Budget FAQ's

As required by the City's Charter and Local Government Code Section 102, the City Manager submits the proposed budget to the City Council at least 30 days before the governing body adopts an ad valorem tax rate. The budget is filed with the City Secretary in accordance with State Law and copies of the proposed budget will be made available at the City's public library and on the City's website. The City Council considers the proposed budget during a budget workshop, which also provides an opportunity for public input as required by state law. The budget is formally adopted by the City Council no later than September 30th at a regularly scheduled Council Meeting. Once adopted, the budget goes into effect on October 1, 2026.

The City Manager and staff work through the budget plan diligently and with a high level of input from all Department Heads.  After the submission of the initial operating requests and new capital spending requests, the City Manager works with the departments to develop a proposed budget that fits within the revenue expectations and key department goals.  As a team, your City of Gatesville leadership staff considers the budget to be not only an accounting tool for the year ahead, but also a guide for leadership and planning for the coming several years. 

The continued city-wide installation of fiber internet, along with many other factors including comparatively low real estate costs in Coryell County, have proven to spur somewhat historic growth opportunities in the past year.  We have seen notable retail and residential development projects and inquiries over the past two years, and we expect these to continue.

While potential growth is considered beneficial to the overall quantity and quality of services that we can provide, we have begun the process of upgrading infrastructure to meet current and future demands.  To meet these infrastructure improvement challenges, we have engaged in over a dozen grant funding opportunities, assessed and monitored our debt services, and developed creative solutions in long-term planning. 

While many larger cities in the region experienced noticeable drops in sales tax revenue in FY 25-26, Gatesville has seen somewhat flatter returns that have nonetheless maintained a level above our budget projections. 

Our FY 26-27 revenue projections continue to be conservative in nature, accounting for known trends in Sales Tax, Ad Valorem Tax, Water/Wastewater Funds, fee schedules, and others.

Goals

1. Maintain accountability and improve service levels as funding allows within a balanced budget; adopt an ad valorem tax rate sufficient to fund service-level requirements set forth by Council.
2. Using position titles and job descriptions updated in 2026, ensure employee pay scales align with council’s expectations for market comparisons (i.e., commission a pay study); ensure adequate COLA adjustments occur in FY 26-27 while studying pay scales; and, implement market adjustments for those positions which have not received one in the past two years, to ensure retention and recruitment goals are met.
3. Add personnel only where feasible within the balanced General Fund and Enterprise Fund budgets.
4. Execute a Capital Improvement Plan (CIP) that is informed by the Comprehensive Plan and approved by Council.
5. Continue to improve security, safety, and visitor experiences at all City of Gatesville facilities.
6. Maximize grant funding to improve city infrastructure and community resources:
   1. Repairs from 2024 floods (FEMA)
   2. Airport Master Plan (TXDOT Aviation)
   3. Police Station (USDA Rural Facilities)
   4. Parks (several grant opportunities via TPWD)
   5. Water improvement projects (HB 500, CDBG, TWDB, EPA, USDA, and others)
   6. Wastewater improvement projects (EPA, TWDB, and Congressman Carter’s Office for North Ft. Hood WWTP proposal)
7. Ensure adequate staffing and resources for all departments, as related to the city’s potential growth opportunities, both short and long term.
8. Continue to evaluate and organize mission goals based on the 2025 update of the 2020 Comprehensive Plan.

Expectations

1. Maintain the current property tax rate at 0.56000.
2. Continue progress on retail and development opportunities.
3. Continue January rate adjustments for regional Wholesale Water Customers
4. Initiate/implement multiple Capital Improvement Projects.
5. Continue planning for a new police department facility.
6. Continue Parks Master Plan development and consideration of projects, funding.

The two largest revenue/expenditure funds are the General Fund and the Water & Sewer Fund.  Generally, one fund does not support projects or operations in the other fund.  Street maintenance, for example, is supported by the General Fund and has nothing to do with the water rates that help support the Water & Sewer Fund. 

General Fund:

Departments supported by the General Fund include Police, Fire (via allotments to Gatesville VFD), Streets, Parks & Recreation, Library, and Administration. 

The revenue sources for the General Fund include Ad Valorem (Property) Tax and Sales Tax, as well as fees, permits, fitness center revenues, and others.

Water & Sewer Fund:

Departments supported by the Water & Sewer Fund include Water Production, Water Distribution, Sewer Collections, and Wastewater Treatment.

 The revenue sources for the Water & Sewer Fund include residential and commercial water sales, TDCJ water and sewer sales, North Ft. Hood water sales, Wholesale Water Customer sales, sewer fees, solid waste fees, grants, and others.

The City pursues relevant grant and outside funding opportunities; the goal is to reduce the tax dollar and water rate burden, while we maintain operations and perform necessary Capital Improvement Projects.

The City is not considering raising its tax rate.  The City’s ad valorem tax rate is proposed to remain at the same rate as the past four years, which is .56000.  A rate of 0.56000 means $0.56 of tax for every $100 of taxable property value.

For example:

• Property value: $100,000
• Tax rate: 0.56000 per $100
• Tax owed: ($100,000 ÷ 100) × $0.56 = $560

Another example:

• Property value: $300,000
• Tax rate: 0.56000
• Tax owed: ($300,000 ÷ 100) × $0.56 = $1,680

It is important to note that the rate of 0.56000 is just the City of Gatesville’s portion of the total tax rate.  Your property tax bills combine several rates, which means Coryell County, Gatesville ISD, and others can also affect your total property tax bill each year. 

Another effect on your total property bill comes from the appraised value of your property.  The Coryell Central Appraisal District places a taxable value on real and personal property, and any protests on appraised values must be filed with Coryell CAD.  You can find more information at www.coryellcad.org.

The City complies with state law on notification of tax rate, and therefore posts the following two notices with the proposed budget (full budget book available online at https://www.gatesvilletx.com/departments/finance/budget/index.php).

Council is currently considering a proposed rate increase for City of Gatesville Water & Sewer customers.  There is a reason for the proposed rate increase, and it is not taken lightly by city staff or council. 

City infrastructure is old, and significant investments in Capital Improvement Projects will be required to replace those pieces which are likely to fail but are critical to maintaining services.  Over the past 3+ years, the City has engaged the services of several engineering firms to understand the most critical needs it the water production, water distribution, and wastewater collections & treatment areas.

The chart below shows the five-year Capital Improvement Plan on the left side, and the proposed five-year rate plan on the right side.  The rate plan is the result of the City-commissioned water rate study conducted by NewGen Strategies.  As noted in the chart, the City continues to pursue grant and outside funding sources for many of the Capital Improvement needs.  The majority of the rate changes this year and next will cover urgent areas of concern:

1. Rates in the current year are covering needed improvements to Gatesville’s Intake Plant on Belton Lake, and the Water Treatment Plant, which are each operating with antiquated electrical systems that create hazards for workers and are prone to expensive failures.
2. Rates next year are intended to cover the required Phase 2 improvement project at Gatesville’s Stillhouse Wastewater Treatment Plant, which must be completed by early 2029 to maintain TCEQ compliance related to Plant capacity.

The urgent areas of concern are listed in the below chart, as well as narrative descriptions that follow.

Current & Next FY Major Projects, Water & Sewer Fund

Project Descriptions

Operations & Maintenance Projects

1. BP 3, 5, and 7 EST tank blast and recoat
   • D2 Project BPS Tank Reconditing Maguire
   • Project identified as high priority/high likelihood of failure by City engineers Freese & Nichols (FNI) in 2024 via their “Mini CIP Plan,” presented in Water Rate study to council multiple times, including 9/15/2025.
   • Above-ground fresh water Elevated Storage Tanks (ESTs) need refurbishment.
2. Water Production Clarifier 3 blast and recoat
   • Project identified in Water Rate study, presented to council multiple times, including 9/15/2025.
   • Necessary repair for fresh water supply.
3. Water Production filter media replacement
   • Project identified in Water Rate study, presented to council multiple times, including 9/15/2025.
   • Filter media elements are critical to the production of safe drinking water and are due for replacement.
4. Raw water intake #1 blast and recoat
   • Routine maintenance (repainting)
5. Leon plant sewer plant paint and repair piping
   • Routine maintenance to maintain TCEQ compliance.
6. In-ground infrastructure
   • Budget = $442,000; line item 020-5-240-50010 (from page 9 in budget book)
   • Staff may need additional maintenance funds to accelerate the replacement schedule for in-ground freshwater supply pipes.
7. Water Master Plan
   • The City commissioned the “Mini CIP” from FNI in 2024, but must now produce a large-scale analysis of all water infrastructure.
   • Master Planning is essential to the proper identification of the next priorities in long-term Capital Improvement Project planning.
8. Other urgent O&M issues throughout the city
   • Whether addressing some of the Tabled Projects listed below or other projects as needs arise, additional funding may become necessary.
9. Operating Revenue
   • Proposed FY 26-27 minus capital expenses & bond payments
   • Operating revenue comes directly from water and sewer rates, and funds the day-to-day provision of services.

Capital Projects

1. Water Production & WSC CIP- 2026 CO
   • Electrical improvements at intake, plant,BP-1
   • Project identified as high priority/high likelihood of failure by City engineers Freese & Nichols (FNI) in 2024 via their “Mini CIP Plan,” presented in Water Rate study to council multiple times, including 9/15/2025.
   • All electrical panels at the Raw Water Intake, Water Production Plant, and Booster Pump 1 will be replaced.
   • These electrical panels date to the late 1980s and, as such, are hazardous, inefficient, and prone to failures for which no quick repairs are possible.
   • Debt obligation approved by council and project is in engineering phase.
2. SH 36 Gravity Main Replacement
   • EPA grant; construction will begin Sept. 2026
   • This EPA grant was originally planned for lagoon additions at the Water Production Plant. However, the engineers at the time underestimated the cost of the lagoons, so staff worked with EPA to obligate the funds to another project.
   • This gravity main replacement will occur in the area of Holiday Inn Express and Ace Hardware, and addresses an area of common failures and bottle-necking of sewer flow.
3. Stillhouse WWTP repair from 2024 flood
   • FEMA grant; construction will begin soon
   • The effluent ramp was damaged in the 2024 flood and is in danger of collapse in a future flood event.
4. Leon WWTP repair from 2024 flood
   • FEMA grant; construction will begin soon
   • The retaining wall and concrete stairs to the effluent pipe were damaged in the 2024 flood, and are in danger of collapse in a future flood event.
5. Brown Park Sewer Line Relocate from 2024 flood
   • FEMA grant; construction will begin soon
   • The Leon River embankment eroded significantly in the 2024 flood event, and now the in-ground sewer main is within 5 to 10 feet of the new embankment. The sewer main is danger of collapse in a future flood event.
6. EST repairs & improvements C. Carter Office
   • EPA/Congressman Carter; in documentation phase via EPA
   • The funding took two years to clear through congressional appropriation. Meanwhile, TCEQ mandated immediate repairs to the Hughes Elevated Storage Tank (EST).
   • Hughes EST repairs were completed at City cost, and are reimbursable.
   • The remaining funds are eligible for use on several other ESTs in need of repair and improvement to avoid future TCEQ violations.
   • Identified as high priority/high likelihood of failure by City engineers Freese & Nichols (FNI) in 2024 via their “Mini CIP Plan,” presented in Water Rate study to council multiple times, including 9/15/2025.
7. Stillhouse sewer plant improvements, phase 2- Bond funding
   • low interest loan
   • The plant is operating on a TCEQ permit that expires in mid-2029. By that expiration date, the plant must meet the mandated increased capacity.
   • The original plan for increasing plant capacity dates back to 2018, and as the project was commencing in late 2023, staff at that time realized the engineers’ original opinion of probable cost was grossly underestimated. Thus, the original project was broken into two phases.  Phase 1 is due for completion in Fall 2026.
8. Insulated storage building for Vac Trucks Revenue funded
   • The sewer vacuum trucks can experience failure and damage in extreme cold conditions.
   • To remedy this, they are currently stored indoors as necessary in the Gatesville VFD building. This arrangement is unsustainable and a new building for truck storage is necessary.
9. Heavy equipment: Dump Truck, Backhoe, Pickups, sewer camera, sewer trailers
   • Capital outlay
   • Equipment replacements are listed on page 36 of the budget book.
10. WWTP Recirculation Pump
    • USDA; awarded and in progress Aug. 2026
11. BP-7 Rehabilitation
    • HB-500 / Governor's Office
    • Council received information on needed repairs to the Booster Pump station (at the base of the water tower by Coryell Memorial Hospital).
12. North Ft. Hood WWTP Proposal
    • US Army, DCIP or DEAGG / full Federal project (TBD); unconfirmed estimate
    • The City currently owns and operates a lift station on North Ft. Hood, which moves all sewage from the post to the forced main line along SH 36.
    • The City moves and treats all North Ft. Hood sewage, which takes a significant portion of the capacity of the force main and the wastewater treatment plant.
    • Development in Ft. Gates area is stalled due to the force main having no additional capacity of large developments in the area.
    • The City is working with US Army command, Heart of Texas Defense Alliance, and others to propose the construction of a dedicated wastewater treatment plant on North Ft. Hood.
13. Intermediate Force main Extension
    • SH 36 force main is at capacity. This project separates FM 107 lift station from Intermediate Lift Station, and addresses an issue of multiple blow-outs on this section of sewer force main.
14. Existing Manhole Rehab
    • Routine maintenance
15. BP#2 Improvements
    • Identified as high priority/high likelihood of failure by City engineers Freese & Nichols (FNI) in 2024 via their “Mini CIP Plan,” presented in Water Rate study to council multiple times, including 9/15/2025.
16. Leon West Trunk Lines, all 3 phases
    • Estimates listed in NewGen study

Regular council meetings are held on the second and fourth Tuesday of each month, at 5:30 pm in the Gatesville Council Chambers (southeast side of Gatesville City Auditorium building, 110 N. 8^th Street.  The budget calendar generally coincides with regular council meetings, with special meetings in May and September.

Budget Calendar:

You can email the Gatesville City Manager at bhunt@gatesvilletx.com.  Questions will be answered by email and/or placed on this FAQ page.

Public notices, city council agendas & minutes, budget documents, and more are posted on our website, www.gatesvilletx.com.

The monthly City Manager Report to Council is posted online at: https://www.gatesvilletx.com/government/city_administration/city_manager/city_manager_monthly_reports.php