Lancaster city manager outlines $107.8M proposed budget, proposes about 1¢ tax‑rate cut; council accepts tax worksheets

Lancaster’s city manager presented a proposed FY2025–26 budget on Aug. 4 that staff says balances anticipated revenues of $107,760,699 against expenditures of about $104,000,001 and builds in conservative assumptions for growth and protested property values.

The city manager told the council the budget is framed to implement the council’s strategic priorities while assuming modest revenue growth of 3–5%. He proposed decreasing the city’s property tax rate by roughly one cent — from about $0.60 to $0.59 per $100 of assessed value — shifting some dollars from maintenance and operations into the interest and sinking (debt) portion while maintaining the street‑maintenance and new‑equipment allocations. “We are proposing to decrease the property tax rate for fiscal year 25–26 close to 1¢, going from 60¢ to 59¢,” the city manager said, explaining the change in light of recent state law adjustments and new construction captured on the tax roll.

Why it matters: staff reported more than $198.6 million of new construction value hit the tax roll this year and noted commercial and industrial growth now account for about 64% of the taxable base — a shift the city has pursued to reduce the residential tax burden. The manager also warned that $334,955,064 of taxable value remains under protest and, if protests are successful, the city could lose an estimated ~$140 million in value; staff said that risk was incorporated into the proposed figures.

The proposal preserves core services and continues planned capital work. Highlights include completion of phase 1 of an AMI meter replacement program, water‑main work and street overlays paid from a $30 million certificate‑of‑obligation program (17 of 25 CO‑funded streets are complete), targeted park and recreation improvements, and a plan to open a fourth fire station (staffing hires for Station 4 are included). The budget also funds a pilot public‑transportation contract with Star Transit, an annual cost of $141,005.31 that staff says should deliver about 2,500 monthly trips beginning Oct. 1.

On personnel, the manager proposed a 3% across‑the‑board pay adjustment and noted recent larger adjustments for public‑safety staff; Doreen Lee, assistant city manager and civil‑service director, explained the mechanics: applying 3% to the pay plan on Oct. 1 would raise each step by 3% while preserving the existing gaps between steps and leaving step anniversary increases in place.

Formal council action: after the presentation the council convened a special meeting, approved the consent agenda item adopting the proposed budget calendar, and took up the tax‑rate documents required by Texas Tax Code §26.04. The council unanimously accepted the tax‑rate calculation worksheets and related documents by roll call: Council Member Strandberg (Aye), Council Member Degloski (Aye), Council Member Mejia (Aye), the Mayor (Aye), Council Member Robinson (Aye), Mayor Pro Tem Cheatham (Aye) and Deputy Mayor Pro Tem Gooden Davis (Aye). A motion to approve action item 2 carried unanimously.

Next steps and public engagement: staff will distribute budget books with line‑item detail and follow the advertised schedule: a public budget town‑hall on Aug. 14 at 6:30 p.m. at the Lancaster Recreation Center (1700 Veterans Memorial Parkway), a work session and the city’s first public hearing on Aug. 18, and a final consideration/possible adoption on Aug. 25 (staff said the second hearing is optional if the legal threshold is not met). The manager said staff will return on Aug. 11 to present the utility rate study and water/wastewater fund.

The council’s votes on Aug. 4 accepted the required tax‑rate worksheets and moved the budget calendar forward; adoption of the full budget and tax rate will occur at later public meetings after the advertised hearings and any required record votes.