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Heath council reviews FY26 budget that includes $72M water-bridge proposal; staff to return with alternatives and timeline
Summary
Council reviewed the proposed FY2025–26 budget emphasizing a capital program led by a proposed $72 million bond for wells and storage, substantial increases to sewer wholesale costs, and personnel changes; staff will return with phased bond and rate models ahead of targeted hearings in August and September.
City staff presented the Heath City Council with the preliminary FY2025–26 budget and a capital-improvement plan dominated by a proposed water-bridge program. The package includes a proposed $72 million bond to fund six water wells, elevated and ground storage tanks (including a shared 3-million-gallon tank with a neighboring jurisdiction) and other water-supply improvements.
Staff and consultant presentations stressed two linked pressures: wholesale price increases from the North Texas Municipal Water District and the Buffalo Creek interceptor system, and rising capital and construction costs. Staff said the Buffalo Creek interceptor charge is forecast to increase about 58% next fiscal year and that wholesale water purchase costs are expected to grow annually in the mid single digits to higher percentages over the next decade.
The FY26 proposed budget summary shows total expenses and a capital plan driven by the water bridge; staff noted proposed revenue impacts: property-tax projections that depend on whether council adopts the de minimis tax rate, elevated water-sale revenue assumptions under new rates, and expected increases in sewer-collection revenue tied to wholesaler pass-through charges.
On personnel, the proposed budget includes several new hires and adjustments: three additional public-safety officers to staff a planned new station, one full-time city engineer position (to bring engineering capacity in-house), parks and street staffing adjustments, and a 4% across-the-board pay assumption along with provisions to reestablish merit-based evaluations in the next cycle. Staff estimated an approximate 10% increase in operations across the general and utility funds driven by these personnel and contract changes.
Council and staff discussed sequencing and options for bonding and rate-setting. Council members asked staff to evaluate alternative structures: issuing one large bond versus phasing, broadening bond purposes (water, sewer, roads) for flexibility, and delivering detailed models showing the rate and bill impacts of different phasing and debt-service assumptions. Staff committed to work with Willdan and bond counsel to return with more granular options and to align next procedural steps with the city’s budget and tax-rate calendar: proposed rate/tax action on Aug. 11, public hearings on Sept. 9, and final adoption planned for Sept. 23 (statutory deadline Sept. 30).
No formal votes were taken at the workshop; council left with staff assignments to refine models, check billing-system capabilities for seasonal/rate-schedule changes, and return with clearer per-project cost and timing estimates to inform any final bond or rate decisions.
