Lake Jackson presents proposed $63 million all‑funds budget; staff recommends 9.5% water/sewer increase for 2026 to cover capital needs

City staff on July 7 presented the proposed fiscal 2025–26 budget to the Lake Jackson City Council and recommended a utility-rate adjustment aimed at funding near-term capital projects, including a planned $20 million debt issuance tied to Lift Station 1 reconstruction.

Finance staff said the total all‑funds budget is about $63 million, with the general operating fund proposed at roughly $28.5 million and the utility fund at about $22.6 million. The manager recommended a “no new revenue” maintenance-and-operation tax rate while the city’s I&S (debt) rate would rise because of recently voter‑approved bonds; staff showed the city’s current tax rate at 0.3259 and a proposed rate of 0.3673 reflecting debt service increases.

The most substantial operational recommendation affecting residents was a proposed combined water and wastewater rate increase of about 9.5% for 2026, described by NewGen consultant Matthew Garrett as a smoothing step to cover higher wholesale water costs and debt service associated with capital projects. Staff described using available fund balance to offset a portion of the immediate increase so the 2026 increase would be roughly 9.5% rather than a larger spike; Garrett said without that drawdown the increase would have been about 14%.

Key figures and proposals discussed

- All funds (presented): approximately $63,000,000. - General operating fund (proposed): about $28,500,000 (increase ~3.9% year over year). - Utility fund (proposed): about $22,600,000; recommended water + sewer rate increase ~9.5% for 2026; estimated $7.23 monthly increase for a 5,000‑gallon residential customer (staff example). - Proposed residential garbage/recycling increase: $1.00 per month; commercial garbage increase: 5%. - Budgeted pay increases: $586,000 set aside for “pay for performance” (a 4% pool across positions in staff’s proposal) and $171,000 to fund three authorized positions for animal control facility operations. - Brazosport Water Authority (BWA) charges and Harris Reservoir expansion were cited as drivers of wholesale cost increases (staff said a projected 15¢ per 1,000‑gallon increase tied to Harris Reservoir staging is included in the BWA forecast). NewGen factored BWA charges into the five‑year forecast.

Staff and consultant framing

Matthew Garrett of NewGen said the city needs to smooth rate changes over multiple years to maintain debt coverage and reserve policy targets while meeting capital obligations (notably the lift‑station project and later wastewater capital needs). The study included a 5‑year capital plan of roughly $69–70 million with $20 million already identified for Lift Station 1 work; staff recommended modest, phased rate increases rather than a larger one‑year spike.

Council discussion

Council members asked about alternatives such as rate‑design changes that would reallocate recovery between residential and commercial users and approaches to preserve market‑competitive starting pay for critical positions while maintaining some merit/incentive structure. Staff said those design changes would require their own workshop and community outreach and did not present a rate‑design change for adoption at this meeting.

Next steps

Staff scheduled a budget workshop for Saturday, July 19, to review details. The council will consider tax-rate adoption and utility-rate ordinances following required public‑notice processes. Staff indicated they will return with more detailed materials and answered council questions about assumptions and contingencies.