McKinney city officials are proposing an $888 million budget for the upcoming fiscal year, with a general fund budget of $219.4 million and a roughly $0.01 decrease in the property tax rate.

The gist

McKinney City Manager Paul Grimes and city staff members presented budget highlights to City Council members at an Aug. 9 work session.

The proposed budget includes a lower tax rate, increased water and wastewater rates, and wage increases for public safety and government employees. Public input opportunities are planned for the coming weeks prior to a Sept. 3 meeting when McKinney City Council members are expected to call a vote on the proposed budget and tax rate.

“We remain dedicated to providing essential services and investing in our community's future,” Grimes said in a statement included with the budget documents. “We're confident that the proposed budget will enable us to achieve our shared goals."

The specifics

If adopted, the proposed budget includes the lowest property tax rate in recent years, according to the city’s website. The budget includes a proposed tax rate of $0.415513 per $100 valuation, which is a $0.012 decrease from the previous year. The proposed tax rate consists of two parts, including:

• The maintenance and operations, or M&O, rate, which is proposed to be $0.278935 per $100 valuation
• The interest and sinking, or I&S, rate, which pays for the city’s principal and interest on its debts, and is proposed to be is $0.136578 per $100 valuation

The lowered proposed tax rate is the result of tax base growth, including $1.5 billion in new construction and an 6.2% increase in values for existing properties, according to city documents. The city’s estimated taxable value is expected to increase from $35.9 billion in FY 2023-24 to $39.7 billion in FY 2024-25.

Despite the proposed lower tax rate, the city is expected to raise 7.04% more in total property taxes than the previous year’s budget, totaling about $10.8 million, according to city documents. Of that amount, $6.4 million is expected to be derived from revenue for property added to the tax roll this year, the document states.

“As our values go up, from an assessed value perspective, the corresponding impact to the tax rate is generally that the tax rate goes down,” Director of Strategic Services Trevor Minyard said.

If the rate is adopted, the average tax levy for a McKinney resident will be $2,137, based on an average market value of $574,579 and an average taxable value of $514,460, according to the presentation.

Diving deeper

The budget includes expected revenue of $219.4 million and expected expenditures in the same amount, according to city documents. Below are a few funding requests and line items being considered in the proposed budget for fiscal year 2024-25.

Wage increases for city employees: The budget includes an allotment to fund step wage increases for city employees, including $1.9 million for an increase for public safety employees and $1.6 million for increases for general government employees, according to the presentation.

Additional city personnel: The proposed budget includes nearly 1,600 authorized city and public safety personnel roles. The budget includes a proposed increase of 50 positions, according to city documents. Some of the new positions proposed in the budget include:

• One accountant
• Six first responders
• Two forensic investigators
• Two detectives
• Eight firefighters
• Two public service officers
• Two code compliance officers

Planned projects: The proposed budget allocates funding for some capital improvement projects, the presentation states, including:

• $17.3 million for city facility expansions and renovations
• $9.7 million for projects at Erwin Park and parks facilities in the Towne Lake District
• $9 million for infrastructure improvements on Tennessee and Lamar streets
• $147.65 million for utility relocations as part of the US 380 bypass project, which is derived from Collin County grant funding
• $4 million for lanes 1 and 2 of Bloomdale Road between Custer Road and Ridge Road

Water and wastewater rates: The city will see increased costs for water and wastewater services from the North Texas Municipal Water District in the coming year, city documents state. As a result, the budget proposes a 9% increase in wastewater service rates and a 2% increase in water service rates.

What else?

Council members did not make a decision on if they will dedicate funding toward a recent grant request they received from the McKinney Education Foundation.

Representatives of MEF requested $500,000 to support three new revenue-generating roles at a June 18 meeting, of which $250,000 was proposed to be granted during the upcoming fiscal year. Grimes said if funding the request was granted, it would either include impacting the tax rate, which would result in a roughly $0.001 increase in the proposed rate, or redirect funds from another expenditure.

McKinney Mayor George Fuller asked city staff to present the item during council’s next work session meeting, which is scheduled for Aug. 20, for further discussion and potential action on the request.

“It probably will not be an increase in the tax rate, which is why I think we can continue to move forward now,” Fuller said of the choice to consider the request at a later date.

Stay tuned

A citizen input meeting for the proposed budget is planned to be held Aug. 20, according to the presentation.

An additional public hearing opportunity for comments on the budget and tax rate will be held Sept. 3 at McKinney City Hall. City Council members are expected to vote on adopting the budget and tax rate at the Sept. 3 meeting.

For more information on the proposed budget, visit www.mckinneytexas.org/210/budget.