Agenda - View Meetings (All)

Agenda No. 8.

CITY COUNCIL MEMORANDUM

City Council Meeting:

September 2, 2025

Department:

Finance

Subject:

Ordinance 25-T-033 – Conduct a Public Hearing and approve an Ordinance approving the appraisal roll; setting the tax rate; levying and assessing general and special ad valorem taxes for the use and support of the municipal government of the City of Schertz, Texas (S.Gonzalez/J.Walters)

BACKGROUND

At the August 5, 2025 Council meeting, the City Council, by record vote, established a proposed preliminary maximum tax rate of $0.5350, per $100 of value, with the M&O rate at $0.3669 and the I&S portion of $0.1681. This rate was under the Voter-Approval rate but greater than the No-New-Revenue rate. The rate was set to give council flexibility in discussion of the budget impacts of various tax rates.

On August 19, 2025, Council adopted a Budget that is funded at the rate of $0.5118 which is above the No-New-Revenue Rate but lower than the Voter-Approval Rate.

The No-New-Revenue rate is a rate calculated per state regulations that would raise the same amount of property taxes on properties that existed in the 2024 tax year while the Voter-Approval Rate is the highest rate Council can adopt without holding an election on the tax rate.

In accordance with Chapter 26.05(d) of the State’s Property Tax Code, a governing body must hold a public hearing on the tax rate if the proposed tax rate exceeds the lower of the No-New-Revenue or Voter-Approval Tax Rate. In this case, a public hearing is required as the proposed rate does exceed the No-New-Revenue rate.

During the tax rate adoption motion Council can approve a lower rate, however they will not be able to approve a rate higher than this without republishing the notices and holding additional public hearings. Due to timing constraints set by the State Tax Code 26.05(a), the latest council could set a new preliminary rate is September 2, 2025 without calling special meetings or declaring an emergency.

Per Sec 26.05(b) of the Tax Code, the tax rate can only be adopted with more than 60% of the votes in favor of the proposed tax rate if the motion would raise the tax rate higher than the No-New-Revenue rate of $0.5064. Since Schertz has 7 voting councilmembers, 5 members must vote in favor of the tax rate for it to pass.

GOAL

To adopt a tax rate in compliance with state statutes and the City Charter.

COMMUNITY BENEFIT

The programs funded by this tax rate will provide additional benefits and service levels to the community.

SUMMARY OF RECOMMENDED ACTION

Staff recommends adoption of the tax rate of $0.5118

FISCAL IMPACT

The Proposed Tax Rate of $0.5118 rate will raise more total property taxes than last year by $1,597,093, or a 5.8% increase, and of that amount, $1,205,226 is tax revenue to be raised from new property added to the tax roll this year.

Total Tax Rate

M&O Rate

I&S Rate

% Change

Proposed Rate

$0.5118

$0.3437

$0.1681

1.1%

No-New-Revenue

$0.5064

$0.3383

$0.1681

0.0%

Voter-Approval

$0.5350

$0.3669

$0.1681

5.6%

RECOMMENDATION

Staff recommends that the City Council approve Ordinance No. 25-T-033 approving the Fiscal Year 2025-26 Proposed Tax Rate.

MOTION LANGUAGE:

“I move that the property tax rate be increased by the adoption of a tax rate of $0.5118, which is effectively a 1.1% increase in the tax rate.”

Attachments

Ordinance 25-T-033 Adopting the Tax Rate

Taxpayer Impact Statement

Schertz Tax Rate Calculation 2025

City Council Tax Rate Presentation