Richardson officials are on track to approve a proposed $432 million city budget with no property tax rate increase for fiscal year 2026-27.
The proposal includes compensation increases for city employees, a new water and wastewater rate plan and added investments in public safety, infrastructure and economic development. City Council also approved a proposed debt rate on Aug. 17.
The overview
City Manager Don Magner said this is the largest budget the city has ever adopted. Magner filed the proposed budget on Aug. 14 after presenting initial proposals to City Council in a two-day budget workshop.
The total $432 million operating budget is about $13.7 million more than the budget for fiscal year 2025-26, an increase of roughly 3.3%.
The city budget includes the general fund, which covers the city’s operating expenses and most city services, as well as budgets for water and sewer, solid waste services, golf and hotel/motel tax funds. Additional components include Richardson's debt service, internal service and restricted purpose funds.
Over two-thirds of the city’s proposed $190 million general fund budget will fund personnel expenses, which Magner said has been a priority for every budget he has developed in Richardson.
What’s new
Council unanimously approved a $0.21779 debt rate per $100 valuation on Aug. 17.
This debt rate is roughly one cent higher than the minimum debt rate necessary to pay off the city’s current debt obligations, which requires specific approval by council.
Magner said the proposed debt rate would put the city ahead of schedule on its bond payments and save the city roughly $557,000 in future interest payments. This would also provide a higher debt capacity for future bond programs, he said.
What you need to know
Magner recommended that the city maintain the current tax rate of $0.54218 per $100 of assessed valuation. This tax rate has been in place since fiscal year 2024-25.
The average homestead taxable value increased by 3.16%, so even though the tax rate is remaining the same, residents will see an average increase of $70 on their property tax bill.
The budget also includes a new rate plan for water and wastewater charges, which will increase customers’ monthly volume rate and base charge. In FY 2026-27, residents will see a 4% water rate increase and a 12% sewer rate increase.
The city will also implement a meter equivalency plan to adjust the monthly base charge, which will now be determined by each customer’s meter size. Larger, nonresidential meters will see higher base charge increases than smaller residential meters.
Magner said the need for the increases is driven by critical water and wastewater infrastructure needs in the city as well as the rising cost of wholesale water from the North Texas Municipal Water District, which the city buys its water from.
Residents can also expect to see a $1 increase in their monthly drainage fee due to increased expenses for drainage and erosion control projects, as well as an increase of $1 plus tax to the monthly solid waste rate. This increase is driven by compensation increases and rising disposal costs for the city, Magner said.
What’s next
Council called a public hearing on the tax rate for Sept. 14 and a public hearing on the budget for Sept. 21. Council will vote on adopting the budget and property tax rate on Sept. 21.
