The Town of Herndon is planning to maintain its current tax rates in the new fiscal year, but residents should still brace for increases in their property tax, water and trash bills.
Town Manager Dan Hoffman officially submitted a proposed fiscal year 2027 budget to the Herndon Town Council yesterday (Wednesday) that holds local real estate, lodging and meals taxes at their existing rates of 27 cents per $100 of assessed value, 6% and 4.5%, respectively.
However, real estate assessments for the fiscal year, which starts on July 1, are expected to climb by 5.43% for residential property owners, while dipping by 1% for commercial properties, resulting in an overall increase of 3.1% that will generate $472,000 in additional revenue for the town.
Herndon had raised its real estate tax rate by 1 cent for the current FY 2026 — its first rate increase since 2011.
Despite that anticipated uptick in revenue, town staff took a conservative, “disciplined” approach to proposing spending, as inflation, rising personnel and infrastructure costs, and other economic impacts continue to drive up expenses for providing “the base level of services and programs to the community,” according to budget documents.
“This budget reflects our commitment to being responsible stewards of public resources while planning for the long‑term needs of our community,” said Hoffman, who is overseeing his first budget since joining the town last November. “We remain focused on maintaining a strong, sustainable financial foundation for the Town while continuing to serve our residents.”
Higher water and sewer rates proposed
The draft budget also relies on sizable increases of 20.9% for the town’s water rates and 10.1% for sewer rates, increasing the average customer’s quarterly bill by $29.80 over FY 2026. The proposed changes are:
Water Bill
- Quarterly service charge (5 or 8-inch meter): $27.61, up from the current rate of $21.24
- Base rate: $5.63 per 1,000 gallons, up from $4.79
- Peak rate: $9.58 per 1,000 gallons, up from $8.15
Sewer
- Quarterly service charge: $19.94, up from $15.95
- Base rate: $10.42 per 1,000 gallons, up from $9.64
According to the budget plan, the higher rates are needed to address climbing sewer treatment and wholesale water costs, and to fund extensive system repair and improvement projects.
“The age of the system, combined with the need for additional capacity to support future demand, is driving the need for a major capital project plan over the next few years,” the budget says, estimating that water and sewer projects will cost $146 million over the next five years.
Projects currently on the docket include water main replacements and design work at Dulles Park, Monroe and Nash street, construction of a water booster pump station, capacity increases for Elden Street and Herndon Parkway, and sewer main lining and manhole rehabilitation.
While some projects are being funded by remaining American Rescue Plan Act money, the town hopes to obtain funding from bond sales to cover approximately 60% of the costs, an approach that will help “spread the costs of these projects over many years and mitigate the short-term burden to water and sewer customers.”
New trash rate established for multifamily residences
As part of the new budget, the Town of Herndon is planning to overhaul its solid waste program by introducing a separate fee for five multifamily residential properties.
Currently, all single-family, duplex and townhouses receive weekly trash and recycling collection services for $21 per quarter or $84 over a year. Under the proposed FY 2027 budget, single-family homes would see their rate go up to $30 per quarter, while multifamily properties will be charged $51 per quarter.
“The proposed rate increases and the establishment of the multifamily rate ensures adequate cost recovery of rising landfill charges,” the budget says. “No other significant changes to other fees like development and building fees are included as part of the proposed budget.”
When combined with $250,000 more from business license taxes than expected so far this year, the $82,000 in additional revenue that the new rates will generate enables the town to allocate more money to other priorities, Hoffman told the town council during a work session after its March 24 meeting.
Hoffman recommended using the $332,000 to fund a new full-time project coordinator position for his office, support the town’s urban forestry program and increase compensation employees. He also suggested additional funding for the economic development office as an alternative, specifically for a market study that will be conducted as part of the Herndon 2050 Plan.
“We probably would not use it for tree planting, because most of our cuts came out of the trimming and removal category, and we’re pretty thin there,” staff said at the work session when asked how the additional urban forestry funding would be used.
In an initial March 3 presentation on the budget, Hoffman told the town council that funding for tree maintenance and removals would need to be reduced by $340,000, and the urban forestry team would need to rely on grants to fund new plantings.
The budget document doesn’t break down proposed spending by line items, but the Department of Community Development’s goals for FY 2027 include planting at least one tree for every one that needs to be removed and implementing an Urban Forestry Management Plan that will be adopted by the end of this fiscal year on June 30.
The proposed budget gives employees a 1.5% market rate adjustment — up from the 1% that Hoffman initially proposed in early March. With performance-based raises averaging an increase of 2.25%, regular employees would see an overall increase in compensation of 3.75% on average.
The budget also accommodates a 15% increase in healthcare costs.
Expenses are also being driven by transportation improvements, infrastructure replacement, and other capital projects; funding for events like the Parks and Recreation Department’s Polar Heat on Lynn Street festival, which was introduced last year as part of its 50th anniversary celebrations; and $200,000 for a community donations program to support local nonprofits.
The full proposed budget can be found on the Town of Herndon’s website. Public hearings will be held in the town council’s chambers at 765 Lynn Street on April 14 and 28.
