Round Rock City Council Packet Briefing - August 26, 2025

The Round Rock City Council held a packet briefing on Tuesday, August 26, 2025, at 7:30 AM in the City Council Chambers to discuss agenda items for the upcoming August 28, 2025, council meeting. The briefing covered staff presentations on capital projects, economic development initiatives, a proposed affordable housing development, the fiscal year 2026 budget and property tax rate, and an ordinance update for hotel occupancy taxes. No public comments were made. Council members discussed each item, and staff provided clarifications. No formal votes were taken as this was a briefing session.

Consent Calendar

• Two consent items were briefly noted: (1) separating the severance agreement from the city manager's contract, and (2) a new five-year contract with Randy Kane. No questions or objections were raised.

Discussion Items

• H1 – GMP Amendment for Bob Bennett Additional Phases (Hensel Phelps): Staff presented a guaranteed maximum price (GMP) amendment of $45,446,821 for construction at the Bob Bennett site, including phase two (new two-story building, shop expansion, covered parking, tool lending center relocation) and phase five (fuel island with up to 30,000 gallons storage, three-bay wash rack, level three charging station, new drive aisle). Construction for phase two is planned to start September 2025 with completion by December 2026. Council asked about the tool lending center relocation and sources of funds (impact fees clarification).
• H2 – Business Accelerator Program (Chamber of Commerce): Staff requested a third amendment to the chamber's economic development agreement for $400,000 annually for three years ($1.2 million total) to fund a business accelerator program. The program would hire one full-time employee to run two 7-week cohorts per year (5-7 startups each) plus lunch-and-learns and quarterly meetups open to the community. Council asked about the cohort structure (industry-agnostic), the justification for the $400,000 amount (covers salary, programming, and space), and that the agreement is not a contract with the accelerator partner until approved. Several council members expressed support, noting the funding comes from sales tax, not property tax.
• H3 – Dell Inc. Enterprise Zone Nomination: Staff presented a resolution to nominate Dell Inc. for a Texas Enterprise Zone Program designation. The project involves $25 million in real and personal property improvements at 501 Delway (and other locations). If approved, Dell could receive up to $1.25 million in state sales tax refunds over five years, contingent on meeting hiring requirements (35% of new/retained jobs for economically disadvantaged, enterprise zone residents, or veterans). Council asked about the definition of economically disadvantaged, the retention vs. new job criteria, and enforcement by the state comptroller. Staff clarified the city is only facilitating the nomination; the state administers the program.
• H4 – Engineering Services for Wastewater Line Extension (HR Green): Staff requested a resolution authorizing a $316,000 contract with HR Green for design of an 18-inch gravity wastewater line from State Highway 130 east to County Road 118. This is phase one of a two-phase project to serve the northeast area. No questions.
• H5 – Supplemental Agreement for Wastewater Line on County Road 118 (Westwood Professional Services): Staff requested a $285,000 supplemental agreement for final design of a wastewater line and road improvements along County Road 118, including right-of-way acquisition and easements. No questions.
• H6 – Construction Contract for McNeil Road Right Turn Lane (Aaron Concrete): Staff requested a $453,000 contract with Aaron Concrete to add a right-turn lane from McNeil Road onto Round Rock West Drive, including sidewalk and ADA ramp improvements. No questions.
• H7, H8, I1 – Development Agreement, Resolution of No Objection, and PUD for Affordable Housing at 3000 Sunrise Road: Staff presented three items related to a proposed 220-unit affordable apartment complex (all units affordable to households earning up to 60% of area median income, e.g., $75,600 for a family of four in 2024). The developer is seeking low-income housing tax credits and requires a resolution of no objection from the city. The development agreement requires the developer to comply with city standards, pay all fees, and waive any tax abatements. The PUD would rezone the 6-acre tract from townhome (TH) to urban multifamily (MF3 base) with up to five stories, structured parking for half the required spaces, and six amenities including work-from-home spaces and social services. The Planning and Zoning Commission unanimously recommended approval on July 16, 2025. Council asked about the duration of income restrictions, access points (one full access, one exit-only), and tax payment arrangements (standard property taxes apply).
• I2/I3 – Budget and Property Tax Rate (FY 2026): Staff presented the proposed $789.7 million budget and a property tax rate of 37.2 cents per $100 valuation, a 6.9% increase (2.4 cents) over the no-new-revenue rate. The increase allocates 0.9 cents for public safety (17 new positions) and 1.5 cents for voter-approved bond programs. Staff explained four different required percentage calculations under state law (6.9% increase over no-new-revenue rate; 8.7% increase in total property tax revenues; 4.3% increase on the maintenance and operations side; 3.33% increase in nominal tax rate). The city focuses on the 6.9% figure as most transparent. Public engagement statistics: 114,000 views, 7,000 engagements, 2,600 clicks to the budget website. The mayor noted that Senate Bill 10 (reducing property tax cap to 1%) may affect future budgets but not this year.
• I4 – Hotel Occupancy Tax Ordinance Amendment: Staff presented an ordinance to align with a new online reporting and payment system launching October 1, 2025. Changes include a $35 initial registration fee and $25 annual renewal for each hotel and short-term rental property (first year fee waived for current payers). A 60-day grace period before penalties apply. The amendment also limits the 1% administrative offset to remittances under $25,000 per month. Council asked about compliance with short-term rentals; staff acknowledged some may still be unregistered but the new system will improve monitoring.

Key Outcomes

• Staff will move forward with presenting all items to the City Council for formal action at the August 28, 2025, meeting. No votes were taken during this briefing.
• For the business accelerator (H2), staff will provide a breakdown of the $400,000 annual cost to council via the city manager.
• For the affordable housing PUD (I1), staff will clarify the duration of income restrictions (likely long-term) and tax payment arrangements at the August 28 meeting.
• For the Dell enterprise zone nomination (H3), the city will submit the nomination by the state deadline next Tuesday, pending council approval on Thursday.
• The budget work session presentation will be followed by a full presentation and public hearing on the tax rate at the August 28 meeting.
• The hotel occupancy tax ordinance will become effective with the new portal on October 1, 2025.