City Manager Files Proposed Budget for Fiscal Year 2026-2027

Richardson City Manager Don Magner today filed the proposed Fiscal Year 2026-2027 budget, outlining a multi-year strategy designed to protect essential services, strengthen the City workforce, and continue investments in public safety, infrastructure, and economic development.

The proposed operating budget totals approximately $432 million, which includes the General Fund, Water and Sewer Fund, Solid Waste Services Fund, Golf Fund, Hotel/Motel Tax Fund, as well as the City's Debt Service, Internal Service, and Restricted Purpose Funds. The approximately $190 million General Fund supports most City operations and services.

The proposal maintains the current property tax rate of $0.54218 per $100 of assessed valuation and continues the $160,000 senior property tax exemption. It also includes employee compensation adjustments, added public safety investments, a new water and wastewater rate structure, and continued implementation of voter-approved bond projects.

"This proposed budget protects the programs and services our residents and businesses rely on while making targeted investments in the people and infrastructure that support them," Magner said. "It maintains the current property tax rate, strengthens employee recruitment and retention strategies, enhances public safety, and advances critical infrastructure needs. At the same time, we are making difficult adjustments and taking a disciplined, multi-year approach to preserve Richardson's long-term financial strength."

Impact on Typical Taxpayer
Although the proposed property tax rate would remain unchanged, the average taxable value of a Richardson homestead increased from $411,065 to $424,062. As a result, the City portion of the property tax bill for the typical homeowner is projected to increase by approximately $70 annually.

When property taxes and proposed utility and service-rate adjustments are combined, the estimated annual cost for a typical Richardson household would increase from $4,422 to $4,652, an increase of $230, or 5.2 percent. Actual impacts will vary based on taxable property value, meter size, water use and customer classification.

The utility estimate assumes a typical residential customer has a three-quarter-inch meter and uses 8,000 gallons of water per month from October through May and 18,000 gallons per month from June through September. Wastewater charges are based on 98 percent of average water use. Utility increases would first appear on bills with November due dates.

Strategic Priorities
Investing in Employees

The proposed budget includes approximately $5.7 million in pay-plan adjustments intended to improve the City's ability to recruit and retain employees in a highly competitive North Texas labor market.

The proposal includes:

• Up to a 3.5 percent merit-based market adjustment for general government employees and permanent part-time employees;
• Up to a 5.5 percent merit-based market adjustment for sworn police and fire personnel;
• Continued funding for eligible public safety step increases;
• An increase in the minimum hourly starting rate for full-time and permanent part-time positions from $21 to $22.31; and
• Additional City support for the employee health insurance program.

The City currently has a 9.6 percent vacancy rate and averages approximately 95 vacant full-time positions. Public safety staffing remains a particular concern, including vacancy rates of approximately 20 percent among police dispatchers and 7.3 percent among police officers.

Public Safety
Approximately 40 percent of the proposed General Fund budget, $79.7 million, is dedicated to public safety, an increase of $5.7 million from the current fiscal year.

Proposed investments include:

• Four additional Fire Department positions;
• Replacement of essential police, fire and emergency-response vehicles and equipment;
• Restructured certification pay for emergency dispatchers and sworn personnel;
• Public Safety employee physical- and mental-health programs; and
• Continued funding for Public Safety related community engagement initiatives.

Infrastructure and Mobility
The proposed budget includes $19.9 million in infrastructure and mobility funding. Combined General Fund, Dallas Area Rapid Transit General Mobility Program and 2026 Bond Program resources would provide approximately $12.5 million for street improvements during the fiscal year, about $5 million more than the current year.

The budget also increases annual General Fund support for both parks and facilities maintenance to $750,000 and provides nearly $4 million for pay-as-you-go vehicle and equipment replacements, along with approximately $1.7 million for information technology replacements.

Capital and debt planning would begin implementation of projects approved by voters in the 2026 Bond Election, with $36.9 million anticipated during the first year of the program. Water and wastewater plans also include $15.9 million in debt-funded capital projects.

Water and Wastewater Rate Plan
The proposed budget includes the first year of a five-year water and wastewater rate plan intended to support aging infrastructure replacement, rising operating expenses, and increasing wholesale costs from the North Texas Municipal Water District.

For Fiscal Year 2026-2027, the plan includes:

• A 4 percent increase in water volume rates;
• A 12 percent increase in wastewater volume rates; and
• The first phase of a meter-equivalency model that bases monthly fixed charges on meter size and potential demand on the system.

Approximately 95 percent of residential customers have a three-quarter-inch meter. The monthly water and wastewater base charges for those customers would each increase from $8 to $9.60 during the first year. The current base charge has not changed since 2012.

Qualified customers age 65 and older with standard three-quarter-inch or one-inch residential meters would continue paying the current $8 monthly base charge for water and wastewater. Customers already receiving the senior solid waste discount would be automatically enrolled; other eligible customers may apply through the Water Customer Service Department.

Other Service Adjustments
The proposal also includes:

• A $1 monthly increase in the residential drainage fee to support drainage and erosion-control projects; and
• A $1 monthly increase, plus tax, in the residential solid waste rate to address employee compensation and rising disposal costs.

Operational Adjustments and Long-Term Planning
The proposed budget was developed using conservative revenue forecasts and a multi-year planning approach because many revenue and expenditure factors remain uncertain. Inflation continues to affect fuel, utilities, equipment, contracts, construction and employee compensation, while potential state legislative changes could further restrict municipal revenue and spending flexibility.

To balance recurring revenues and expenses while maintaining service levels, the proposal includes the permanent elimination of 19 positions that have been vacant and frozen for several years, operational efficiencies identified by City departments, and reductions to the Wildflower! Arts & Music Festival. Five General Fund positions would be added, including four Fire Department positions and one custodial position supporting the new Library.

The budget also increases the annual transfer to the Economic Development Fund by $750,000, bringing the total to $2.8 million, and continues funding for neighborhood programs, citizen academies, community partners and culturally diverse events.

Public Input and Adoption
The City Council held budget workshops Aug. 3 and 4 to review the proposed Fiscal Year 2026-2027 budget and provide opportunities for public input. Recordings of both meetings, along with budget materials, are available at www.cor.net/departments/budget/2026-2027.

The proposed budget will be formally presented to the City Council on Monday, Aug. 17. Public hearings on the proposed budget and tax rate are scheduled for Sept. 14 and Sept. 21.

The City Council is scheduled to consider adopting the budget and property tax rate Sept. 21. The new fiscal year begins Oct. 1.

Residents are encouraged to review the proposed budget, watch the workshop discussions and participate in the upcoming public hearing process.

www.cor.net/Budget