City faces budget crunch as revenue projections plummet

In a recent government meeting, city officials discussed the challenges of finalizing a budget that must be submitted by August 1, despite uncertainties surrounding the city's no-new-revenue tax rate. The city has received its certified appraisal roll, revealing a significant drop in appraised value from an estimated $2.4 billion to approximately $2.1 billion, largely due to homestead exemptions and numerous appraisal protests. This decline is expected to impact the city's revenue projections, potentially raising the no-new-revenue rate to between $0.55 and $0.56.

City Manager Dan outlined the proposed budget, which includes a 3% cost-of-living adjustment (COLA) and a 2% merit increase for employees, alongside requests for 40 supplemental items and 24 new positions from various departments. However, the budget currently accommodates only five new positions, including a legal assistant and a patrol officer, reflecting the city's financial constraints. Public Works had requested 16 new employees, but funding limitations have made it impossible to fulfill these requests.

The discussion also touched on the city's participation in the Texas Municipal Retirement System (TMRS) updated service credits, which would require an additional $400,000 in the budget. This item has been temporarily removed due to the recent appraisal data, although officials expressed a desire to revisit it in future budgets.

Council members expressed concerns about the implications of the budget cuts on city services and employee morale. The need for careful financial management was emphasized, with officials acknowledging the necessity of \"penny-pinching\" to maintain essential services without raising the tax rate. The meeting concluded with a commitment to prioritize employee benefits and explore potential future funding options, including the possibility of a bond package to address capital projects and equipment needs.