By Mary Ellen Leonard, Director of Fiscal Services
The City of College Station’s proposed Fiscal Year 2026 budget, presented to the City Council in a special meeting on Monday, outlines the City’s plans for continuing to deliver high-quality public services, especially in public safety, while investing in vital infrastructure and addressing community needs.
The proposed $474.2 million budget allocates $390.1 million for operations and maintenance and $84.1 million for capital improvements. Together, these figures reflect the City’s commitment to meeting the everyday requirements of residents and preparing for the growth and infrastructure challenges that lie ahead.
Strategic Direction
The FY 26 budget is built around fiscal responsibility, sustainability, and community-focused planning, an approach shaped by evolving federal and state legislation that impacts funding and compliance. Other significant factors include a slowdown in Texas A&M’s growth, shifts in consumer confidence, and a greater spirit of cooperation with the University regarding public safety.
Additionally, moderate regional development continues to shape service demand in areas such as water, infrastructure, and quality-of-life amenities.
To help manage these dynamic factors, the City uses a robust five-year financial forecasting model to assess the long-term impacts of new investments, changes in recurring costs, and potential revenue fluctuations. The General Fund balance is closely monitored to ensure long-term stability and preparedness for unexpected events.
The 5-year budget process ensures that we plan smartly, not just for FY26, but for years to come.
City Revenue
As a responsible steward of your tax dollars, College Station’s tax rate remains among the lowest in Texas. But we all recognize that your tax bill is determined by your taxable property value as much as the tax rate.
A noteworthy highlight of the proposed budget is a substantial 5% reduction in the property tax rate, which offsets the 4.5% rise in residential property valuations. The proposed rate of $0.487430 per $100 of assessed value is more than 2.5 cents less than the current rate.
The City’s tax revenue is still expected to increase by about $5.7 million, thanks to new construction and a significant rise in market value assessments for multifamily properties (31%) and commercial properties (22%).
Sales tax revenue also continues to grow, reflecting consistent consumer activity and a healthy local economy. The budget projects a 1 percent increase over the FY 25 year-end estimate, after removing certain one-time items, which translates to an additional $417,000 in revenue.
Property and sales taxes provide nearly 70% of the City’s general fund budget.
The hotel occupancy tax is expected to grow by only 0.5 percent due to fewer high-profile opponents on A&M’s home football schedule. Nevertheless, the previous year experienced a 5.6 percent year-over-year increase, showing a strong underlying demand for lodging.
You won’t see rate increases for electric, water, or wastewater services on your utility bill, but other monthly fees are indexed to inflation.
The budget includes a 3% increase for drainage and roadway maintenance, based on the Consumer Price Index for Urban Consumers. Solid Waste proposes a 5% increase, plus an additional 5% for certain services, for single-family, multifamily, and roll-off services, based on the CPI for Garbage & Trash. Solid Waste commercial services are also adjusted 5%.
Public Safety
About 50% of the City’s general fund budget goes to Police, Fire, and Emergency Medical Services.
The FY 2026 budget makes significant investments in public safety staffing and compensation. With proposed funding through the federal SAFER grant, 12 new firefighters will support the opening of Fire Station No. 7 on Greens Prairie Road in 2027.
Meanwhile, we are adding six new positions — one patrol lieutenant and five officers — in the Police Department, along with four patrol vehicles and critical equipment upgrades, such as a bomb robot and new software to improve reporting. An additional six officers are included in an overhire process.
The new resources will help the police meet growing demands and keep our community among the nation’s safest.
City Workforce
The City faces stiff competition to attract and keep our qualified workforce.
To retain and reward high-performing employees, the City is proposing an effective 4% pay increase for employees, including a 3% across-the-board pay-scale increase for all employees and a 1% market adjustment for non-step employees. Employees may also receive merit-based adjustments through a dedicated pay pool. Public safety personnel continue to receive annual step increases of 2%.
Notably, employee healthcare premiums will remain unchanged for the sixth consecutive year, and no increase is planned for City-paid healthcare contributions.
Capital Projects/Infrastructure
Capital investment remains a cornerstone of the City’s long-term strategy, with $84.1 million proposed for infrastructure improvements. Included are major transportation upgrades such as the rehabilitation of Rock Prairie Road and the realignment of Capstone. Those projects require $6.1 million in FY 26 appropriations, along with previously budgeted funds.
The completion of Fire Station No. 7 and the Public Works Operations Center are also included in the Five-Year Capital Plan.
Parks and Recreation will receive an appropriation of $8 million for new baseball fields, while electric utility infrastructure will be funded with $21.6 million in cash investments. Water and wastewater capital projects are also prioritized, with $44.7 million allocated for items such as relocating infrastructure due to the State Highway 6 project, water well rehabilitation, and improvements to wastewater treatment facilities.
Technology projects include a new permitting software system for Planning and Development, as well as equipment upgrades for Channel 19 broadcasting.
Targeted Investments
Service level adjustments total about $10.9 million across various funds. In the General Fund, $6.1 million in new investments support fire equipment, additional firefighters, police staffing and technology, traffic monitoring tools and park facility improvements.
The Hotel Tax Fund includes $2 million for events, tourism promotion, and athletic programming, including sponsorship of the Texas Amateur Athletic Federation’s Games of Texas. The Enterprise Funds contain $2.7 million in updates to support Northgate parking system upgrades, drainage maintenance staffing, solid waste vehicle purchases, and water service efficiency improvements.
Community Partners
Supporting our community sometimes means helping to fund community partners, such as the Brazos County Health Department and others, that benefit our residents. These agencies and community organizations play a vital role in delivering services that align with the City Council’s strategic goals, with a firm focus on measurable outcomes.
Agency leaders will present their requests and discuss their programs and impacts at the regular City Council meeting on Thursday at City Hall.
Financial Stability/Debt
The City’s strong financial position is reflected in its fund balance strategy. Of the $92.3 million in the General Fund balance, about 78 percent is assigned for specific policy-based, recommended, or Council-directed uses. These include emergency reserves, matching grant funds, vehicle replacement, capital reserve projects, and future economic incentives.
The remaining $20.2 million remains unassigned and available for strategic priorities or contingencies.
On the debt side, the City has structured general government debt to preserve about $20 million in annual capacity through at least 2031. For FY 26, the City proposes issuing $91.9 million in bonds — $22.2 million in general government debt and $69.7 million in certificates of obligation — for water and wastewater improvements.
The annual budget is grounded in long-term planning and fiscal discipline, and the City continually seeks ways to improve efficiency and reduce costs. In support of operational efficiency, City departments identified about $600,000 in cost savings during the planning process – $200,000 from contractual savings and $400,000 from department-led efforts.
Departmental vacancy rates will also continue to be monitored.
Budget Timeline
Following the community partner presentations on Thursday, the City Council will have an extensive budget workshop on July 16 and a public hearing on July 24. A tax rate public hearing and budget adoption are scheduled for Aug. 28. The fiscal year begins on Oct. 1.
The final approved budget will be available online by the end of October.
The proposed FY26 budget is not just a financial document; it’s a blueprint for College Station’s future. It reinforces a steadfast commitment to high-quality City services, maintaining infrastructure, and preparing for long-term growth.
With strategic investments in public safety, infrastructure, and community partnerships, the City is ensuring it can meet the needs of residents today while building a strong foundation for the challenges and opportunities ahead.
About the Blogger
Mary Ellen Leonard has been the city’s director of fiscal services since 2016. She previously was the chief financial officer for the Grub Burger Bar restaurant chain and operated her accounting firm for 14 years. A CPA since 1988, Mary Ellen has also served as a senior manager at Accenture and Arthur Andersen, CFO at Devereux Hospital, and senior financial analyst at Tenneco Gas Pipeline. She earned a degree in accounting from Texas A&M in 1986.
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