To: Aaron Rector, City Manager
From: Marcia Reyna, Director of Administrative Services and Bryan Rebel, Chief Financial Officer
Subject:
Title
Consider a resolution of the City Council of the City of Keller, Texas, to consider a proposal to adopt a tax rate that will be lower than the no new revenue and voter-approval tax rates; and providing an effective date.
During the Keller City Council meeting on August 4, 2026, staff presented the proposed FY 2026-27 budget, including a proposed property tax rate for Council's consideration. At the conclusion of the discussion, the City Council indicated its preference for a tax Rate of $0.300417, which is below the No-New-Revenue Tax Rate.
The Fiscal Year 2026-27 proposed budget was prepared based on a total tax rate of $0.300417. The proposed rate is an increase of $0.01342 from the current rate. The proposed rate of $0.300417 is lower than the no new revenue and voter approval tax rates, therefore, a public hearing is not required prior to tax rate adoption. Per Senate Bill 2, adopting a rate under the no new revenue and voter-approval rate requires a notice of the tax rate which will be posted in the Star-Telegram by August 30, 2026, and adoption of the rate at a public meeting which is scheduled for September 15, 2026.
Generally, the no new revenue tax rate is the tax rate that would generate the same total amount of property tax revenue as the prior year, when comparing properties taxed in both years. The FY 2026-27 no new revenue rate is $0.300418. The voter-approval tax rate is defined as the sum of the maximum effective maintenance and operations rate, and the debt service rate and to exceed the rate requires a voter approval and was called the rollback rate in prior years. The voter-approval tax rate is $0.312452. The voter- approval rate adjusted for unused incremental is $0.356099.
Financial Impact:
The proposed rate would create a total levy of $23,688,458 which is an overall levy decrease of $363,671. The General Fund levy would be $20,064,744 which would be a decrease of $249,323. The Debt Service Fund levy would be $3,378,335 which would be a decrease of $128,435. The Tax Increment Reinvestment Zone #2 Fund levy would be $245,379 which would be an increase of $14,087. With the approval of the resolution, the tax rate can only be adopted at the proposed rate or lower. Any decrease to the tax rate would result in a decrease to the proposed levy.