The City of Leon Valley City Council on Aug. 5 gave staff direction to post a proposed fiscal‑year 2025–26 property tax rate of 0.51504 as part of a budget that still shows a roughly $47,000 operating shortfall under current assumptions.

City Manager Dr. Crystal Caldera told the council the city’s certified valuations fell, driven mainly by appeals at multifamily properties, and that the county-calculated “no new revenue” tax rate is about 0.50. Caldera said that keeping the rate at 0.48 would leave the city with a much larger deficit. After discussion, the council voted 7–0 to recommend the 0.51504 preliminary rate so staff can publish the required notices and continue refining the budget.

Council members and staff highlighted several competing priorities behind the numbers: more than $6.8 million in reserves, requirements to replace aging equipment, and one‑time capital needs the council has discussed previously. Caldera said reserves (about $6.8 million after an earlier increase) fund capital needs like an ambulance replacement, radio equipment and a possible pool repair; she also noted roughly $1.2 million had been recently added to those reserves.

In the operating budget, staff reported roughly $380,000 of expenditure reductions compared with last year, but personnel and health insurance costs increased and constitute the largest single expenditure category. Caldera said the recommended personnel adjustments average 2.6% but are applied unevenly across employees. She emphasized the $47,000 gap can be closed either by a roughly half‑cent additional increase to the rate (to about 0.510135) or by additional cuts to specific line items.

Councilors pressed for tradeoffs and asked staff for targeted adjustments. Councilor Benny Martinez (resident commenter earlier in the meeting) and several councilors urged protecting public safety and essential services; Councilor Philip Campos recommended a modest compromise above the no‑new‑revenue rate to preserve repair and maintenance lines. After debate the council agreed to direct staff to publish notices consistent with the 0.51504 rate and to bring back the formal tax‑rate hearing and final budget adoption in September.

The council and staff also discussed longer‑term planning: whether to earmark portions of reserves for known capital projects such as radio replacements, the pool, and a future ambulance; how much of reserve should remain as operating cushion (staff described the current reserves as roughly 5–5.5 months of operating cash); and whether special events like the Fourth of July could be sustained without drawing on reserves. Caldera recommended using reserve dollars only as a one‑time funding source for large special events if the council chooses to continue them.

Next steps: staff will publish the statutorily required tax‑rate notices and return at the Sept. 2 meeting for the public hearing and formal vote on the rate and budget. Council members said they expect more line‑by‑line discussion before final adoption.

Ending: The council’s direction sets a path to a narrowly positive operating result under the current proposal, but members emphasized the city’s limited flexibility and asked staff to return with options to close remaining gaps without eroding capital reserves.