Officials at an Aug. 4 meeting discussed the city’s new fiscal year 2025-26 budget and set the maximum tax rate the city can work with ahead of approvals in the coming months.
Long story short
The city set that rate at $0.58 per $100 valuation of a home, which is up from the no-new-revenue rate of $0.539339, documents show. The approval means the city is allowed to approve a lower rate but cannot set a higher one at a later date.
However, Mayor Dan Davis on Aug. 7 said city staff is expecting the council to ultimately approve a tax rate of $0.56, which would keep the tax rate flat compared to last year.
That rate, if approved at a future date, will mean a total annual tax bill of $1,680 for a home valued at $300,000, officials said.
The preliminary total budget projects a balanced budget, with total revenues and expenses sitting at $17.4 million, documents show. This compares to a total budget in FY 2024-25 of $15.79 million.
However, those totals do not include many key items. City staff, for example, identified 40 new positions—totaling $3 million—that were needed to maintain the same level of city services as the current year. The current budget includes none of those new positions.
In another area, out of 43 additional requests, such as equipment, three are included. The remaining 40 requests would cost $3.5 million, documents show.
Diving in deeper
Council member David Lands noted that last year, when the tax rate was also at $0.56 per $100 valuation, city staff was able to add several new staff members; a 5% cost-of-living adjustment, or COLA, for staff; 17 supplemental requests totaling $1.6 million; and a new homestead exemption.
City Manager Dan Johnson said new expenses, such as the new police facility, water treatment plant and the payroll, which includes 114 employees, add up.
“Something happened,” Lands said. “I’m basically having a panic attack right now. We did all that last year at $0.56, and we can’t do anything this year.”
Some highlights in the preliminary budget, according to city documents, include:
- The city’s overall net taxable value went up from $2.1 billion to $2.3 billion.
- 1,000 new properties were added to the tax rolls.
- 3% COLA for all full-time employees
Officials said every additional penny added to the tax rate provides an additional $185,000 in revenue for the city.
The options
Part of the discussion Aug. 4 was how to find more revenue. Davis said Aug. 7 that lowering the fund balance and having the Manvel Economic Development Corporation cover a $400,000 payment for the city’s new water reclamation facility could free up around $1.5 million.
“I’m just looking at a couple of ways we can find funds without having to increase taxes,” council member Keith Bonner said at the meeting.
Quote of note
Davis highlighted the difficulty of the budget cycle but highlighted some of the developments the city has had recently, such as opening up its new police station.
“It’s difficult times. It’s tough times. It’s not for the faint of heart,” Davis said. “It’s tough. ... [The budget] weighed heavily on my heart. ... When I was struggling with sleepless nights over this weekend about this budget, I did take time to reflect on how far we’ve come.”
Also on the agenda
The council voted to postpone a vote on a potential utility rate increase, as members were looking for more information before voting.
Documents show the rate for water and wastewater in the city would increase by 11.2%. Prior to going into effect, it would need approval at two separate meetings.
The preliminary budget includes this increase as an assumption, according to city documents.
Looking ahead
The city will hold a budget town hall Aug. 20, Davis said. Following that, a public hearing and initial approvals, the final approval of the budget could come either Sept. 15 or Sept. 18.
