Budget Talk by the Council

Source: City of Richardson.

On August 18, 2025, the Richardson City Council reviewed the proposed 2025-2026 budget. You can watch the whole thing on the city's website. Or you can read a comprehensive account of it or watch an AI video summary on Justin Neth's Substack. Here I'm only going to focus on a few quotes that stood out for me.

Bottom line: The total proposed FY 2025-2026 budget is $418,498,270, an increase of $12,419,51 or 3.1% from FY 2024-2025. The typical taxpayer impact will be an increase of $237/year in taxes and fees paid to the city.

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Those Pesky Critical Hinges

City Manager Don Magner: "It's this positive trajectory that has me very bullish in believing that with just a few things falling into place that, quite frankly, international and national things that we don't control, with a few things falling into place, our return to a growth mode is going to be imminent."

Earlier, Magner showed a slide that said, "Global policy uncertainty is damping U.S. economic momentum, raising investor and business cautiousness, and elevating inflation volatility. The trajectory for growth hinges critically on whether trade policy resolves soon or remains fractured" (emphasis added). In fact, tariffs are resolving at about 15% for imports, compared to a weighted average of 1.5% in 2022. So, Magner discounting "international and national things that we don't control" is doing a lot of work in Magner's rosy outlook. Richardson prides itself on practicing conservative budgeting. Now is the time it's needed.

Ever-rising Cost of Water...

Mayor Pro Tem Ken Hutchenrider: "I look at this water and sewer fund, they increased 9.18%. I mean, nowhere else in this world right now are services, you can look at anything, getting 9.18%...Is there anything that we [can do to] push back on North Texas Municipal Water District on these increases? Because this is, it's, at some point, it's just not sustainable."

Magner replied, "So the driving cost in the district's budget is capital. And, you know, I think, Mayor, I've said to you, asked the district the question of, have they done the cost benefit analysis regarding what it would cost to incent conservation, or even provide economic development incentives for large water users to, you know, let's offset some of the capital costs for a large water user to increase reuse from 15% to 50% or 75%. And I personally, I don't have the math yet to prove it, but I personally believe there is a cheaper path forward than building the next water distribution center or pump center or pump station, because now we're building those 30 and 40 and 50 miles away."

It's time for the City to develop a new action plan. Mayor Pro Tem Hutchenrider ought to ensure there's a Council tactic in the final list that the council will soon adopt that addresses this idea offered by the City Manager. Also, maybe Mayor Amir Omar should use his place on the Metroplex Mayors Association (MMA), or other such bodies, to organize other mayors and cities to together "push back" (Mayor Pro Tem Hutchenrider's term) on the North Texas Municipal Water District's "unsustainable" (Mayor Pro Tem Hutchenrider's term) practice of relying on building our way out of problems caused by our own growth.

...And Doing Something About It

Councilmember Jennifer Justice: "I don't remember whose idea it was during the budget retreat, but I just sort of want to reiterate, looking at maybe a tiered water usage rate. I don't know whoever's idea that was. I thought it was a really good one."

City Manager Don Magner replied, "If it sounds good to you, I'll make sure I include it...I think as a tactic, for this term, a rate study would be appropriate."

To paraphrase a proverb, "The wheels of government grind slowly but exceeding fine." Maybe, just maybe, we'll finally get a handle on out-of-control water bills in our growing north Texas region.

Property Tax Estimates

Councilmember Joe Corcoran: "When I looked at prior budgets, you guys have been so spot on with the property tax every single year. I mean, half a percentage point, a percentage point difference. It's really just phenomenal. And then this year, because of things outside of our control, it was substantially, I think it was like 4% off. Is there nothing in our methodology that we need to change going forward for property tax estimates?"

After explaining that a large part of the error was due to a mistake in the certified tax rolls by Collin County Appraisal District (CCAD), Don Magner said, "We have changed the protocol prior to certification now. Having Todd in Finance have a check-in with the appraisal district in advance of them certifying the role, that will help in terms of being able to identify any shortcoming, or an error, or even if we just have a question. I feel more confident moving forward that they've agreed on the abatements to have that discussion in advance of certifying the roll."

Continuous improvement. I like it. But is there more we can do?

Council's List of Tactics

Councilmember Dan Barrios: "We've gone through the goals and tactics, and, obviously, they haven't been finalized. How does that fit into the bigger budget? Because we have 2 kinds of balls in the air, and, obviously, the budget determines what can be done and what can't be done, so perhaps as more tactics are added to a really tight budget, I'm worried about us not being able to accomplish what we put forth to accomplish."

City Manager Don Magner replied, "What I'll be doing as I put together a complete list of tactics for your consideration, I will be keeping the budget limitations in mind. What I'll probably do is, what my plan is to do, is to front load work on tactics that have the lowest cost."

Mayor Amir Omar added, "Most everything we had was to, like, review and discuss, and neither review nor discuss costs a whole lot of money. So, obviously, the discussion may lead to a desire to do something, but then we'd have to look at budget, and maybe we put it off till the next budget year to do that."

So, my takeaway is that the tight budget should not be a barrier to adding my own suggested tactic, "Explore the city's approach to offering economic development incentives (review balance between small and large investments, conduct after-action reviews, increase public transparency)." Not only does this fall into the low-cost bucket of "review and discuss", but it has the potential to have payback that more than makes up for any cost.

Candide

Councilmember Arefin Shamsul: "Thank you, Don, and the whole team, for bringing another budget. Looks great. Lots of numbers...This budget is great. Last year's budget was even wonderful. Previous year was great. I enjoyed a lot. It's a good time to be on the council also. So, the bottom line is that, what I'm asking is that, do you see when our reserve is going to go up again?"

City Manager Don Magner answered, "Take the two biggest revenue sources. Property tax. There's good reason to believe that next year and for the next 2 to 3 years, that we will have more new construction coming online and adding to our tax rolls than we had this year...On the sales tax side, our second largest revenue source, we're being very conservative on what we're predicting now. There is evidence that large manufacturing operations in the city by this time next year, will be 10% to 15%, maybe even by recent estimates, as late as last week, maybe even 20% to 30% more ramped up than they are today...While retail sales tax is important, quite frankly, it doesn't move the needle."

In short, damn the torpedoes, full speed ahead.

Tax error in your favor. Collect $200.

Continuous improvement. It shouldn't be just a slogan in our goals.

Mayor Amir Omar: "I wonder whether or not there are opportunities for us to really kind of do some more in-depth analysis, account by account, in a way that may help us be able to find other anomalies or trends or other things that we'd look at. So more than anything, it's an encouragement to consider, if there are other technologies that we can utilize that are available today that weren't available last time, that could potentially help us."

Mayor Omar was referring to a CCAD error in the city's favor. When the error was caught and corrected, it meant that there was $3M less property tax to be collected than the city thought. How does CCAD miss a $3M error? Closer to home, how does the City miss a $3M error? Magner said that by having city accountants "going through and looking at every single abatement line item", two more errors were subsequently caught, but unfortunately after the CCAD rolls were locked. Going through ginormous spreadsheets and databases looking for anomalies is not something humans are particularly well-adapted for, but it is just the kind of task that AI can do very well. I think the Mayor is spot on suggesting we explore new technologies to review tax rolls for errors, so we can catch future errors and catch them early.

Again with the Water

Mayor Amir Omar: "The other thing I want to double down on, I think Mayor Pro Tem Hutchenrider was kind of all over it, and I do really do appreciate your candor on the water side of the discussion. But as as I said during the discussion when [NTMWD] were here, what they're considering water conservation is a pittance to what any other water district would ever consider water conservation. And so, I do think that perhaps pushing on that, especially the point that our city manager made related to that water conservation goes a lot further to helping us with future rates than just about anything else. And so, you know, my hope is to sharpen that conversation with them quite a bit more as we get into it, because to the point that a few people made, that rate hike was just, you know, it's just untenable, and it keeps compounding, which makes it even worse."

There's that fighting spirit that we need. I'll reiterate my suggestion I made earlier for Mayor Omar to get some allies from other north Texas mayors to together ride herd on the water district.

I feel more hopeful about making some progress this time than I did during the tenure of Mayor Bob Dubey. When NTMWD visited during his term, I wrote ("Our New City Council Discusses Water"), "Dubey concluded with, 'They're doing a great job.' If the job is supplying water, I'd agree they are doing that. Great. If the job is to supply water at rates growing no faster than people's incomes, then NTMWD isn't doing a 'great job.' Maybe the problem is that Dubey hasn't told NTMWD (or us) what he's asking NTMWD to do. Dubey's blasé attitude risks giving citizens a false sense of security. For all that, I'd give Dubey the 'Is he living on the planet Mars?' award, except that if he were on Mars, he'd know the importance of water."

Then, days before the 2025 election that turned Mayor Dubey out of office, he and the rest of the City Council appointed a replacement for Richardson's representative to the NTMWD. I was unimpressed ("Council Recap: A Crony for NTMWD"). A few people criticized my judgment, saying that the pick's accounting background is exactly what's needed to bring change to NTMWD's way of doing business. Now that it looks like Richardson has a mayor interested in doing just that, maybe our new rep can deliver some results at NTMWD that'll change my mind about the wisdom of picking him. Maybe the council should call him back to explain to us how he's doing in Wylie.

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Quotes have been lightly edited for clarity and brevity.

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"Magner's confident,
yet the slide behind him frowns.
Which face do we trust?"
— h/t ChatGPT