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Seguin council adopts five-year capital and financial forecast amid warnings of potential deficits if all requests are funded
Summary
Council approved a five-year capital improvement and financial forecast that includes requested staffing and capital items; finance staff cautioned the forecast shows potential multi-year deficits if every requested position and project is funded, and described assumptions used in the plan.
The Seguin City Council approved a five-year capital improvement and financial forecast for fiscal years 2025–2029, a planning document staff and bond analysts use to identify long-range revenue, staffing and capital needs.
Finance director Susan (presented the forecast) said the document is a dynamic planning tool that includes positions requested by departments and projects under consideration; she emphasized that the forecast assumes full funding of all requests and therefore shows scenarios with projected shortfalls in later years if every item is adopted without additional revenue. Susan told council she modeled a baseline tax rate of $0.5125 per $100 of assessed value, a 7.5% annual tax base growth assumption and conservative year-over-year increases in building permits and sales tax.
Staff described assumptions used in the forecast: a 7.5% tax base growth rate, a 98% collection rate, a 2½% annual increase in building permits, 7% growth in sales tax in the assumptions (noting actual results have been higher), and salary and benefits increases built at 5% annually with health insurance at 7.5%.
Council and staff discussed scenarios if every position request were approved. Susan said that if all requested positions and capital items were funded the model shows a cumulative impact that could produce multi-million-dollar shortfalls in later years; she presented a modeled example showing potential tax-rate increases in cents per dollar equivalent if the city covered all requests. Council members and the city manager noted the forecast is intentionally conservative and that the budget process will vet requests and prioritize within each single-year budget.
The council approved the forecast by motion; Council member Carter moved, Council member Reyes seconded, and the motion carried.
Staff said the forecast will be published to the city’s transparency pages and that follow-up budget work will incorporate vacancy savings, phased hiring and other measures to avoid the worst-case scenarios modelled in the forecast.
