Tomball Development News

City Council Reviews Q1 Financials, Discusses Budget Assumptions and Tax Rate

The City Council received a quarterly financial report for the period ending March 31, 2026, and a pre-budget workshop was conducted. The financial report detailed sales tax revenue, which has increased by $140,000 and is projected to exceed the budget. Property tax collection is at 104% of the current year's budget before TURF funds are accounted for. Expense reports showed 43.9% of the general fund budget and 39.4% of the enterprise fund budget expended year-to-date. Challenges with a new payroll system delaying postings were noted. The investment report through March showed a decrease in the investment pool balance due to spending on capital projects. Major upcoming capital projects include the south wastewater treatment plant, gravity line, water supply on Baker, and the East plant on Lizzy Lane. The pre-budget workshop outlined assumptions for the upcoming budget, including a 1% growth in sales tax and a 6% ad valorem growth rate. Utility rate plans for water and wastewater will continue, with anticipated increases for residential (9.2%) and commercial (11.7%) water and sewer usage, while gas rates remain fixed. Solid waste contract increases are programmed at 5% annually. Remaining bond issuance for capital projects is $33 million. The budget includes requests for seven new full-time positions, a 3% cost of living adjustment, a 2% merit program increase, and a projected 16% increase for major medical expenses. The FY27 budget anticipates $1 million for fleet replacement and $2.5 million in supplementals. The city's property tax rate remains one of the lowest in the Houston area. The fleet replacement fund, established in 2018, is self-sufficient, and the health insurance trust fund helps absorb major medical costs for employees. The debt service fund will see a $33 million issuance in FY27 to complete major projects, with efforts to mitigate the tax rate through growth assumptions and enterprise fund contributions. The city aims to maintain a balanced tax rate between operations and maintenance (O&M) and debt service.