Garland — Garland City Council members on Saturday agreed to delay a proposed November 2025 ballot measure that would shift part of the property tax rate from debt service to the operations and maintenance (O&M) rate, and spent most of a special work session reviewing a proposed $360 million 2025 bond package and a $575 million five‑year capital improvement program (CIP).

The council signaled unanimous support to push the tax-rate change to the November 2026 ballot after hearing finance staff’s recommendation to wait a year to avoid overlapping voter asks and to reduce budget and certification risks. “Our recommendation is to go ahead and push this off to November of 2026,” Budget and Finance staff member Matt said during the presentation.

Why it matters: Finance staff said the roughly $0.02 of tax-rate shift being discussed would generate about $7 million annually for the general fund if moved from debt service to O&M, preserving operating capacity for services and new facilities. But staff warned the change would reduce capital revenue and, if acted on for November 2025, would require an expedited budget schedule and rely on uncertified property‑tax numbers during the summer budget process.

What the council reviewed

Bond program: Staff described four proposed propositions totaling $360 million. The largest is a streets and corridors proposition of $230 million — including $20 million added for gateways and corridors — representing about 64% of the total package. Economic development measures were shown at roughly $75 million, cultural arts (focused on the Granville Arts Center) at $25 million, and parks/Harbor Point waterfront access at $30 million. Bond counsel and staff said language on several propositions aims to be flexible so the city can respond to unanticipated needs while meeting legal ballot requirements.

CIP and debt strategy: City staff presented the proposed 2025 CIP, a five‑year plan with a 2025 tax‑supported CIP of roughly $230.9 million and utility/internal service CIPs totaling approximately $335.3 million for 2025. City staff framed priorities as “finish what we have started, take care of what we have, and plan for the future.” Officials also showed a longer-term “debt donut” that aggregates bond programs, CIP needs and other obligations and said the city has capacity to issue new debt but faces rating‑related risks.

Rating concern: Staff noted Garland’s 2024 Fitch downgrade from AAA and explained Fitch’s methodology now weights demographic factors (population growth, median household income and education) heavily — about 40% of the rating. Staff told council they expect Fitch may move Garland from AA+ to AA in the near term and that lower ratings translate into higher interest costs. Staff estimated that a one‑notch drop (AA+ to AA) could raise annual interest by roughly $150,000 on $1 billion of issuance over five years; larger downgrades would have much bigger impacts and could require substantial reductions to the CIP or bond package.

Tax exemptions discussion: The council also discussed potential changes to the city’s homestead and senior exemptions. Staff outlined two broad approaches used by peer cities: focused senior exemptions (e.g., Richardson) or a balanced homestead and senior program like Garland’s. Current levels described in the session were a senior exemption discussed as “56,000” (as stated by staff) and a homestead exemption at 10%; staff presented sample options, including a 1% homestead increase plus a $4,000 senior increase and estimated impacts on typical residential, rental and commercial taxpayers. Finance staff stressed that because of the SB 2 framework, increasing exemptions shifts part of the operating tax burden to non‑homestead property owners (rental/commercial).

Local projects and next steps

Gatewood drainage: Engineering staff presented a proposed downstream drainage project to reduce recurring flooding in the Gatewood neighborhood and nearby parcels. The presentation identified about 12 parcels that currently see inundation in a 100‑year storm and estimated the downstream improvement price at roughly $6.7 million using stormwater utility resources; staff described it as a potential unfunded project that could be accelerated if council directs additional resources.

Department highlights: Staff from parks, streets/transportation, fire, facilities, Firewheel Golf Park, landfill, sanitation, water/wastewater and Garland Power & Light gave project updates and spending requests included in the CIP. Notable items included Holford Recreation Center completion (Q2 2025), Surf & Swim aquatics replacement (bid and under construction; adjusted for inflation), the Rowlett Road cycle track (a Dallas County project expected to begin construction in summer), and an AMI (advanced metering infrastructure) pilot and meter‑replacement program for Garland Power & Light expected to start in 2025 with full rollout over several years.

Sanitation and rates: Sanitation staff proposed a package of equipment replacements and additional reserve units, and previewed a possible sanitation rate impact for FY 2026 — a $0.50 monthly increase for residential service and a 3% commercial rate increase — figures staff said they plan to return to council as part of the FY 2026 operating budget discussions.

Water/wastewater pressures: Utility staff said they projected 4–5% year‑over‑year rate pressure tied largely to wholesale water cost increases from the North Texas Municipal Water District and continuing wastewater operating needs; staff also noted potential regulatory uncertainties (e.g., lead & copper rules and treatment of PFAS) that could require future capital work.

Council direction and schedule: Staff told council the Administrative Services Committee will take up homestead/senior exemption options on Jan. 22. For the bond/CIP approvals, staff identified upcoming council dates: a combined work session and regular meeting on Jan. 21 with a public hearing, and potential final actions in early February depending on council direction. Staff asked council to email follow‑up questions so the teams can deliver additional detail before formal votes.

Quotes from the meeting

“Our recommendation is to go ahead and push this off to November of 2026,” Budget and Finance staff member Matt said when presenting the O&M shift option.

“To introduce our CIP, I wanted to just touch on a couple of things ... finish what we have started, take care of what we have, and plan for the future,” CIP presenter Rex said while summarizing priorities.

What’s next: Staff will present refined exemption options to the Administrative Services Committee on Jan. 22. Council will consider final CIP and bond package steps in the coming weeks; bond counsel is still finalizing language on at least one economic development item and staff continue to model debt capacity and rating‑sensitivity scenarios.

Reported facts are limited to statements and figures presented on the record at the Jan. special session. Where staff identified ranges, estimates or deadlines (for example the July 1 deadline to finalize exemption changes), the article reports those as stated during the session.