The proposed tax rate of $0.500984 per $100 of assessed value is an increase from the FY 2024-2025 tax rate of $0.500273. Council can choose to adopt a lower tax rate, but it cannot be higher than the proposed rate.
City staff will receive feedback from residents and vote on the proposed budget and tax rate at a Sept. 9 meeting.
Breaking down the budget
The city is projecting $41.58 million in revenue from property tax, sales tax and other fees and grants.
The city’s projected revenue for the general fund totals $22.9 million, which is a 0.2% increase from last year, according to city documents.
The city expects to spend $26.2 million from the general fund in expenditures, which is a 5.8% increase from FY 2024-25.
Of the $26.2 million:
- $7.03 million is budgeted for the police department
- $4.41 million is allocated for the fire department
- $3.18 million is budgeted for building/fleet maintenance
- $2.68 is budgeted for parks
- $2.29 million is designated for streets
- $23.64 million on capital projects
- Around $5.55 million on utility operations
- $4.28 million on the debt service fund
Property taxes rates have two components, maintenance and operations and interest and sinking. The maintenance and operations, or M&O, which funds most of the city’s operating expenses, is proposed at $0.408114 per $100 of accessed value, while the interest and sinking portion, or I&S, which is used to repay debt, is proposed at $0.078587 per $100 of accessed value.
The proposed M&O rate is a decrease from FY 2024-25, while the I&S rate is higher. In FY 2024-25, the M&O rate was $0.410371 per $100 of assessed value while the I&S rate was $0.075540 per $100 of assessed value.
Because Highland Village is nearly built out and there is very little new revenue coming in, the city is pulling money out of its fund balance to fund expenditures for this upcoming fiscal year, Director of Marketing and Communications Laurie Mullens said. Mullens said the city will draw down the fund balance to fund the proposed expenditures. The current fund balance is 35%, with $2.6 million or 3% to be used to fund the proposed expenditures, leaving a 32% fund balance. City policy recommends a targeted range of 20%-25% fund balance, she said.
What’s next
Council will hold a public hearing Sept. 9 to receive public feedback and vote on the proposed tax rate and proposed fiscal year 2025-26 budget, according to previous reporting.
