Henderson Finance Director Joey Fuqua presented the FY 2025-26 proposed budget of $54.5 million to the City Council Monday. The balanced budget means that no tax increase will be called for, but the city will have to dip big into its fund balance – to the tune of $4,058,000.
Fuqua called the budget “conservative” and “really challenging,” indicating that he had to deal with a shortfall of about $880,000.
In broad terms, increased salaries that outpace revenues from proposed development are a big reason for the shortfall, and Fuqua said the city implemented savings strategies in January to help as much as possible. The total budget – 54,517,011 – represents a very conservative 1 percent increase over last year’s budget.
Facing a $880,000 shortfall, Fuqua turned to cost-saving measures in January 2025 to help stem the tide. He also turned to the city’s department heads to look for savings.
“Police and fire collectively were able to come up with $300,000 in savings within their budget,” Fuqua told WIZS Monday. The rest of the savings came from across other departments, further chipping away at the shortfall.
Those cost-saving measures and a healthy fund balance are what enabled Fuqua to keep the current tax rate.
Water and sewer rates will be going up, however. Water rates will increase 13.5 percent over the next two years. Sewer rates will rise by 7 percent over the next two years.
Property tax and sales tax are the city’s primary source of revenue. In Fuqua’s presentation to the Council, he said collections are pacing ahead of last year’s total as of April. Tax collections have remained essentially even to 2024 at 97.26 percent.
He said he did question some numbers coming from the county’s tax department, adding that he expected some of those figures to be adjusted in the city’s favor.
Projected increases in the tax base are just that – projections. And Fuqua told Council members several times during his presentation that the city needs to grow – in population to create new taxpayers and in development to increase the tax base.
“We are not being saved by development because we aren’t having development,” he said. Simply put, until the city can afford to pay for services like public safety and more, the tax rate will not be going down.
“.65 is the rate that would be necessary to pay for the salaries that the city has arrived at over a number of recent years,” Fuqua explained to WIZS Monday night after the meeting concluded. “We’re on the hook for those that hit the bottom line…when you factor in those salary levels and all the fringe, .65 is what’s going to pay for it. We don’t have other forms of revenue to supplement what we have to do to make that mark.”
The City Council has scheduled its first budget work session for May 19 at 6 p.m. The new budget must be adopted by July 1, 2025 when the new fiscal year begins.
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The Henderson City Council will meet at 6 p.m. on Monday, May 12 for its regular monthly meeting. Items on the agenda include presentation of the 2025-26 city budget and a discussion of water and sewer rate increases.
Henderson Mayor Melissa Elliott has announced a special called meeting set for 5 p.m. as well, to discuss a personnel matter, according to information from Clerk Tracey Kimbrell. Water and sewer rates have remained the same for six years, and results of a study were presented to Council during a September 2024 work session. The study concluded that a significant adjustment to the water rates was needed, while a less substantial adjustment to the sewer rates was also required. The Council is expected to act on the resolution to increase the rates.
Anyone wishing to address the Council must do so in person or submit questions/comments to the City Clerk by 3 p.m. on the day of the meeting.
Join the Zoom Meeting at the following link:
https://us02web.zoom.us/j/81365676350?pwd=B5woNmYx1X0G0s3VTpBOptHqPWY2eA.1
Originally written and posted on May 12, 2025
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