Denton City Council Budget Workshop and Legislative Update – August 9, 2025
Denton City Council Budget Workshop and Legislative Update – August 9, 2025
The Denton City Council convened on Saturday, August 9, 2025, from 8:32 a.m. to 12:28 p.m. for a work session covering the fiscal year 2025-26 proposed budget, a legislative update on property tax bills from the Texas 89th Legislature special session, and ethics ordinance training. Key presentations were given by Interim City Manager Christine Taylor, Legislative Consultant Logan Spence, and the City Auditor. No formal votes were taken; council members provided individual direction on budget priorities and discussed advocacy strategies for state legislation.
Budget Work Session (Item AID 242619)
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Presentation by Christine Taylor: The proposed FY 2025-26 budget assumed a 4.62% increase in sales tax revenue, a 7% growth in property tax value to $22.7 billion, and a 50% decrease in new value added ($600 million). The proposed tax rate is $0.595420 per $100 valuation, a one-cent increase on the debt service side with no change to maintenance and operations. The average homestead value rose to $386,698, resulting in an estimated $84 annual increase in the city portion of the tax bill. The budget includes a managed vacancy program projected to save $3 million, no cost-of-living or merit adjustments for non-civil service employees (public safety step increases continue), a 2% increase in health insurance contributions, and a decrease in TMRS retirement rate from 18.88% to 18.60%. A pilot four-and-a-half-day work week for administrative offices (closing at noon on Fridays) and a fire department schedule change to 48/96 (pending vote) were announced.
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Two-Minute Pitch Items and Additional Funding Considerations: Three one-time items not included in the proposed budget were presented: (1) $38,000 to roll expiring economic development incentives into the catalyst fund, (2) $70,000 for a campaign finance consultant to research and hold public meetings, and (3) $70,000 for a comprehensive site analysis and end-of-life cycle plan for the Civic Center pool. An election day holiday was deferred to next budget cycle. Also discussed was an additional $120,000 in in-kind funding for special events (raising the total from $200,000 to $320,000) and the ambassador program (recommended for $291,000 from hotel occupancy tax funds).
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Council Direction on Priorities (if funding becomes available): Council members provided varied priority orders:
- Councilmember McGee (Dist. 6): Catalyst fund, in-kind events, pool study, campaign finance (last).
- Mayor Pro Tem: Pool study, catalyst fund, campaign finance, in-kind events.
- Councilmember (Dist. 4): Pool study only.
- Councilmember (Dist. 5): Managed vacancies first, then catalyst fund, campaign finance, pool study, in-kind events.
- Councilmember (Dist. 1): In-kind events, catalyst fund, pool study, campaign finance.
- Councilmember (Dist. 2): Pool study, in-house campaign finance engagement, in-kind events, catalyst fund (last).
- Mayor: Catalyst fund; opposed to campaign finance consultant (deemed unnecessary) and pool study unless council commits to following findings; in-kind events second; expressed concern about using general fund for ambassador program and suggested property owners pay.
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Other Discussions: Councilmembers asked about managed vacancies (focus on public safety), the impact of tax-exempt properties, special revenue fund balances ($5 million in catalyst/sustainability/streets funds proposed for potential debt buy-down), and the ambassador program’s scope (some supported scaled version; others opposed due to cost and inequitable benefit to square proper).
Legislative Update (Item B: IB251201)
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Presentation by Logan Spence: The Texas 89th Legislature is in a special session (July 21 to August 19, 2025), but House quorum is broken due to Democratic walkout. Senate Bill 9, which would reduce the voter approval tax rate from 3.5% to 2.5%, passed the Senate 18-3 and could cost Denton $800,000 annually (equivalent to about 5 civil service positions). Other bills include House Bill 19, which would limit certificates of obligation and require elections for debt issuance. Spence outlined advocacy options: letters from council, meetings with legislators, testimony at hearings, engaging allied organizations, and media outreach.
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Council Discussion on Advocacy: Several councilmembers emphasized the need for in-person meetings with the local delegation (Senators Parker and Hagenbuch; House members) before bills are filed. Councilmember Jester supported all advocacy tactics. Councilmember McGee stressed ongoing face-to-face education. Mayor expressed skepticism about Denton’s credibility due to past spending and legal fees, suggesting the city is not a strong model for fiscal responsibility. Councilmember Holland advocated for concrete examples of how bills would harm local services. No formal direction was given; staff was encouraged to continue current advocacy (meetings, registering opposition) and explore additional engagement at council’s discretion.
Ethics Ordinance Training
- Presentation by City Auditor: Overview of the city’s ethics code, including mandates (disclosure of business relationships, financial disclosure, reporting violations) and prohibitions: conflicts of interest (defined as personal/financial considerations influencing official action), gift restrictions (no single gift over $50 or aggregate over $200 from one source annually), misuse of influence or confidential information, abuse of city resources, and discrimination/harassment. The complaint process involves four phases: initiation (with sworn complaint), preliminary assessment (panel of three Board of Ethics members), evidentiary hearing, and possible sanctions (verbal warning to public censure). Councilmembers may request advisory opinions from the Board of Ethics, which serve as an affirmative defense. Questions were clarified on the $200 gift threshold, travel exceptions, and the handling of mixed complaints.
Other Updates
- At the meeting’s conclusion, the city manager reported a shooting at LSA Bar downtown; CPR was in progress and the suspect was detained, with police investigating as self-defense. The area was advised to be avoided. Council was informed that answers to outstanding budget questions would be provided in the Friday report and discussed at the next session on August 19, 2025.
Key Outcomes
- No votes were taken; council members provided individual priority orders for potential additional budget funding (pool study, catalyst fund, in-kind events, campaign finance consultant).
- On legislative advocacy, no formal direction was given; staff will continue current activities and consider in-person meetings with delegation as recommended by some councilmembers.
- Ethics training was delivered; no actions required.
- The budget process will continue with a public feedback platform launch and next scheduled work session on August 19, 2025, to discuss rates, fees, and enterprise funds, with intent to set the tax rate.
Meeting Transcript
Today is Saturday, August 9th, 2025. It is 8:32 a.m. So I'll call the meeting to order. First thing on the agenda work session reports item AID 242619 superport discussion and give staff direction regarding the fiscal year 2025-26 City Manager proposed budget capital improvement program and five-year financial forecasts. Good morning. Good morning, Mayor and Council. Christine Taylor's louder. Oh, there's music play. You can keep going. We can hear okay. Hold on. If you'll just pull that background slide down then. Okay, sorry. We are all happy that you're here this morning on a Saturday to go over the city manager's proposed budget. The budget is a very important financial plan and policy tool. As you can tell from the well-attended meeting by our team, a lot of work has gone into this budget. Every director, every department, the budget team, and I just want to give a special thanks to the budget team led by Matt Hamilton and Seth Harrell. They have done a lot of work pulling this together so we can be here today. So for our agenda today, we're going to briefly go through our budget process and structure, go through our assumptions for the general fund, talk about our tax rate. We have some general fund assumptions to go through, some operating decisions for the general fund budget, and then we'll move into our internal service funds, go over our special revenue funds, briefly cover the capital budget, and then talk about the next steps on the way to budget adoption in September. So this slide briefly covers what our budget process looks like. It is a year-round process. When our fiscal year begins in October, people are spending, we are closing out the prior year, and then before you know it, we are kicking off for the next next budget year again in January. Our budget is worked on by our department directors, looking at revenues, their operating budgets in the early spring, and then we begin the process of having the conversations with council through the summer to submitting that proposed budget to you all on July 31st, having our budget workshop, setting the tax rate, adopting the budget, and then doing it all over again, starting on Offical Mund. So this year was filled with a couple challenges. So we changed our methodology and strategy going in 2025, uh 2425, and then looking at 2526. When our department started their budget process this year, we started with a zero-based budgeting methodology, meaning that all budget all spending was justified from a zero base, regardless of past allocations. This uh process actually ended us up with some higher expenses as we right-sized overtime, looked at where spending maybe need to be reallocated. And then on top of the zero-based budgeting, we did we asked key questions of our departments to look at their programs and the services they're providing. These questions were are we duplicating any efforts or resources? Are there activities we should no longer be doing? And where can we improve our existing services? In addition, as we were in the current fiscal year and started to see uh that we were going to have a forecasted gap in our current year budget, we implemented a managed vacancy program, meaning we were freezing existing vacant positions, focusing on data, and focusing on our frontline and our public safety positions. This managed vacancy uh resulted in about three million dollars in salary savings in the current year, and we have the same projection moving into next year, meaning that program was successful, and we'll continue to do it in the next fiscal year. In addition, one additional strategy that we utilized that was new is we implemented a budget task force. This was compiled of a uh cross-disciplined team throughout the city who took a look at all the recommended reductions. Uh, was able to give a different lens perspective on what are we doing, what makes the most sense, and a really unified together on the recommendation recommendations you're seeing went through a really uh good look from that budget task force. So, with all of that, what we hoped to achieve through that strategy methodology was improved financial health in the city, enhance strategic alignment, and increased transparency and accountability with how we are reporting. Uh this slide is a quick overview on our budget structure. We utilize a fund accounting, and that's help explains how you see the budget in the formats that you do. Our budget is structured and guided by governmental accounting principles, and our goals to demonstrate compliance with legal and regulatory restrictions. So the major funds that you'll see today are we have the general fund, our other major funds include debt service, our utility funds. Today we'll discuss our special revenue funds that are dedicated for a special purpose, such as catalyst sustainability streets. And then we have our internal service funds that support the operations of the city, including technology services, fleet, our health insurance fund, our customer service, and environmental services. So going into next year, here are the financial assumptions that you'll see as part of the forecast. We are estimating for 2526 a 4.62% increase over the prior year over our estimated 2425 growth. And then beyond in the forecast, we're doing a 5% growth for the out years. For our property tax, our total certified praised value this year was $22.7 billion. This does represent a 7% growth over the prior year. And a component of that, our new value added added $600 million, which was a 50% decrease from the prior year.
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