Mineral Wells — City Manager Jason Weeks presented the proposed fiscal year 2026 budget at a council workshop, saying staff focused the plan on “getting back to the basics, and focusing strictly on public safety, our infrastructure, communications, transparency, and technology.” The proposed budget does not include a tax-rate increase and instead uses the voter approval rate; the presentation projects $57.3 million in total revenue and $61.4 million in total expenditures across all funds for FY2026.

Why it matters: Weeks warned the council that while the proposed FY2026 budget would leave the general fund above the city’s 25 percent policy (ending at 28.8 percent, or about 104 days of working capital), long-term projections show the general fund and other funds slipping into deficits in later years unless the city adopts additional revenue measures or cuts. The city is proposing no across-the-board salary adjustments in the adopted budget now and is holding potential personnel adjustments for midyear if audited revenues allow.

The most important facts first: the proposed FY2026 general fund budget includes $19 million in revenues and $20 million in expenditures, producing the 28.8 percent ending fund balance in the short term. Weeks told the council that the city’s prior-year estimates overstated revenues, leaving the audited FY2024 ending balance at $8.1 million rather than an estimated $10.4 million and contributing to an effective $2.2 million shortfall versus previous expectations. Weeks said the council had approved roughly $2.9 million in supplemental decision packages last year, about $500,000 of which are recurring costs such as new police and fire assignments, and those approvals have materially reduced available reserves.

Key revenue and cost drivers: Weeks described property tax revenue rising because of higher assessed values even as the rate slightly declines; he estimated the average homeowner following the proposed rate would see approximately a $21.53 change next year. Sales tax remains a major revenue source; the city’s total sales tax rate is 8.25 percent with the state taking 6.25 percentage points and the remainder split among the city, its economic development corporation and county allocations. The city budget factors in a one-time $1 million sale of the post office in the prior year and the end of a $426,000 SRO cost-sharing arrangement with Mineral Wells ISD, both of which reduce the base of carryforward revenue for FY2026.

Expenditures are concentrated in public safety and streets. Weeks noted that fire and EMS represent 23 percent of general fund expenditures, police 25 percent, and streets 17 percent — together 65 percent of the general fund. Personnel costs are 64 percent of general fund expenditures; the proposed budget adds four general-fund full-time equivalents (including an IT support specialist and three firefighters pending a SAFER grant) but does not include general salary increases in the baseline proposal.

Fiscal controls and next steps: Weeks described multiple management actions intended to improve fiscal discipline, including a new purchasing policy, department-level access to financial software (moving Encode to the cloud), a formal vacancy review process, monthly financial forecasting with variance analysis, internal audits focused on cost-savings, and a review of the master fee schedule. He said staff will finalize audited year-end numbers after the November 30 cutoff and could return to council with midyear amendments — including possible salary adjustments — if actual revenue and expense results warrant changes.

Process and schedule: Weeks said the city’s consultant NewGen Strategies will present the water/sewer rate study at the regular council meeting on Sept. 2, and the council will hold public hearings on the FY2026 budget and tax rate on Sept. 16. He urged council members to identify any desired budget changes before the Sept. 16 public hearing to avoid triggering additional hearings under the city charter.

Ending: The FY2026 proposal aims to hold near a flat tax burden this year while restricting supplemental spending to essential items, but Weeks told councilors the long-term outlook requires additional actions — either new revenue sources or reduced service levels — to prevent deficits in the later years of the five-year projection.