Highland Village homeowners will pay about $106 more in property taxes next year after the City Council approved the first reading of a smaller FY 2026-27 budget Tuesday, Sept. 15.

The tax rate rises from $0.500984 to $0.528541 per $100 of assessed valuation. That three-cent increase adds $377,615 to the General Fund but still leaves the city spending less overall. Total operating expenditures of $25,702,807 are 1.9% below the current year's adopted budget.

To close a funding gap, the budget eliminates four community events: Concerts in the Park, Movies in the Park, Wine Down with the Grinch and The Amazing Race. The city also suspended its intern program and nonprofit funding, froze three vacant staff positions and scaled back recreation programming and lighting upgrades.

Police and fire positions are exempt from the hiring freeze. Other vacancies will be evaluated before being filled.

The cuts trace back to a July 14 council meeting where staff identified a $2.1 million funding gap. Council trimmed that to $1.6 million at a July 21 work session by locking in the event eliminations and the hiring freeze.

"We are at a point where we need to look at things differently … We built up the fund balance to help us through this time, with the knowledge that we are unable to sustain the continued drawdown of that balance," City Manager Paul Stevens said at the July 14 meeting.

Highland Village has just over 70 undeveloped acres left, limiting new growth that could broaden the tax base. Certified property values fell 2.8% from the prior year, and sales tax revenue is projected 2.0% below last year's budgeted amount.

Despite the tighter numbers, the city's five-year forecast projects a General Fund reserve of about 34% for FY 2026-27, well above its 20%-to-25% policy target. The budget includes a 2% salary adjustment and market-rate adjustments for some positions.

During the same meeting, GIS Coordinator Carmen Oprea and Information Services Director Sunny Lindsey presented an update on the city's Community Rating System (CRS) participation. The program is expected to make flood insurance discounts available to eligible residents starting April 1, 2027.

Mayor Charlotte Wilcox announced a Town Hall meeting on Highland Village Police Department operations set for Thursday, Sept. 24, at the Highland Village Municipal Complex, 6 p.m. to 7:30 p.m.

Council will consider the second reading and final vote on the budget and tax rate Tuesday, Sept. 22. Residents can watch proceedings on HVTV (Frontier channel 43), stream live at highlandvillage.org/hvtv or view recordings on the city's YouTube channel.