Texarkana, Texas council proposes flat 65-cent tax rate, cuts 25 positions as health costs jump 45 percent

TEXARKANA, Texas — The Texarkana, Texas City Council on Monday advanced a fiscal year 2027 budget built on a flat 65-cent property tax rate, a 3 percent spending reduction and the elimination of 25 positions through attrition, as city leaders warned that a roughly 45 percent spike in employee health insurance costs is straining the general fund.

The council voted unanimously to propose keeping the tax rate at 65 cents per $100 of assessed valuation, the same rate in place today. The vote does not adopt the rate. A public hearing and final vote on both the tax rate and the budget are set for Sept. 14.

Health insurance drives budget squeeze

The council approved a new contract with United Healthcare for employee medical and dental coverage effective Oct. 1. Administrative Services Director J.W. Bramlett told the council the city’s total medical package will cost an estimated $9.36 million, with the city paying nearly 80 percent, or about $7.38 million. That is an increase of roughly $1.77 million in city contributions over the current year. Employees will pay about $731,000 more.

Bramlett said the city conducted a comprehensive request for proposals but received only two medical quotes. Six other carriers declined to bid, and the competing quote from Curative far exceeded United Healthcare’s. The city also studied returning to a self-insured model but found that its claims experience over the past 24 months would have made self-insurance about $5.5 million more expensive than current spending. Staff said they will revisit self-insurance at next year’s renewal.

City Manager David Orr said the health cost increase, combined with state revenue caps, forced difficult choices. Senate Bill 2, passed in 2019, limits annual property tax revenue growth to about 3.5 percent, and voter-approved Proposition 9 raised the business personal property exemption from $2,500 to $125,000, costing the city about $600,000 in revenue.

“Even though this was a tough year, I do think that these reductions will set up the city for the next several years,” Orr said.

Three years of cuts planned

Finance staff outlined budget reductions totaling 7 percent by fiscal year 2029: 3 percent in the proposed FY27 budget, followed by 2 percent in each of the next two years. Nearly every department reduced its budget year over year, with the exception of police and fire, which the council prioritized. The overall general fund reduction is about $1.3 million.

The budget cuts 25 positions in FY27, with up to 16 more proposed in future years. All reductions have come through attrition, staff said.

Chief Financial Officer Kristin Peeples said sales tax, which generates about half of general fund revenue, is essentially flat. Collections through May sales are down 0.74 percent from last year, and FY27 collections are budgeted at $22.3 million with no projected growth. Certified property values came in $25 million lower than the October 2025 tax roll, a 0.64 percent decrease that trims projected net property tax revenue by just over $205,000.

Non-civil service employees would receive a 1 percent base salary increase plus longevity pay. Police civil service personnel would receive 2 percent across all grades and steps. Fire department pay is still in collective bargaining.

The city plans to issue tax notes generating about $700,000 for major street maintenance and about $20 million in water and sewer revenue bonds, the second of two issuances assumed in the 10-year rate structure the council adopted in 2022. Water rates will rise about 5 percent and sewer rates about 4 percent on Oct. 1 under that plan.

At the end of FY27, the city projects total fund balance just under $21.9 million, with $14.9 million unassigned, or 125 days of expenditures. City policy requires 60 days.

Waste Management offers to skip 5.16 percent increase for 5-year extension

The council was briefed on a proposed five-year extension of the city’s solid waste contract with Waste Management, which expires at the end of February 2027.

Ryan Fraser, representing Waste Management, said the company is contractually due a 5.16 percent rate adjustment on Oct. 1 but will forfeit it in exchange for the extension. Residential base rates would stay flat at $31.63 per month, and commercial rates would also hold. Fraser said a rate study found Texarkana businesses pay about $325,000 less than those in neighboring communities.

Councilmember Jay Davis pressed the company on the contract’s exclusivity for roll-off dumpsters, which the council had asked to be reconsidered during earlier workshops.

“It’s problematic for me to not consider it,” Davis said.

Fraser said the roll-off business helps subsidize rates elsewhere in the contract and that removing exclusivity while also withholding the rate increase may not be possible, but he agreed to work with staff over the next 30 days on an alternate proposal. Under the current contract, Waste Management holds exclusivity for hired residential and commercial waste hauling in the city, though contractors and residents may haul debris in equipment they own.

New school zone at Parks Elementary

The council adopted an ordinance establishing a 20 mph school zone around Parks Elementary School at 1915 Pine St. and repealing the zones at Paul Lawrence Dunbar Early Education Center and Spring Lake Park Elementary School, which Texarkana ISD has closed. Students from both campuses have relocated to Parks.

The new zone covers sections of West 20th Street, Main Street, Pine Street and West 16th Street, generally in effect 7:30 to 9 a.m. and 2 to 4 p.m. when school is in session.

Councilmember Steve Thompson, whose ward includes the school, said residents had raised concerns about traffic routing and speeding during drop-off and pickup. Traffic staff said they are working with the district on alternative routing and will implement it once the new zones are in place.

SWEPCO substation, zoning items advance

In public hearings, the council approved a specific use permit allowing Southwestern Electric Power Co. to rebuild its substation in the 5700 block of Gin Road serving the Richmond Road corridor. A SWEPCO representative said the existing equipment is more than 50 years old and serves the hospital and commercial district. The new substation will be built next to the current one to avoid service interruptions, and the old facility will then be removed.

The council also approved permits for a skating rink at 2729 New Boston Road, rezonings and manufactured home permits on Finley Street and at 2506 Liggett Street, a site plan amendment at 1047 Terry St., and the city’s 2026 Community Development Block Grant annual action plan.

Briefing items set for Sept. 14 votes include a 105-foot cell tower in the 4300 block of Gibson Lane, a permanent cosmetics permit at 6500 Summerhill Road, and an off-premise multi-tenant sign at 3701 New Boston Road requested by developer Kirk Green, who told the council he plans a connector road through his property between New Boston Road and the loop, with a Choice Hotels project in the works and about 11 acres left to develop.

The proposed FY27 master fee list, also up for a hearing Sept. 14, includes higher fees across animal services, fire inspections, building inspections, development review and solid waste rates, plus new library fees for 3D printing and other services.

Public comment targets Flock cameras, data centers

During open forum, Texarkana resident Brianna Gretline spoke in opposition to the city’s Flock Safety license plate reader cameras and to data center development, citing water consumption and environmental effects.

Other business

On the consent agenda, the council approved contracts for the Lakeridge Drive sewer main extension ($115,071), North Street water looping ($65,178), Spring Lake Park sewer replacement ($157,538) and West 32nd Street sewer main replacement ($535,199), along with a change order adding an inch of asphalt to the Runway 4-22 extension and overlay project at Texarkana Regional Airport.

In his report, Orr highlighted the state’s biennial military preparedness report, which credits Red River Army Depot with $1.2 billion in annual economic impact and more than 6,700 jobs, and the 10th anniversary report for the Texarkana Arts and Historic District, which estimates $9.1 million in annual economic impact.

The council meets next at 5:30 p.m. Aug. 24 for a budget public hearing. The regular September meeting is Sept. 14 at 6 p.m.

Council members Betty Page and Christie Matlock were absent Monday for school meet-the-teacher events. Mayor Bob Bruggeman voted on items due to the absences.