Discuss, consider and act upon the second reading of Ordinance 2026-12 an ordinance of the Town of Sunnyvale, Texas, adopting a tax rate and levying property taxes for tax year 2026; enacting provisions relating to the subject and purpose of this ordinance; incorporation of premises; providing a savings clause; and providing for an effective date.
Staff recommends approval.
Council must adopt the FY 2026-27 budget prior to the adoption of the tax rate at the meeting and hold a public hearing as required by the truth-in-taxation code. The Town Council must adopt a tax rate to fund the adopted budget. Based on the Texas Property Tax Code, Council must adopt a rate for the budget if it intends to fund that budget with tax revenue. The tax rate is split into two parts, maintenance and operations commonly referred to as the M&O rate and the interest and sinking rate to fund the debt service payments commonly referred to as the I&S rate.
The M&O rate provides unrestricted general fund revenue to support the Town's day-to-day operations and essential services. The I&S rate provides revenue to fund debt service payments associated with bonds issued by the Town. Council will approve the final rate after it adopts the budget for FY 2027. The rate is calculated by the Dallas County tax office and verified by Town staff. The Town has several rates they can propose for the budget.
Voter Approval Rate $0.5222 per $100 (M&O rate $0.3510 and I&S rate $0.1712)
De Minimis Rate $0.5071 per $100 (M&O rate $0.3359 and I&S rate $0.1712)
No New Revenue Rate $0.4475 per $100 (M&O rate $0.2763 and I&S rate $0.1712)
FY 2026 Rate $0.4630 per $100 (M&O rate $0.3138 and I&S rate $0.1492)
Proposed FY 2027 Rate $0.4630 per $100 (M&O rate $0.2918 and I&S rate $0.1712)
The FY 2027 proposed budget is based on a proposed total tax rate of $0.4630 which is the rate of $0.2918 to fund maintenance and operations, and $0.1712 to fund debt service payments.
The proposed budget will raise more revenue from property taxes than last year's budget by an amount of $233,659. Property tax revenue to be raised from new property added to the tax
roll this year is $272,396.
M&O Rate: The proposed M&O rate is a not to exceed rate. The proposed budget is built around an M&O rate of $0.2918. The final M&O rate that is adopted must be equal to or lower
than what is proposed. The council can adopt a rate less than or equal to the deminimus rate.
Regardless of the proposed tax rate, a public hearing is required to provide an opportunity for public comment. This rate generates $6,303,185 in general fund revenue.
I&S Rate: The I&S rate of $0.1712 will provide sufficient revenue to meet the Town's debt service obligations. Property tax revenue is calculated at an I&S rate of $0.1712 on a certified value of $2,338,256,221. This rate generates revenues of $3,697,859 for debt service obligations.
Motions
If the No New Revenue rate is adopted:
"I move that the property tax rate be decreased by the adoption of a tax rate of $0.4475 which is effectively a 3.35% decrease in the tax rate, with a Maintenance and Operation
rate of $0.2763 and a debt service rate of $0.1712 for a total property tax rate of $0.4475 per $100 of assessed valuation".
If the rate for the existing budget is adopted:
"I move that the property tax rate be set at a tax rate of $0.4630 with a Maintenance and Operation rate of $0.2763 and a debt service rate of $0.1712 for a total property tax rate
of $0.4630 per $100 of assessed valuation". This year's rate will exceed the No New Revenue rate.
If any other rate higher than the No New Revenue rate is adopted:
"I move that the property tax rate be increased by the adoption of a tax rate of ______, which is effectively a _____% increase in the tax rate, with a Maintenance and
Operation rate of ______ and a debt service rate of ______ for a total property tax rate of ______ per $100 of assessed valuation.
Roll call vote must be taken.
The proposed property tax rate will generate revenue to support general fund operations and meet debt service obligations for the upcoming fiscal year.
As required, the notice was published in the Star Local News on August 12, 2026.