Southlake council hears FY2026 budget overview; staff proposes 1¢ tax-rate cut

City staff presented a full overview of the City of Southlake’s proposed fiscal year 2026 budget during a work session on Aug. 19, saying the package prioritizes tax relief, infrastructure reinvestment and workforce retention.

"One of our strongest commitments is to provide meaningful tax relief while maintaining stability for city services," Chief Financial Officer Sharon Jackson said as she opened the budget presentation to the council. Jackson told council the proposed budget would reduce the city tax rate by one cent, from 3.305 to 2.95 per $100 of taxable value, and that the combination of rate reductions and exemptions represents a deliberate policy of relief.

The presentation framed the budget as a strategic plan rather than a one-year financial document. City Manager Allison Lisonbee said the draft budget aligns spending with the council's long-term strategy map and supports core services including police, fire, utilities, parks and community development.

Sharon Jackson and staff provided these highlights during the briefing: - Total proposed operating funds exceed $137,000,000.00 across city funds. - Appraised value for FY2026 was presented as roughly $15.5 billion with total taxable value (after exemptions) of about $12.4 billion and an average taxable home value of $916,000. - New construction comprised about 30% of new taxable value, with roughly 82% of that residential and 18% commercial. - The draft budget proposes reducing the tax rate by 1¢, representing an estimated $1.4 million reduction in city property tax revenue. - The city proposes continuing a 20% homestead exemption and senior/disabled exemptions; staff said the homestead exemption reduces the average taxable home by about $223,000 and the combined exemptions reduce annual city revenue by roughly $6.3 million. - The city plans to use a balanced capital-funding approach with more than $17 million in cash for capital improvements paired with limited certificates of obligation where appropriate; staff noted the city's outstanding debt is scheduled to be paid off within about 10 years and debt as a percent of assessed value (0.23%) is well below policy limits. - Personnel costs are the largest operating driver (about 70% of costs). The FY2026 budget includes market adjustments and a 2–4% merit pool; staff said public-safety positions are about 5.5% behind target and general-government positions are about 2.5% behind target. - Health-insurance renewal was described as favorable compared with national trends: staff said medical premiums would increase about 5% and dental about 1.5% and the city will increase its dependent contribution to remain competitive.

City Manager Allison Lisonbee and Assistant City Manager Stacy Black emphasized the proposal’s workforce investments and long-range forecasting. Lisonbee described the budget as “a strategic framework” that preserves service quality while preparing for build-out and slower revenue growth in some categories.

Why it matters: the presentation launches the public process on the FY2026 budget. Public hearings and formal votes are scheduled for the council’s September meetings (Sept. 2 and Sept. 16), including statutorily required truth-in-taxation notices if the proposed rate exceeds the no-new-revenue threshold.

Council did not take a final vote on the budget at the Aug. 19 meeting; the session was an informational work session and staff said they are available to answer council questions ahead of the public hearings in September.