Lakeway City Council is poised to adopt its annual budget for the fiscal year 2025-2026, along with the tax rates for 2025, during a crucial meeting. City Manager provided an overview of the budget's significance, emphasizing that it reflects the community's values and priorities while serving as a flexible planning tool for the city's financial responsibilities.

As the council approaches the final public hearing on the budget and tax rate, the city faces a potential budget shortfall. If the council sets the no-new-revenue tax rate at 0.16355, it could lead to a shortfall of approximately $620,000 before considering supplemental requests, which could escalate the deficit to $1 million. These supplemental requests include a cost-of-living adjustment (COLA) of 2% and merit increases totaling 4.2%, impacting salaries by about $529,000.

The city is also anticipating savings of around $400,000 due to expected vacancies throughout the year. Other budget considerations include a proposed one-year extension of the dispatch interlocal agreement with the City of Bee Cave for $520,000, a leadership retreat for department heads costing $3,500, and a new IT assistant position at $106,000.

The council's decisions in this meeting will set the financial framework for the upcoming fiscal year, with a focus on maintaining a 30% fund balance ratio. As the council prepares to finalize these critical financial decisions, the implications for Lakeway's services and community needs remain at the forefront of discussions.