Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Budget topic
No spam. Unsubscribe anytime.
Pearland Council advances balanced FY2026 budget and first‑reading tax rate after heated reserve debate
Summary
Council held a lengthy public hearing on the FY2025–26 budget, discussed reserve policy and potential cuts that could lower the tax rate, and on first readings approved the budget package and an ordinance adopting a 63¢ tax rate (votes 5–1).
City staff presented a balanced FY2025–26 budget that staff said meets policy minimums and funds prioritized items including additional streets funding and market adjustments for personnel, while proposing a 63¢ property tax rate (0.351504 M&O and 0.278496 debt rate) to support an estimated $63.5 million in property‑tax‑supported revenue.
Rachel Winslow and Trent Merritt told council the proposed budget adds $800,000 for streets rehabilitation for FY26 and funds step and market adjustments (a combined market/step approach that produces overall increases for various employee groups). Winslow said the budget maintains a 90‑day operating reserve and that the proposed tax rate is a half‑cent lower than last year’s rate in nominal terms.
Council debate focused on whether to reduce the proposed tax rate to the no‑new‑revenue rate and where to find roughly $1.7 million to close that gap. Member Cade suggested reducing reserves from 90 to 85 days to free approximately $1.65 million; Mayor and staff cautioned that shifting fund‑balance policy could risk a credit‑rating downgrade. "If we go against our policy, that could be a ding on our credit rating," the mayor said, urging caution and requesting staff and financial‑advisor analysis before changing reserve policy.
After extended discussion and questions about priorities, staffing and overtime, council voted on the first reading of the budget and related matters; the motion passed 5–1 (Member Patel opposed). The companion ratification motion required by state law and the first reading of the ordinance adopting the 63¢ tax rate also passed on first reading 5–1. Council scheduled required second readings and ratification on Sept. 22.
What's next: Second reading and final adoption of the FY26 budget, tax rate ordinance, and non‑development fees will return to council on Sept. 22. Staff was directed to continue working with the audit committee and financial advisors to analyze fund‑balance policy options for future consideration.
