News Flash

Archive 2 - 2020 News Releases

Posted on: September 29, 2020

Sugar Land Adopts FY2021 Budget, Tax Rate

Sugar Land, TX – Sugar Land City Council adopted a $254.3 million budget for fiscal year 2021 and a tax rate of 33.65 cents per $100 -- one of the lowest in the state of Texas among similarly sized cities -- as proposed after a series of workshops and public hearings. The fiscal year begins Oct. 1.

After a series of budget workshops and public hearings, the final budget includes $226.6 million for operations -- a more than 2 percent decline from the prior year -- and $27.65 million for capital projects, including a first phase of projects approved by voters in 2019. The total budget is a 6.7 percent decrease from the 2020 approved budget. Overall, it follows guidelines in the City Council-adopted Financial Management Policy Statements and reflects responsible and conservative decision-making as a result of unprecedented uncertainty in the midst of the COVID-19 global public health emergency. 

Recognizing the economic impacts of COVID-19 on residents and businesses, the city immediately began taking budgetary actions at the start of the global health emergency to respond to anticipated declines in various city revenues -- most notably sales tax revenue, which is a major funding source for the city’s operating budget.  While also working swiftly to ensure the city’s financial resiliency, the city has been able to continue to provide critical public safety, emergency management, infrastructure and business support services.

The budget provides for continued financial resiliency and maximum flexibility through fiscal year 2021 in an effort to place the city in a position to respond if the recovery is stronger than anticipated or the economy worsens beyond projections.

“From personal losses of loved ones, to changes in our normal routines, to financial impacts and continued uncertainty, 2020 has proven to be a challenging year for residents, businesses and the City of Sugar Land,” said City Manager Michael W. Goodrum.  “While our proactive and resilient financial management policies have enabled us to withstand impacts from the economic downturn better than most, we are not immune from impacts of the pandemic.  Ultimately, the final budget reflects reductions to minimize the impacts and continues to place the city in a position for future success, even as we expect to continue to see economic impacts well into the next year.”  

The budget reflects anticipated impacts of the COVID-19 pandemic through mid FY21, with operational constraint built in by delaying significant expenditures until at least March when the impacts can be assessed.   Such actions and strategies -- which are in accordance with the strong financial management practices that have earned Sugar Land recognition as a financial leader across the nation and by bond rating agencies -- include: 

  • reducing departmental expenditures to continue line-item reductions identified in FY20;
  • managing vacancies and continuing a non-public safety hiring freeze, with the potential to eliminate vacant positions if necessary;
  • reducing and delaying major expenditures, such as infrastructure rehabilitation and fleet and high-tech equipment replacements, until there is more economic certainty; and
  • focusing on critical infrastructure projects – including implementation of the Integrated Water Resource Plan (IWRP) to further secure the city’s future water supply and a limited number of projects approved by voters in 2019 to address drainage and structural flooding.

“The conservative approach and responsible flexibility built into the 2021 budget is another example of Sugar Land’s leadership in financial stewardship and resiliency, and these efforts have allowed us to prepare a budget that is operationally sustainable into the future, continues to offer one of the lowest property tax rates among cities our size, maintains essential services and makes progress on critical infrastructure projects approved by voters,” said Goodrum.

The budget includes a revised implementation plan for the 2019 voter-approved general obligation bond projects, taking into account the economic impacts of COVID-19 and reducing the previously planned year one tax rate increase of 3 cents to approximately half a cent.  With that, fiscal year 2021 includes funding for priority projects, with an emphasis on addressing structural flooding -- funded from a .45-cent increase on the tax rate.  The remaining projects will be spread over the next four years along with the remainder of the 3-cent tax increase to fund them as approved by voters.  

City Council also approved rates for utilities and solid waste that will be effective in January 2021.  The utility rates will result in an approximate $10 monthly increase to utility bills for residential customers, as the city prepares to implement the IWRP and meet the unfunded mandate to reduce groundwater consumption by 60 percent in 2025. Residential solid waste will cost $19.76 per month -- a 38 cent increase beginning in January.

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