Hondo approves budget, tax rate

By Rosanne Fohn

Anvil Herald Reporter

Hondo City Council on Monday unanimously approved the 2026-27 budget. Council also voted 5-0 to keep the same tax rate as the current fiscal year of 48¢ per $100 valuation.

Chief Financial Officer Chris Hill said the 2026-27 budget will raise $174,619 (6.9%) more revenue from property taxes due to new property added to the rolls. The new budget goes into effect Oct. 1.

The average homestead tax value in Hondo in 2025 was $191,116. The 2026 value increased 3.65% to $198,083. Tax on the average household will increase $33.44 (3.65%).

Thirty-two cents per $100 valuation will go to maintenance and operations in the General Fund. The Interest and Sinking Fund will receive 15.6¢ per $100 valuation.

Without a surplus in the Airport Fund of $792,745, revenues and expenditures for fiscal year 2026-27 balance at $29,613,487.

Citizen comments

Two citizens spoke about the budget during the citizens to be heard section of the meeting.

George Adams spoke out against the five-consecutive-year water and sewage rate increases proposed in the budget. In 2027 and 2028, the water/sewer rates will increase by 11.75% followed by 10% increases in 2029, 2030 and 2031. 

“I am against the rate increase because I believe it is time for the city to break its cycle of excessive spending from the General Fund, followed by high transfers from the utility, followed by high utility rates. How much lower could rates be if transfers were reduced by 10% each year or 15% or 20%? I don’t think you should accept any rate studies that don’t account for reduced transfers over time,” he said.

At the summer budget workshop, City Manager John Naron explained that the city had a five-year plan in place to incrementally increase rates before the COVID-19 pandemic; however, the city did not follow through with those rate increases when the economy was reeling during COVID.

This year the city hired NewGen Strategies & Solutions to examine the water and sewer rates and propose a new five-year plan. “In short,” the company’s report stated, “current rates are not sufficient to sustain the utilities over the [five-year] planning year. Without adjustment, the city would be unable to meet its debt service coverage and reserve requirement and would deplete its utility reserves in a few years.” 

Chavel Lopez was concerned that the city only raised the minimum hourly wage to $16.15 instead of the $17-an-hour wage he proposed.

All city employees are receiving a 3% raise with the new budget.

The next Hondo City Council meeting is scheduled for 6 p.m. Monday, Oct. 12, at city hall chambers.