Rockwall City Council directs staff to publish proposed tax rate, asks for three budget scenarios

Rockwall City Council on Monday directed city staff to publish a proposed property tax rate after a lengthy FY2026 budget presentation and debate over tradeoffs between preserving city services and limiting taxpayer burden.

City staff presenter Mary Smith told the council the draft budget is anchored on a proposed property tax rate of $0.2575 per $100 of assessed value and reflects strong construction-related revenue growth. "So in front of you, you have the proposed budget for fiscal year 2026," Smith said, and described a projected 8% rise in assessed value and a recommended small increase in the combined tax rate to fund operations, market salary adjustments and capital needs.

The discussion focused on competing priorities. Several council members said market pay and retention for police and fire are urgent; Mary Smith recommended market adjustments (including a proposed 5% across many fire ranks and smaller adjustments for police this cycle) to keep the city competitive. "Most of the expenditures we have are in labor," Smith said, noting health insurance and other benefits are putting upward pressure on costs.

Other members emphasized the burden on homeowners and called for caution. Mayor Tim McCallum said he has long opposed tax increases, saying, "I've never voted for a tax increase. I'll never vote for a tax increase." Councilmember Henson moved to advertise the no-new-revenue rate (0.234687) as the highest advertised rate; Councilwoman Jeffers seconded the motion, which failed on a 3–3 vote.

The council then considered a motion by Mayor Pro Tem Mueller to publish the higher advertised rate proposed by staff while directing staff to return with three scenarios — the advertised/proposed rate, the current rate, and the no-new-revenue rate — showing what each would mean for operations and projects. That motion passed 4–2, with Councilmembers Henson and McCallum voting against. "This is not committing any council member to any rate," Councilwoman Campbell said during debate, stressing that publishing is part of the public-notice process.

The council also discussed specific lines in the budget: preserving a 6½-month reserve policy, ending the long-running volunteer fire ranks at year-end, funding nine police vehicles in the upcoming budget, and planning for issuance of up to $22 million from the 2018 voter-approved street reconstruction bonds to fund ready-to-build road projects. Mary Smith said TIF revenues in the Harbor District have grown substantially and proposed using $4–5 million of TIF-backed debt to repair boat docks and other harbor amenities.

Phil Wagner, president of the Rockwall Economic Development Corporation, briefed the council on EDC priorities — including two large projects that together account for roughly $150 million in taxable value (IKEA and a separate $90 million project) and plans for pad-ready sites and a regional detention pond in the tech park. Wagner asked the council to consider continued EDC investment to keep sites shovel-ready; some council members urged staff to provide exact pad-site cost estimates before final approval.

Councilmembers requested staff produce the three-rate scenarios in writing and return with detail by the next work period so council can deliberate before the Sept. 15 adoption vote. The publication (advertising) of the proposed rate will trigger a public hearing on Sept. 2 and allow the council to adopt the rate on Sept. 15, Mary Smith said.

The work session closed with the council giving direction on the advertised rate and requesting the scenario analysis; Mayor McCallum adjourned the meeting at 6:56 p.m.

The budget adoption is scheduled for Sept. 15; the advertised rate and scenario worksheets are to be provided to council in advance of that meeting.