Highland Village City Council members unanimously approved the fiscal year 2025-26 budget at a Sept. 9 meeting.

The budget totals $67.2 million, which includes expenditures for general operations, public safety and streets.

Council members also unanimously approved a tax rate of $0.500984 per $100 of assessed value, an increase from the 2024-2025 fiscal year tax rate of $0.500273 per $100 of assessed value.

"We have lowered the tax rate for the past five years due to the growth we have had," City Manager Paul Stevens said. "Had we not lowered it, it would have had to go to the voters to raise the rate. The new rate is below the voter approved rate. Because sales tax is down and property value growth has slowed, we did raise the rate to help offset that a bit."

The overview

The city is projecting $41.58 million in revenue from property tax, sales tax and other fees and grants.

The city expects to spend $26.2 million from the general fund in expenditures, which is a 5.73% increase from FY 2024-25.

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. Sales tax revenue decreased by 7.8% from fiscal year 2024-25, Stevens said.

“We have seen a slowdown like the rest of the state in sales tax revenues,” Stevens said. “We do hope there will be some changes in the economy, and maybe that will pick up again.”Zooming in

The city budgeted nearly $7.04 million for the police department, including additional Flock cameras, rifle-rated ballistic shields and an artificial intelligence program.

Highland Village will spend approximately $4.2 million on parks in FY 2025-26. From that total, $2.7 million will come from the general fund, $748,753 will come from the Corps Leased Parks Fund and $769,307 will come from the Highland Village Community Development Corporation fund.

Stevens said the budget also includes a 3% salary adjustment for all employees.

The city has also budgeted:

• $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 $0.422397 per $100 of assessed value, while the interest and sinking portion, or I&S, which is used to repay debt, is proposed at $0.078587 per $100 of assessed value. This is a slight increase compared to fiscal year 2024-25 and will increase the taxes on the average residential home, which is valued at $590,092, by $117.12, according to city documents.

What they’re saying

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.

“The next few years are going to get really tough,” Stevens said. “We were able to add some very important items to the budget this year, but future years are going to be much more difficult.”