Cibolo City council workshop weighs voter-approval tax rate to close FY26 budget gap

City staff presented the FY26 budget update at a Cibolo City Council workshop, recommending the voter-approval tax rate of 52.26¢ to close a shortfall and cover one-time expenses while keeping the city’s fund balance above the recently adopted 25% minimum.

The recommendation matters because staff said recurring revenues currently fall short of recurring expenses by about $462,000; using the voter-approval rate would allow the city to avoid a deeper draw on reserves while funding onetime items such as a local grant match for the MVCPA award, litigation costs, nonprofit grants, computer replacements and a contribution to the Schertz Library.

City staff framed the choice as a financial trade-off. “The Texas truth in taxation process is dictated by property tax code and Texas local government code,” said Anna Miranda, city staff member, while explaining certified property values and the calculations that produced the range of tax-rate options. City staff reported that Guadalupe County certified Cibolo’s 2025 taxable value at about $3.69 billion, roughly 2.6% below 2024’s certified value.

Staff said declining residential values—an average homestead decrease of about 3.8%—mean that even a modestly higher tax rate could still leave many homeowners with similar or slightly lower city tax bills than last year. At the city-proposed voter-approval rate of 52.26¢, Miranda said the impact on the average homestead would be about $14 a year; at a roughly 50¢ no-new-revenue rate, the average homeowner would see an approximate $60 annual savings from the prior-year levy because assessed values declined.

City staff broke the proposed 52.26¢ total into two components: a maintenance-and-operations portion (M&O) of about 33.8¢ and a debt-service portion of about 18.45¢. Staff estimated a general-fund levy of roughly $12.5 million at that M&O rate, and total debt service of about $8.0 million funded primarily by property taxes and transfers from EDC and street-maintenance sales tax.

Mr. Reed, a city staff member, urged council to view the budget as the council’s largest policy tool. “Your largest policy tool is the budget,” he said, listing investments in fleet, technology and employee pay that council previously approved and staff said the budget must sustain.

Council reaction was mixed. Councilmember John Meadows said, “I mean, $14 is really nothing,” indicating support for the voter-approval rate. Councilmember Sanchez Stevens said, “I’m not in favor of the $52.26,” and recommended exploring cuts first—suggesting potential targeted reductions such as pausing COLA for some executives and trimming discretionary council and event spending. Councilmember Katie Cunningham stressed the need to pair any tax increase with visible cuts: “We still have to show that we’re doing the work to cut down as much as we possibly can from every other frivolous expense or potentially frivolous expense.”

Several councilmembers—without taking a formal vote at the workshop—indicated they would support setting the voter-approval rate as the maximum for publication and for scheduling the required public hearings. The mayor and staff said the council will be asked at the Aug. 12 meeting to set a maximum tax rate (for newspaper publication) and to set public hearing dates; staff noted that a tax rate above the no-new-revenue rate requires public hearings and a 60% affirmative vote by council to adopt.

Staff identified one-time costs they proposed to fund from reserves, including a local match for the MVCPA grant (about $97,000 was cited as the match in the presentation), litigation contingencies, nonprofit grant awards, planned computer replacements (36 devices, including about 10 mobile data terminals), special events and an ongoing annual contribution to the Schertz Library (noted at $40,000). After classifying those items as one-time, staff estimated a projected fund-balance reserve of roughly 26.6–26.8% for FY26—above the council-adopted minimum of 25%.

Council asked staff to continue identifying further cost reductions and additional revenue options; Mr. Reed and Miranda said they would work with department heads to find additional modest savings and return updated numbers. Staff also agreed to deliver a bound budget book and line-item data to council before the Aug. 12 packet and to produce a detailed list of computer replacements and the enterprise lease-versus-ownership analysis for future discussion.

The workshop did not include a formal motion or final vote on a tax rate. Staff reiterated the schedule: the manager’s proposed budget will be presented Aug. 12 (no action), the council may give direction at the Aug. 26 meeting, and a public hearing and final vote are scheduled for September under the normal timeline.

For now, staff will prepare the publications and hearing notices associated with a maximum voter-approval rate and continue searching for additional expense reductions to limit reliance on reserves.