Denton officials will vote on approving an additional $49 million for the Capital Improvement Program budget for fiscal year 2026-27. The budget was laid out during an Aug. 4 Denton City Council work session presentation given by city staff.
Council met again for a budget workshop Aug. 8 to discuss the 2023 bond issuance timeline related to the Capital Improvement Program and extending the issuance another four fiscal years to help mitigate the tax rate impact on the bond.
City Council will vote on the capital improvement budget and timeline in September.
The details
Aimee Kaslik, Denton’s chief strategic officer, said budgeting an additional $49 million in capital appropriations, or approved money usage for capital improvement projects, would go toward projects like the construction of Fire Station 10, which will be roughly $8.45 million, technology upgrades, which will cost around $8 million, and funding toward a general obligation bond worth $5.8 million to support the 2023 bond.
About $41 million of the projects being funded by debt, according to the presentation. Other resources include $3.22 million in revenue-funded projects and $5 million in impact fees.
Previously, $209.4 million was approved for capital improvements projects for FY 2026-27, Kaslik's report stated.
Zooming in
Matt Hamilton, Denton’s chief financial officer, said at the Aug. 8 budget workshop that for FY 2026-27, the current bond issuance is for just under $69.93 million. That would be reduced to the aforementioned $5.8 million with an extended timeline.
“What we have done is we’ve added an additional four years to the bond issuance timeline,” Hamilton said. “We just spread the dollars out a little more.”
The result would smooth out the tax rate impact in the long run, and Hamilton said that anything the city plans to do for the budget process in 2027 will be affected by the 2028 tax rate, which is expected to increase.
“If there were to be no extension to the bond program, that $69.9 million ... for [FY 2026-27] will hit the tax rate in 2028, and it will increase the tax rate by $0.02,” Hamilton said. “If the timeline were to stay the same, we anticipate that we would see a 2-3-cent increase over the next few years.”
Hamilton said the extended timeline will hold the interest and sinking rate, or the local property tax rate used by governments to pay off debt and interest on bonds, at $0.235 per $100 valuation through 2030.
“By pushing these out further and further, we also have to be honest with ourselves that costs will continue to go up,” council member George Ferrie said. “My worry is the more we push this out, the less far this money goes.”
Denton voters approved seven of the eight bonds from the 2023 bond package in May of that year for $291 million for citywide improvements, such as streets, affordable housing, park system improvements and drainage. Under the current timeline, there are three fiscal years left in the current bond issuance timeline.
The big picture
With the proposed CIP budget, the general obligation bonds for the 2023 bond and infrastructure improvements are expected to be a large driving force for capital projects over the next five years, according to Kaslik’s Aug. 4 presentation.
Infrastructure updates are anticipated to add about $163.89 million in capital program costs from FY 2026-27 through FY 2030-31, while the 2023 bond program will tack on roughly $134.5 million in budget costs, if approved.
Other projects over the next five years include technology improvements, faculty improvements, fleet updates, traffic and transportation updates and capital maintenance.
What’s next?
Council will have a budget workshop follow-up session Aug. 18. That will be followed by the budget and tax rate hearing Sept. 15 and the official budget and tax rate adoption Sept. 22.
The 2026-27 fiscal year will begin Oct. 1 and will run through Sept. 30, 2027.
