MARFA — The City of Marfa is proposing to significantly raise property taxes in order to pay for a $5 million tax note for more street repairs and the installation of new smart meters — automatic water meters — across town. The percent tax rate increase from last year is 69.52%. Last year’s tax levy was just over $1 million. This year the city is proposing to bill taxes at $2 million, a 77.5% increase in tax dollars.
The city took out a $3 million tax note in 2023, which it used to pay for a total overhaul of five streets targeted for repair by city staff. But council members acknowledged recently there are still several streets that need to be addressed, requiring an additional tax note. The need for new smart meters was underscored earlier this year, when it became publicly known that there are hundreds of inoperable water meters across the city — resulting in some customers paying for all of the water that they use while others with inoperable meters pay a minimum fee.
Mayor Manny Baeza presented a draft version of the 2025-26 budget last week, and council members are set to meet for several subsequent budget workshops and public hearings on the proposed tax rate later this month. The city is currently working with a balanced budget.
The city is proposing to adopt the voter-approval tax rate, .556440 per $100 of value, the highest they can go without ordering an election. Last year’s tax rate was .328250. The average homestead taxable value was $151,810 last year, resulting in an approximately $498 annual payment with the adopted tax rate. This year’s average homestead taxable value is $134,408 — likely lower due to recently-passed legislation — and will result in an approximately $748 annual payment if the voter approval rate passes, a 50% increase from last year.
This year’s budget will raise more total property taxes than last year’s budget by $864,443, roughly the cost of the city’s annual debt payment if the $5 million tax note is secured.
The city is waiting on its 2023-2024 audit, which is performed by an outside firm and has been significantly delayed, to be completed before it can go out for the new tax note. Texas cities are required to adopt their budgets by September 29, and the city still needs to go out for bids on the tax note. City Accountant Dan Dunlap told The Big Bend Sentinel this week that the tight timeline is less than ideal. “We’re getting really close. We’re running out of weeks,” he said.
If the audit is not completed in time the city cannot take on more debt, meaning staff will recalculate the city’s Interest in Sinking (I&S) rate to match its current debt load and adopt a tax rate lower than the proposed voter-approval rate. The tax notes — the previous $3 million one and the potential $5 million one — are seven-year agreements.
In addition to new automatic water meters and more street repairs, the city is budgeting a minimum of $400,000 from the $5 million tax note in order to connect an already drilled water well to the city system, a lingering project that has been in the works for years.
The city budget currently includes a 3.5% cost of living raise for all city employees.
On the residential side, of note, in addition to higher property taxes, are increases in every utility category. City customers will see a 4.5% increase in their trash bill, per an agreement the city signed with Republic Services in 2023. At the time Republic went up on the city’s monthly bill by 39%, still the lowest bid, requiring the city to pass the cost off to its customers. The monthly meter fee for natural gas is also going up slightly.
Water and sewer bills are set to increase by 3.5% — an annual increase being driven by a water and wastewater rate study the city had performed in 2022 which concluded stagnant rates needed to be steadily raised in order to help pay for infrastructure upkeep.
A new water surcharge — an additional $4.26 per connection per month — will also be coming online this year. Presidio County took out a loan from the Texas Water Development Board (TWDB) on behalf of the City of Marfa for its participation in the Economically Distressed Areas Program (EDAP). Marfa projects include a new wastewater line for the Fort D.A. Russell section of Marfa — which has been subject to Texas Commission on Environmental Quality (TCEQ) violations and fines in the past — and first-time water and waste water service to the East Heights section of Marfa.
Of $4.6 million the county was awarded from the TWDB through the EDAP program, roughly $3 million is in the form of a grant while the remaining sum, $1.4 million, is in the form of a loan. The city will be making roughly $68,000-$72,000 payments to the county to cover the loan until 2043. The city is unable to use the I&S rate to pay for the loan, and it has to raise the money to make the loan payments.
Under the terms of the TWDB loan, the county will assume ownership of the infrastructure being constructed in Fort D.A. Russell and East Heights, but once the city’s portion of TWDB loan is paid back to the county, ownership of the infrastructure reverts back to the city.
Public hearings on the proposed tax rate and budget workshops are set to take place at 6 p.m. September 16 and September 23 at the Casner Room at City Hall.