Background
The annual budget is a planning and policy document that sets the course for the City for the fiscal year, which begins October 1, 2023, and ends September 30, 2024. Under Section 6.03 of the City Charter, the City Manager is charged with filing a proposed budget no later than 60 days before the end of the fiscal year. The Charter also requires a multi-year capital improvement program, as well as a current-year capital budget. State law also requires that a budget be filed and adopted by the City Council.
Accordingly, the Fiscal Year 2024 Proposed Budget and Five-Year Capital Improvement Program were presented to the City Council on July 18, 2023. The proposed budget and five-year CIP were thoroughly reviewed with the City Council over a series of budget workshops during the month of August, and a public hearing was held on September 5, 2023.
The proposed Fiscal Year 2024 (FY24) budget and five-year capital improvement program (CIP) follow guidelines in the City Council-adopted Financial Management Policy Statements. The focus of the budget is an investment in priorities and services that provide high value to the Sugar Land community today and into the future, including public safety, redevelopment, data-based decision-making, and a championship workforce. The proposed budget provides for future success, ensures continued financial & operational stability, and is structurally balanced and sustainable into the future. Our goal is to balance investment in both maintenance & operations and capital funding to increase our resiliency in FY24 and into the future.
Staff previously developed a two-year action plan consisting of Four All-In Initiatives to accomplish the strategic outcomes. They are called all-in because staff is all-in on a “First Team Mindset” that focuses on all-in initiatives intended to deliver City Council’s vision. Each initiative has been designed to engage the entire organization at all levels and use the full resources of the city to accomplish amazing things. The following all-in initiatives are intended to address City Council’s vision.
- Commercial and Residential Redevelopment
- Trailblazing Transformation of Our Culture & Organization
- What Works Cities
- Planning for the Next GO Bond Election
The City continues to be recognized as a leader in financial stewardship, with strategies specifically tailored to the community and designed to maximize both the conservative nature of the City’s finances and to offset the residential tax burden.
Priorities for FY24 Budget & Five-Year CIP
The FY24 budget provides leadership in conservative, resilient & responsible stewardship through strategic investment in priority areas. The focus of the proposed budget is an investment in priorities and services that provide high value to the Sugar Land community today and into the future, including public safety, redevelopment, data-based decision making, and a championship workforce.
GO bond projects funded in FY24 include:
- Public Safety & Public Services Building Rehabilitation
- Emergency Operations Center (EOC)/ Public Safety Dispatch Center
The budget and five-year CIP are built with a recommended increase to the nominal tax rate, specifically for the completion of the remaining projects from the 2019 GO Bond Election. The current aggregate tax rate of $0.34650 is planned to increase approximately $0.00350, for a new total tax rate of approximately $0.35000 – the residential impact of which will be partially offset by the City Council’s previous decision to increase the residential homestead exemption by 2% to 15%.
The budget also recommends utility rate increases needed to financially sustain the water and wastewater utility and implement the IWRP and water and wastewater master plans. The proposed rates result in an increase to residents of $3 per month for 10,000 gallons usage. Residential solid waste services will increase $0.99 based on the contract to $20.84 per month.
Since the budget was filed, a few changes have been made to the operating and CIP budget. Based on the certified tax roll received in July, property tax revenues and MUD rebates have been revised to reflect certified values at the recommended tax rate, impacting both the General and Debt Service Funds.
Exhibit A reflects the final FY24 income statements for each fund, including the Sugar Land Development and Sugar Land 4B Corporations.
Exhibit B reflects the final five-year capital improvement program. Funding is incorporated into the budget for all FY24 capital projects. FY25-28 projects are for planning purposes only and are subject to change based on priorities, timing, and funding needs as future budgets are considered by City Council each year.
Exhibit C reflects the compensation plan and reflects the organizational structure and titles as proposed for FY24. There are five compensation plans: Non-Exempt, Exempt, Management & Elected Officials, Police, Detention & Dispatch, and Fire.
The City Charter requires that the budget be adopted by ordinance no later than the 25th day of the last month of the fiscal year. The budget includes revenues based on the certified tax roll at the proposed tax rate. The 2023 tax rate is scheduled for adoption on a separate agenda item, as state law requires that the tax rate be adopted after the budget is approved, as property taxes can only be levied in accordance with the budget.
Additionally, since the budget includes more revenues from property taxes than the prior year, the Local Government Code requires a vote to be taken separate from the adoption of the budget and tax rate to ratify the tax revenues that are included in the budget. This vote has been placed on the agenda after the adoption of the budget and tax rate.