La Marque — The La Marque City Council on Sept. 25 adopted the city’s annual budget for fiscal year 2025–26 at the existing tax rate, then separately approved a 2-cent increase that council members said will be earmarked exclusively to cover short-term debt obligations while the city stabilizes finances.

Council members and staff framed the move as a time-limited measure to preserve the city’s credit and obtain short-term financing while auditors and managers work through prior years’ irregularities. “We saved $936,221,” City Manager Holly said during the presentation, and council members said that, together with other steps and one-time revenue prospects, the 2-cent increase will show lenders the city is taking steps to shore up reserves.

Why it matters: Residents packed the meeting to press council on a months-long fiscal controversy that includes a late audit, contested accounting for millions of dollars and repeated calls for a forensic review. Speakers said they fear repeated tax hikes if the city does not first identify where money was spent or lost. Council members said they balanced those demands against the practical need to keep the city operational and preserve its borrowing capacity.

What council did: The council first voted to adopt the operating budget that staff presented based on a 39-cent tax rate (the same base rate used the prior year). After debate, the council then voted 3–2 to set a revised tax rate that increases the ad valorem rate by 2 cents; the additional revenue from that 2-cent increase will be dedicated to short-term debt service. The council later amended the adopted budget so that the new 2-cent increment is assigned to debt service only; the amendment passed on a roll call (three yes, one no, one abstention).

Public concerns and staff response: Dozens of residents urged the council to hold off on raising taxes until a forensic audit or state review clarified where prior revenues were spent. In public comment, Delon Delaproz said, “I do support the tax hike,” arguing additional revenue is needed for city services and growth. Others called for more transparency and a forensic review; resident Brian Getchas urged a forensic audit, asking, “If anyone in here doesn’t think $4,000,000 shortfall deserves a forensic audit, what are we thinking?”

Residents repeatedly pointed to police overtime and other public safety spending as driver(s) of cost increases. Citizen Haley Winkelman presented a calculation she said showed the police overtime budget was roughly $787,992 over the allocated budget over recent years and asked why the city did not hire more officers instead of paying overtime. Police Chief Aragon said departments had scrubbed nonessential line items and that the department’s most recent cuts totaled about $314,350; he also described hiring freezes and the use of grant-funded positions to mitigate costs.

Staff and expert briefing: Interim finance and administrative staff presented details showing the general fund shortfall and the enterprise fund imbalances. Holly said the council and staff had cut roughly $936,221 from the proposed expenses and recommended a modest tax increment (the council settled on 2 cents) to protect the city’s credit while short-term financing and one-time receipts are pursued. Worth Ferguson, the city’s finance consultant, described his qualifications and the ongoing review he’s conducting: “I spent over six years working for the Texas State Auditor’s Office,” he told the council, and he said a multi-year review would take time but that staff will provide progress reports.

One-time and short-term measures discussed: Council members and staff described several nonproperty-tax options being pursued to improve the cash situation, including (as discussed at the meeting) a possible Economic Development Corporation (EDC) loan of $1.5 million, anticipated proceeds from a railroad settlement of about $1.3 million, FEMA and other reimbursements, and other asset-sales or short-term borrowing. Staff described the tax increment as a bridge until property tax receipts arrive and until the short-term financing is in place.

Outcome and immediate next steps: The council’s motions were:
- Adopt the FY 2025–26 budget at the existing base tax rate (accepted by council). The adopted budget reflects the cuts staff reported and the baseline 39-cent rate.
- Set the city’s tax rate to include an additional 2 cents, with the maintenance-and-operations portion adjusted to 0.311749 and the interest-and-sinking portion remaining 0.115253; the 2-cent increment will fund short-term debt service and is not allocated to general operating expenses.
- Amend the adopted budget so the 2-cent increase is dedicated to debt service; staff will return with written documentation and reporting as the financing is pursued.

Council members said they will continue to provide written progress reports and asked the finance consultant to prioritize audit and reconciliation work requested by council. Several council members urged prompt public reporting of audit test work and results.

What council did not do: Council members did not adopt a permanent higher tax rate for general operations, and they did not authorize any new large capital projects with the added tax increment. Several residents’ calls for an independent forensic audit were not resolved at the meeting, although staff and the finance consultant said they are conducting multi-year reviews and would present findings as they become available.

What to watch: Staff said they will provide monthly updates on cash balances and on reconciliation work; the finance consultant said sections of the multi-year review will be released as they are completed. Council also signaled intent to form a finance committee to provide additional oversight and to help develop a multi-year fiscal plan.

Ending: The council’s 2-cent decision is framed as a short-term, credit-preserving step while audits, reconciliations and potential one-time receipts move forward. Residents at the meeting pressed for faster public reporting; several council members agreed to publish more frequent financial updates and to schedule additional public briefings as details emerge.