Leon Valley staff outline FY2026 budget with $350,000 shortfall; council weighs tax, cuts and capital priorities

City Manager Dr. Crystal Caldera presented the City of Leon Valley’s proposed fiscal year 2026 budget Thursday, telling the City Council that, with the tax rate held at 0.48, the city currently faces an operating shortfall of about $350,000 and that the final picture will depend on the county’s July property valuations.

“Your capital reserve fund is sitting at 5,200,000.0. Your emergency fund is sitting at 1.2,” Dr. Caldera said, summarizing reserves, and later added: “So you are short currently at a deficit of 350,000.” The manager said estimated operating revenues are about $14.6 million and that expenditures (after removing capital items) exceed that amount, leaving a gap staff recommended addressing by cuts or a possible increase in the tax rate.

Dr. Caldera told the council the city is modeling the budget using the current tax rate and will revisit the numbers in July when the county publishes the no-new-revenue rate. “We always, at minimum, recommend that you adopt, at minimum, your no new revenue rate,” she said, noting the council could choose to keep the rate at 0.48 and cut programs or adopt a higher rate if necessary.

Officials identified the cause of revenue pressure: a total market-value decrease of about $46 million in the city’s tax base, with multifamily residential properties accounting for roughly $31 million of the loss. Dr. Caldera said projected ad valorem tax growth for the year is $167,000 but that appeals and the…