Pearland reviews FY 2026 budget scenarios; council flags fire station staffing, streets and revenue risks

Pearland city officials on Monday, April 7, 2025, held a special council workshop to review fiscal year 2026 budget development, hear mid-range financial scenarios and seek council input on spending priorities including public safety staffing, street maintenance and contingency options tied to pending state legislation.

The presentation from Rachel Winslow, Head of the Office of Management and Budget, and other city staff laid out four scenarios that vary by salary and revenue assumptions and described a new public-facing prioritization tool called Balancing Act. The scenarios include a baseline with 4% salary growth and no new positions, and more aggressive options that assume up to 6% salary and new staff to support projects such as Fire Station 7.

Why it matters: the council must finalize its FY 2026 direction while the Texas legislative session and final property valuation numbers could materially change available revenue. Council members repeatedly urged caution, noting some bills under consideration could limit the city’s tax increment carryforward and change debt limits.

City staff flagged several near-term budget pressures. Winslow told the council that an additional heavy fire apparatus received in FY 2025 requires an annual motor-pool lease fee increase of about $275,000 so the vehicle can be incorporated into the motor pool fund and replaced at end of life. Staff also said the police department is short about 10 marked patrol vehicles and three unmarked vehicles, a replacement need that the police chief estimated would cost roughly $700,000.

The council discussed options for increasing the infrastructure reinvestment fund. Staff presented proposals to add $300,000 to $500,000 annually on top of the current roughly $1.3 million for pavement maintenance, which Councilmember Chabria said would be a step toward the Pavement Condition Index goals identified in earlier reports. "I understand that we need to be lean... but how we can get a little bit closer to that gap?" Chabria asked.

On compensation, the scenarios ranged from modest (4% overall) to larger increases (6% including new positions). Councilmembers asked staff to provide intermediate scenarios (for example, a 3% and a 5% option) so they can weigh the tradeoffs before adopting the final budget.

Winslow demonstrated Balancing Act, an online scenario and prioritization tool staff plans to make available to the public in early August with the proposed general fund budget; a public-facing prioritization exercise for general and enterprise funds is scheduled for June. "The tool will be available in early August with the release of the proposed general fund budget," Winslow said, adding that user changes would not automatically alter the city manager’s proposed budget and any council changes would require council consensus.

Councilmembers and staff reviewed other revenue and program options. Staff noted the Coronavirus Relief Fund includes non-reimbursable expenses that may need coverage from the general fund and said departments are continuing to review vacancy and position needs through a position review committee to identify savings. Staff also described potential alternative service delivery options: a trap‑neuter‑return (TNR) program that would require two additional full‑time animal control officers if done in‑house but could be run by a nonprofit without recurring personnel costs; and exploration of outsourcing ‘lot milling’ to generate carbon credits.

On dedicated funds, staff and council discussed HOT (hotel occupancy tax), PEG (public, education and government) and PEDC funding. Staff said PEG funds must be used for capital outlays that directly support the PEG channel and carry a required audit trail, and that PEDC is assumed to continue contributing 20% for infrastructure projects. Staff also reported the tree trust fund balance is about $1.2 million.

Public safety staffing tied to Fire Station 7 was a recurring concern. Staff said the city will apply for another FEMA SAFER grant to help cover personnel costs; if awarded at prior typical match levels, the grant could cover a significant share of staffing in the first three years. Staff noted that if the grant is not received the city would need to consider whether to delay staffing, phase in personnel, or absorb the costs in a future fiscal year. If pursued, the station build-out would require approximately 24 personnel (15 for apparatus staffing and nine for ambulance staffing) when fully staffed, staff said.

Staff listed immediate next steps: present FY 2025 budget amendment 2 to council in May, continue to refine FY 2026 scenarios, provide additional scenarios for council review (including 3% and 5% compensation options), publish the fund-control summaries that explain restrictions for dedicated funds, and release the Balancing Act tool to stakeholders as scheduled. Council members requested staff return with clarifying scenarios and updated revenue estimates after preliminary property valuation numbers are released later in April.

The workshop was informational; no formal budget votes were taken. The council adjourned the special meeting at approximately 5:07 p.m.

Sources: city staff presentation and council discussion at the April 7, 2025 Pearland City Council special budget workshop.