McKinney's FY 2024-25 budget proposes lower property tax rate, employee pay raise

McKinney city officials are proposing one Budget of 888 million dollars for the next fiscal year, with a general fund budget of $219.4 million and a decrease of about $0.01 in the property tax rate.

The essence

McKinney City Manager Paul Grimes and city staff members presented key budget items to City Council members at a August 9 working session.

The proposed budget includes a lower tax rate, increases in water and sewer rates, and pay increases for public safety and government employees. Public input opportunities are scheduled for the next few weeks before a Sept. 3 meeting when McKinney City Council members are expected to call a vote on the proposed budget and tax rate.

“We remain committed to providing essential services and investing in the future of our community,” Grimes said in a statement included with the budget documents. “We are confident that the proposed budget will enable us to achieve our shared goals.”

SPECIFICITIES

If approved, the proposed budget includes: lower property tax rate in recent years, according to the city's website. The budget includes a proposed tax rate of $0.415513 per $100 valuation, which is a decrease of $0.012 from last year. The proposed tax rate consists of two parts, including:

• The maintenance and operations, or M&O, rate, which is proposed to be $0.278935 per $100 valuation
• The rate of interest and sinking, or I&S, which pays for the city's principal and interest on its debts and is proposed to be $0.136578 per $100 valuation

According to city ​​documents. The city's assessed taxable value is expected to increase from $35.9 billion in FY 2023-24 to $39.7 billion in FY 2024-25.

Despite the lower proposed tax rate, the city is expected to raise 7.04% more in total property taxes than last year's budget, amounting to about $10.8 million, according to city documents. Of that amount, $6.4 million is expected to come from revenue for property added to the tax rolls this year, the document said.

“As our values ​​go up, from an assessed value perspective, the corresponding impact on the tax rate is generally that the tax rate goes down,” said Director of Strategic Services Trevor Minyard.

If the rate is approved, the average tax for a McKinney resident would be $2,137, based on an average market value of $574,579 and an average taxable value of $514,460, according to the presentation.

Deeper dive

The budget includes expected revenue of $219.4 million and expected expenses of the same amount, according to city documents. Below are some funding requests and items being considered in the proposed budget for fiscal year 2024-25.

Salary increase for municipal employees: The budget includes an appropriation to fund pay raises for city employees, including $1.9 million for a raise for public safety employees and $1.6 million for a raise for general government employees, according to the presentation.

Additional City Personnel: The proposed budget includes approximately 1,600 authorized city and public safety personnel roles. The budget includes a proposed increase of 50 positions, according to city documents. Some of the new positions proposed in the budget include:

• An accountant
• Six first responders
• Two forensic investigators
• Two detectives
• Eight firefighters
• Two public service officers
• Two code compliance officers

Planned projects: The proposed budget allocates funds for several capital improvement projects, the presentation said, including:

• $17.3 million for expansion and renovation of city facilities
• $9.7 million for projects at Erwin Park and parks facilities in the Towne Lake District
• $9 million for infrastructure improvements at Tennessee and Lamar streets
• $147.65 million for utility relocations as part of the US 380 bypass project, derived from Collin County grant funding
• $4 million for lanes 1 and 2 of Bloomdale Road between Custer Road and Ridge Road

Water and sewage rates: The city will see increased costs for water and wastewater services from the North Texas Municipal Water District next year, city documents say. As a result, the budget proposes a 9% increase in wastewater service rates and a 2% increase in water service rates.

What else?

Council members have not made a decision on whether they will commit funds to a recent grant request they received from McKinney Education Foundation.

Representatives of MEF has requested 500 thousand dollars to support three new revenue-generating roles at a June 18 meeting, of which $250,000 was proposed to be awarded over the next fiscal year. Grimes said that if funding for the request were to be approved, it would either include the impact on the tax rate, which would result in about a $0.001 increase in the proposed rate, or redirect the funds from another expense.

McKinney Mayor George Fuller asked city staff to bring the article up during the council's next work session meeting, which is scheduled for Aug. 20, for further discussion and possible action on the request.

“It probably won't be an increase in the tax rate, so I think we can continue to move forward now,” Fuller said of choosing to consider the request at a later date.

Stay tuned

According to the presentation, a meeting is scheduled to be held on August 20 for citizens' contribution to the proposed budget.

An additional public hearing opportunity for comments on the budget and tax rate will be held Sept. 3 at McKinney City Hall. City Council members are expected to vote to approve the budget and tax rate at the September 3 meeting.

For more information on the proposed budget, visit www.mckinneytexas.org/210/budget.