Tomball officials are starting to shape the city’s fiscal year 2026-27 budget, with early discussions pointing to utility rate increases, employee compensation needs and a possible $33 million bond issue for water and wastewater projects.
What we know
During a June 15 meeting, city staff walked Tomball City Council through the city’s current financial picture and early considerations for the next budget year.
For the current fiscal year, the city’s general fund is projected to end stronger than budgeted, according to the presentation. Staff said general fund revenue is projected to come in about $1.08 million over budget, while expenditures are projected to come in about $137,710 under budget.
The general fund—the city’s largest operating fund—is primarily supported by sales tax, which makes up about 45% of the fund, and property taxes, which make up about 17%, according to the presentation. The fund is also the least restrictive, but it is heavily affected by personnel costs.
As officials look ahead to FY 2026-27, staff said sales tax revenue is projected to stay mostly stable, with 1% growth. Property tax value growth is projected at 6%, while development-related revenue is expected to remain stable.
On the spending side, early considerations include seven full-time equivalent positions or reclassifications, a cost-of-living adjustment and merit program equal to about 7% of personnel base pay costs, and a possible market study adjustment estimated at about 2% of personnel base pay costs. Staff said preliminary findings from the city’s compensation and benefits study are expected in early July.
A closer look
Other major cost drivers include a projected 16% increase in major medical costs, about $1.04 million for fleet replacement and $2.49 million in supplemental requests. Of the supplemental requests, about $472,570 is tied to personnel costs, while about $2.02 million is for nonpersonnel costs, according to the presentation.
Residents could also see rate changes tied to already adopted utility plans. Staff said the FY 2026-27 budget is expected to continue the city’s adopted water and wastewater rate plan, approved in April 2024, and its solid waste contract rate plan, approved in May 2024.
For FY 2026-27, the presentation showed a 9.2% annual increase for residential water and wastewater rates, an 11.7% increase for commercial water and wastewater rates, no increase for gas, and a 5% increase for solid waste.
Under the city’s solid waste rate plan, the residential base bag service is set to rise from $24.98 in FY 2025-26 to $26.03 in FY 2026-27. The cost for a 65- or 95-gallon cart would rise from $1.84 to $1.93 per cart, while an 18-gallon recycle bin would increase from $1.05 to $1.10. The contract caps annual increases at no more than 5%, according to the presentation.
Before you go
Staff also discussed a possible $33 million bond issue for water and wastewater projects. The presentation noted the city plans to mitigate the tax rate with no effect.
For the current tax year, the city’s total property tax rate is $0.34094 per $100 valuation. Staff noted the maintenance and operations portion is subject to the state’s 3.5% cap on existing properties, while the debt service portion is driven by property-tax-supported debt and is not subject to that cap.
The city’s taxable value is projected at about $3.79 billion for FY 2025-26, an around 8% increase from about $3.52 billion in FY 2024-25, according to the presentation.
The June 15 workshop was part of the city’s budget process, which began in March with department training and calendar development. Staff is expected to continue budget team meetings, present the proposed budget and hold council budget workshops in July, before finalizing the budget, setting rates and holding public hearings in August. The fiscal year begins in October.
