation.

Fleming said operating expenditures are increasing about 7.5%, while total expenditures including capital and transfers rise just under 5%. The proposed budget shows an operating surplus of a little more than $624,000 and is balanced after capital and transfers. The presentation said the operating reserve will increase to $5,310,000 (six months of operating expenditures) and unassigned fund balance is estimated at $2,470,000. The council-directed addition of a full-time drainage lead position was funded by a reduction in street-maintenance appropriations so that general-fund totals remain balanced.

On utilities, Fleming reported operating revenues of $6,240,000 and proposed operating expenses of $6,100,000, producing combined operating income before depreciation of slightly more than $141,000. Water revenues were listed as up 4% and wastewater revenues up 3% from the current adopted budget. The utility presentation flagged a $100,000 wastewater rehabilitation expense and a $208,000 increase in GBRA fees for purchased water.

Capital and reserve details presented in the packet included: a water capital fund budget of over $7,000,000 funded through certificates of obligation, a wastewater capital fund budget of $1,800,000 (also funded by COs), continuation of a drainage CIP with nearly $660,000 in the strategic projects fund, and a bond capital fund budget of over $423,000 for roadway projects tied to last year’s voter-approved general obligation bond issuance.

There were no public speakers signed up for either the budget or tax-rate hearings. After closing the hearings, the council considered the first readings as formal actions. Council took a record vote approving the first reading of the budget ordinance and, separately, approved the first reading of the ordinance levying a property tax rate of 28.53¢ per $100. Because the proposed rate is above the no-new-revenue rate but below the voter-approval rate, City staff said state law required the record vote and specific motion language.

A council member asked for clarification on whether the tax rate represented an increase from last year. City staff responded that the adopted rate is unchanged from the prior year's tax rate but is above the statutory no-new-revenue rate for this tax year (the difference was presented in the motion as roughly 3.65%). Summer Fleming confirmed the distinction: the rate itself is the same as last year, but it exceeds the no-new-revenue threshold used in state calculations.

Votes at a glance - First reading: Ordinance adopting the FY 2025–26 budget. Motion: approve the first reading of an ordinance adopting the fiscal year beginning Oct. 1, 2025, and ending Sept. 30, 2026. Mover: Council member Scott. Second: Council member Keith. Record vote: Mayor Maxton — yes; Council Member Stroup — yes; Mayor Pro Tem Bridal — yes; Council Member Olvera — yes; Council Member Pearson — yes; Council Member Parker — yes; Council Member Swarick — yes. Outcome: approved (first reading).

- First reading: Ordinance levying property tax rate of 28.53¢ per $100 taxable valuation for tax year 2025; determining due and delinquent dates and providing an effective date. Motion: adopt a tax rate of 28.53¢ per $100 taxable valuation (motion read per statutory requirement). Mover: Council member Emily. Second: Council member Dale. Record vote: Mayor Maxton — yes; Council Member Stroup — yes; Mayor Pro Tem Bridal — yes; Council Member Olvera — yes; Council Member Pearson — yes; Council Member Parker — yes; Council Member Swarick — yes. Outcome: approved (first reading).

What the council did not decide tonight: both measures advanced on first reading and require final readings/formal adoption under the city's ordinance schedule; the tax rate vote met state requirements for record votes because it exceeded the no-new-revenue rate. City staff said no additional public comment was received during the public hearings.

Why it matters: the budget sets the city's operating and capital priorities for FY 2025–26, funds road and drainage projects tied to bond and CO proceeds, and allocates funds for public safety and utility operations. The tax-rate action enables the city to levy property taxes in accordance with the adopted budget and state law requirements.

Sources and next steps: staff said final adoption of both ordinances will follow required readings; staff also noted that the drainage lead position and the related reallocation of street-maintenance funds were included in the updated budget exhibit provided to council.