While growth can pay for growth, the proceeds aren’t always on schedule. The Decatur City Council faced that reality Monday night.
Several residential developments are slogging forward in Decatur. Those graded lots will soon bring new rooftops, new residents and real demands on call volume and city services. This summer, as the council began making heads or tails of actual revenues and the challenges posed by growth, it became apparent that meaningful budget relief from development isn’t quite here yet.
“From house completion to seeing property tax revenue is about a one-year lag,” Decatur City Manager Nate Mara said, explaining the city’s to plan to grow incrementally by around 125-150 homes for the foreseeable future. “That new construction value helps lower the rate for everyone, but I’d rather grow steadily than add 2,000 homes at once.”
Decatur’s tax base did grow this year. However in construction on those residential developments led to property tax revenue that fell short of original projections. The rain that helped replenish Lake Bridgeport hit Decatur’s budget on multiple fronts — shorting expected residential expansion by more than 30 homes on the city’s certified taxable values, while driving the rate of water consumption beneath projections.
In total, the city’s taxable property values increased to $1.495 billion this year, up 7.5 percent from 2024, with the addition of $17.5 million in new construction. But that number didn’t necessarily rhyme with the amount of permits pulled and inspections completed — much less the city’s future infrastructure planning to deal with the approximately 2,900 dwelling units that are either under construction, platted or in the concept planning phase within Decatur’s city limits.
During recent workshops, several department heads asked for the city to fund more positions — routine for this time of year as administrators and council ask for comprehensive understanding of each department’s current needs and what they face in the year ahead.
The most glaring staffing requests are centered around public safety. Decatur Police Chief Delvon Campbell asked to add 15 positions to his department, seeking additional officers, 911 dispatchers and an additional administrative hire — an effort to catch up from years of minimal staffing that would also align with its recently completed facility. Meanwhile, the Decatur Fire Department will seek to staff the second station expected to be finished in late 2026.
On Monday, city leaders asked the Decatur Police Department, Decatur Fire Department and the rest of city staff to operate with what they have right now, while offering raises and increasing healthcare benefits through a slightly reduced 56.57-cent per $100 valuation property tax rate.
“My thought was: if revenues are going to be lean, we need to commit to it — give things time to stabilize, bring new houses online and have a clean launching pad when growth accelerates,” Mara said.
The budget includes hiring freezes for currently vacant positions in the finance department, planning services and public works. Mara confirmed that the budget does not fund any new positions at the city and it will not take on the issuance of any new debt in FY 2026.
Council members discussed the proposed budget and 56.57-cent tax rate Monday night. The FY 2026 budget is balanced, with $17,765,690 in general fund revenue and $17,764,432 in general fund expenditures — up around 3 percent from last year. The city’s water and sewer fund budget is $6.54 million, and its debt service budget is $2.33 million.
The maintenance and operations rate is 40.7 cents and the debt service rate is 15.87 cents. That’s a 2 percent reduction from last year’s 57.75-cent rate, and it’s down 1.18 cents for every $100 of property value.
Under the rate, the city’s portion of the tax bill for a home valued at $100,000 in both FY 2025 and FY 2026 would decrease by $11.84. The budget factors in the recently approved expansion to its disabled or over-65 property tax exemption, which raised the homestead exemption from $25,000 to $30,000.
The rate would generate $471,973 in additional property tax revenue, up 5.91 percent from the previous year. The city’s revenues are up $622,744 when factoring in all of its streams, including water and wastewater and sales tax gains.
The values from new construction represent $99,019 of that increase. This year, the average home value in Decatur increased 4.21 percent, from $311,130 to $324,234. The new rate will cost that average homeowner about $1,834, an increase of $37 compared to the current fiscal year.
The city projects sales tax revenue to increase by $115,165 in FY 2026. Decatur’s August payment from the Texas Comptroller pushed the city to $6,446,079.10 in sales tax revenue for the current fiscal year. Decatur’s 1.5-cent sales tax rate is split, with 1 cent going to the city and the half-penny directed to the Decatur Economic Development Corp.
The majority of the additional operating funds in FY 2026 are dedicated to employee retention efforts. The general fund includes $290,000 for merit and public safety step plan funding and $165,000 for the city’s longevity and certification pay program. The budget braces for a 25 percent increase to healthcare costs, with the committee providing additional funding to shield employees from those rising costs.
The budget also projects additional expenses for technology and fleet vehicle leases, along with operating and capital expenditures for new city street paving and sidewalk improvement efforts.
“The plan is to make downtown more walkable,” Mara said.
The city’s staffing stagnation comes as Decatur moves forward with construction of Decatur Fire Station No. 2 — located strategically on Farm Road 51 to reduce response times on the other side of U.S. 81/287 — while also celebrating the completion of the long-awaited investment into the Decatur Police Department and its new, 30,500-square-foot home on Church Street. The grand opening ceremony for the new $27.4 million station was held Aug. 2. The second fire station will cost, at most, $15.89 million.
While the Decatur City Council gave staff the green light to proceed with a $65 million debt issuance that tackles the new station and starts the city’s major water and wastewater infrastructure overhaul, that issuance would affect debt service obligations in FY 2027, Mara said. Those FY 2027 capital projects include: Construction of DFD Station No. 2, $18 million, 30-year note; rehabilitation of existing DFD station, $2 million, 10-year note; general city facility rehabilitation projects, $5 million, 10-year note; facility and land acquisition for water/wastewater upgrades, $15 million, 30-year note; water treatment plant expansion, $12.5 million, 30-year note; wastewater infrastructure expansion, $12.5 million, 30-year note.
Given the $43.3 million investment into public safety facilities, Council members Darlene Hilton and Jake Hayes asked how and when the city could expand staffing for police and fire.
Decatur Fire Chief Deroy Bennett said his plan is to shift personnel between the two stations and lean on part-time staffing to make ends meet until more personnel can be approved. Bennett said Station No. 2 would need a staff of 12 for operation of the new ladder truck expected to be delivered in 2026.
Given the requests to add nearly 30 first responders to the payroll — whose salaries and benefits average about $92,000 each — and the city’s current budget picture, Mara said he hopes to contract with a third party to conduct a public safety staffing study on the needs of both departments.
“I would love to just say, ‘sounds great, let’s get it done,’ but we can’t right now,” Mara said. “I think [public safety staffing increases] are going to have to go to voters for a tax rate increase at some point. And if the city is going to do that, I want to have our data in line.”
He said the professional analysis would crystallize each department’s staffing picture and back up potentially sizable staffing requests with data. A voter-approval tax rate election is a realistic possibility to fund future public safety staffing, Mara said, and data from a third party who studied the departments’ needs would be valuable to both the council, staff and voters.
“I think [the staffing study representative] is going to come back and say, ‘you were spot on,’ or maybe even more likely say that number they asked for is actually low and that they need more,” the city manager said. “If so, great. Either way, we have a data asset to make a decision on instead of Nate’s math, Delvon’s math or Deroy’s math.”
The council will hold a public hearing on the proposed budget at 6 p.m. Aug. 25 at Decatur City Hall, 201 E. Walnut St.
A copy of the 2025-26 annual budget is on file at city hall for public review and inspection from 8 a.m. to 5 p.m. Monday through Friday.
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