Title
Consider and take action on Ordinance 2025-31 adopting the Annual Budget for Governmental and Proprietary Funds for Fiscal Year 2026 – Second Reading (Assistant City Manager - CFO)
Council approved 7-1-0 on August 26, 2025.
Taxpayer Impact Statement Required per H.B. 1522 effective September 1, 2025
2024 Adopted Tax Rate $0.369 with average homestead taxable value of $351,138 equals tax of $1,295.70
2025 No-New-Revenue Tax Rate $0.36355 with average homestead taxable value of $362,634 equals tax of $1,318.36
2025 Proposed Tax Rate $0.36355 with average homestead taxable value of $362,634 equals tax of $1,318.36
Background:
Pursuant to City Charter and state law, adoption of this ordinance will establish the budget for the 2026 fiscal year. The budget ordinance is based on the proposed budget, as adjusted, and as described in Exhibit A, B and C.
The FY2026 Proposed Budget provided to City Council on July 15, 2025, included $195,474,604 for operations. Changes were made during the series of workshops in July and August.
City Council held a first reading of the budget ordinance on August 26, 2025. The proposed ordinance estimates property tax revenue at the no-new-revenue tax rate of $0.36355 with a total operating budget of $194,511,462.
Changes to the Proposed Operating Budget
City Council held a series of work sessions on July 22nd, August 12th, and 26th. A Public Hearing was held on August 26th. As a result of these discussions, the first reading of the FY2026 budget was adjusted. The operating budget appropriation for the first reading of $194,511,462 is $963,142 less than the July 15th proposed budget of $195,474,604.
Changes Discussed at August 12 Workshop
Exhibit A to the ordinance outlines the operation budget which includes:
General Fund – decrease of $2 million
- Removal of contract internal audit services ($40,000)
- Removal of Historic District Survey update ($25,000)
- Removal of the HR Employee Leave & Claims Coordinator ($86,531)
- Addition of contracted FMLA, ADA, personal leave & Disability management $23,400
- Move 3 Police Captain vehicles to Asset Forfeiture fund ($165,000)
- Reduction in property & windstorm insurances ($200,000)
- Reduction in transfer to CIP ($1,175,000)
- Reduction in transfer to Fleet department ($235,411)
- The following new positions will have a January 1 start date:
- Recreation Specialist ($7,317)
- Planning Administrative Assistant ($19,406)
- Part-time EMS Quartermaster ($6,929)
- Deputy Fire Marshal ($31,506)
- Cybersecurity & Network Engineer ($31,300)
General Fund Subtotal ($2,000,000)
Asset Forfeiture Fund – increase of $165,000
- Move 3 Police Captain vehicles from General Fund $165,000
Operating Budget Subtotal ($1,835,000)
Exhibit B to the ordinance outlines the capital budget which includes:
Removal of project DR6 – West Side Master Plan ($175,000)
8/12 Workshop Total ($2,010,000)
Other Adjustments After Workshop
General Fund – increase of $78,908
- Grant funded Rapid Response Medical UTV moved
from Volunteer Fire Department Fire Donation fund $78,908
Utility Fund – increase of $816,373
- Move GCWA debt payment for WT1502 City of Houston
water line replacement from Utility Debt Service Fund $816,373
Volunteer Fire Department Donation Fund – decrease of $23,423
- Reduction of Rapid Medical Response UTV ($23,423)
Changes After Workshop Total $871,858
The second reading of the budget ordinance remains the same due to no changes during the first reading.
The property tax rate required to fund the proposed operating budget is $0.36355 per $100 valuation, which is the no-new-revenue rate proposed by Council on August 12, 2025.
CITYWIDE
Exhibit A Operating Budget Exhibit B Capital Budget Total
FY2026 Proposed Budget 195,474,604 329,728,766 $525,203,370
8/12/25 Workshop Changes (1,835,000) (175,000) ($2,010,000)
Other Adjustments 871,858 - $871,858
FY2026 Budget 1st Reading 194,511,462 329,553,766 $524,065,228
First Reading Adjustments 8/26/25 - - $ -
FY2026 Adopted Budget 194,511,462 329,553,766 $524,065,228
Deadline to approve the FY2026 Budget
Charter requires the budget to be approved by at least ten (10) days before the beginning of the fiscal year, which is September 20th.
Required per H.B. 1522 effective September 1, 2025
2024 Tax
Year 2025 Tax Year•
Adopted No-New- Proposed Change
Tax Rate Revenue Tax Rate
Tax Rate
Total tax rate
(per $100 of value) 0.36900 0.36355 0.36355 decrease of -0.005450 per $100, or -1.48%
Average homestead
taxable value $351,138 $362,634 $362,634 increase of 3.27%
Tax on average
homestead $1,295.70 $1,318.36 $1,318.36 increase of 22.66, or 1.75%
Attachments:
1. Ordinance 2025-31 with Exhibits A, B and C
FUNDING
{X} NOT APPLICABLE
STRATEGIC PLANNING
{X} NOT APPLICABLE