FULSHEAR, Texas (Covering Katy News) — Fulshear city leaders are proposing a fiscal year 2027 budget that would continue investing in the infrastructure needed to support the city's rapid growth while relying on cautious revenue projections despite stronger-than-expected financial performance this year.
The proposal includes more than $332 million in capital improvements over the next five years, with major investments planned for streets, wastewater systems, drainage, parks and other facilities as one of Texas' fastest-growing communities continues to expand.
Finance Director Angela Alvarado told City Council during a July 7 budget workshop that staff intentionally prepared the budget using conservative revenue assumptions even though the city expects to finish fiscal year 2026 in a stronger financial position than originally projected.
"It's my belief that this is truly a good reflection of where we are," Alvarado told council members.
Infrastructure remains the city's biggest investment
The proposed five-year Capital Improvement Program calls for approximately $332 million in infrastructure spending through fiscal year 2031. Much of that investment is designed to expand public infrastructure before growth outpaces city services.
The largest planned investments include:
- Wastewater infrastructure: approximately $126 million
- Street improvements: approximately $94 million
- Facilities and parks: approximately $46 million
- Drainage projects: approximately $23 million
Other planned projects include improvements to the city's water system, fleet, technology and other public infrastructure. The capital plan also includes projects such as the Eastside Tributary Drainage Project and the Katy-Fulshear Lift Station expansion, which city officials said are needed to accommodate continued residential and commercial growth.
Strong finances allow city to plan ahead
While this year's revenues have exceeded expectations, Alvarado said staff deliberately avoided assuming those trends would continue indefinitely.
Sales tax collections, permit activity and other development-related revenues have outperformed earlier projections, helping the city finish the current fiscal year with higher revenues and lower expenditures than anticipated. However, she said development activity will eventually become less predictable as the city matures.
"We are showing a balanced budget. In fact, we have a surplus," Alvarado said, noting the city's projected ending fund balance remains well above the policy minimum.
Rather than expanding ongoing operating expenses, the city plans to use excess fund balance for one-time capital projects.
"We're using one-time money for one-time projects," Alvarado said, explaining that the approach helps avoid creating recurring expenses that could strain future budgets.
Property tax discussion continues
Council members also discussed the proposed property tax rate during the workshop.
City staff said much of the anticipated increase is tied to debt service for the voter-approved parks bond rather than increased day-to-day operating expenses. Council members requested additional historical tax-rate comparisons before continuing budget discussions.
Budget process continues
City Manager Zach Goodlander reminded council members that the July workshop was only the beginning of the annual budget process.
"There will be a standing agenda item on each one of the regular council meetings now until September," Goodlander said, noting the proposal will continue to evolve as staff receives updated financial information, including the certified tax roll.
The City Council is scheduled to continue discussing the preliminary fiscal year 2027 operating and capital budget during Tuesday night's regular meeting. Additional workshops, public hearings and final budget adoption are expected later this summer.
The City Council will continue reviewing the proposal Tuesday night as the budget moves through the public review process. Covering Katy News will report on any changes approved or discussed during the meeting.
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