Council received the town manager’s proposed budget during an Aug. 21 work session.
Breaking down the budget
Within the town’s budget, the general fund has a surplus of $38,509, including projected revenues of around $97.26 million and $97.22 million in expenditures. The general fund helps pay for staff, materials and contractual services, according to town documents.
The budget also includes a 3% merit increase for all employees, Director of Budget Services Meg Jakubik said. Town Manager James Childers said the entire budget included $4.4 million in non-discretionary increases, which included the raises, but the general fund only accounts for $12,800 of that amount.
The overall budget projects nearly $348.2 million in revenue and around $452.48 million in expenditures. Chief Financial Officer John Zagurski said town staff bake in the maximum potential cost for capital outlay, which includes projects from the $112 million bond, so that a council is authorized to spend the full amount in a fiscal year.
Other components of the budget include:
- $63.1 million budgeted for the utility fund
- $10.27 million for the debt service fund
- $1.68 million for the stormwater utility fund
Flower Mound residents can expect their utility bills to increase later this year, based on proposed water, sewer and stormwater rates.
Chris Ekrut, chief financial officer at NewGen Strategies and Solutions, the firm who analyzed the town’s utility rates, said there is a proposed increase of 5.25% for water and sewer bills. Based on the increase, which takes the average monthly water usage of 15,000 gallons and 8,000 gallons of sewer, a customer who currently pays $174.43 monthly will pay $183.53 per month after the new rates take effect in October.
Ekrut added that he recommends town officials examine different rate increases for water and sewer in future fiscal years because going forward sewer costs are expected to rise faster than water costs.
Additionally, the town’s stormwater fee will increase to $6.50 per month for residential customers. Ekrut said the town will shift how it bills non-residential customers by taking the $6.50 fee and multiplying it by the amount of impervious area’s equivalent residential unit, which is set at 5,285 square feet.
Zooming in
Additionally, the budget includes the town’s capital improvement plan, which includes a 5-year outlook on infrastructure projects, such as streets and parks and recreation, Jakubik said. The FY 2025-26 capital improvement plan budget totals more than $175.5 million, per town documents.
David Crown, Flower Mound’s assistant director of public works, capital improvement plan, said there are five street reconstruction projects and five traffic signal projects included in the FY 2025-26 plan.
Diving deeper
The budget is based on a tax rate of $0.387277 per $100 of assessed value, which is a decrease from the current tax rate of $0.387278 per $100 of assessed value.
The maintenance and operations component of the rate, which helps cover general town expenses, is $0.334294 per $100 of assessed value. The interest and sinking portion, used to help repay debt, is $0.052983 per $100 of assessed value.
What they’re saying
Childers said some of the main challenges with the proposed budget were maintaining current service levels and compensating staff in line with town policy, while also dealing with stagnant sales tax and declining property tax revenues.
“In order to accomplish what we set forth to accomplish, the flexibility I had to accomplish those things shrunk by the day and the week,” Childers said. “It wasn’t until we got a true sense of the impact of what the tax base was doing until the end of July. We worked very hard in the process to bridge that gap in order to achieve a balanced budget.”
Zagurski added that stagnant sales tax revenues year-over-year was a first in 28 years of data from the town he examined.
“My outlook from [July 1] to the end of July rapidly changed because we saw things change that had never happened before in the history of the town,” Zagurski said.
In future fiscal years, to maintain expected service levels, Childers said town staff may have to call for a voter-approval tax rate election, VATRE. No VATRE will be called for the FY 2025-26 budget, but if it is considered in future fiscal years, town staff will develop two budgets, he added.
It also means town staff have to present budgetary data earlier in the budget cycle, Childers said.
Going forward
A public hearing on the proposed tax rate and budget is scheduled for Sept. 15. Leading into the public hearing, town staff will work to make some minor tweaks to the budget, Zagurski said.
The tax rate and budget are expected to be adopted at the Sept. 15 meeting.
