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Staff outlines SB2 constraints and potential FY2027 bond program; council asks for options and public education
Summary
City leaders reviewed ongoing implications of Texas property-tax reform (SB2) and the need to manage I&S tax-rate assumptions; staff said the city has bond capacity for FY2027 and will return in May with scenarios on debt-service-rate management, potential projects and outreach.
City Manager and finance staff framed the work session's budget conversation with a review of SB2 implications and long-term planning steps. City staff described mitigation strategies including priority-based budgeting, grant and partnership pursuits and diversification of the tax base to offset revenue constraints from state property-tax rules.
Finance staff said the city could feasibly pursue a bond program for FY2027 (the last sale was in FY25 for $48.5M) and reviewed candidate capital projects under consideration (public facilities including Fire Station 4, Pleasant Run and other CIP items). Staff emphasized the importance of managing the interest-and-sinking (I&S) debt service rate and said they would return with scenarios, assumptions and financial-adviser input in May. Council also asked for more proactive public education around tax mechanics and the timing/appearance of property-tax bills to avoid misperceptions about city actions.
