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 county’s final numbers could change the outcome.

Staff proposed a mix of cuts and reprioritized spending to close part of the shortfall. Notable proposals included reducing municipal court dates to twice monthly (saving about $22,000), cutting employee appreciation and nonessential awards, pausing the July Fourth event (saving staff overtime and related costs), and removing the $9,000 line for Fiesta medals. The manager said many departmental line items had been pared to “bare bones.”

Council discussion highlighted a mix of operational and capital choices. Councilors and staff discussed moving the pool replastering ($75,000) from operating to capital to avoid adding to the operating deficit; several council members indicated support for that move if the council keeps the pool open next year. The manager said replacing pool plaster could be treated as a capital item and moved from operating to capital if council confirms priorities.

Members also pressed staff on public-safety needs and training mandates. Dr. Caldera warned of new training requirements from recent legislation (including major provisions described by staff as the Uvalde Strong Act) and said training and overtime to meet those mandates could add roughly $10,000 or more for police and fire depending on final rules. She also noted personnel costs were modeled with a roughly 5% overall increase and an assumed 14% rise in health insurance premiums (a national estimate pending insurer quotes).

Ambulance procurement and capital timing drew sustained attention. Chief and staff reported the city has already purchased a chassis and is awaiting the ambulance box; current delivery lead times for ambulances can be long. One staff estimate in the meeting said “600 days” for delivery after ordering; staff recommended committing to a future purchase window to secure production-line placement and suggested the council consider setting aside funds from reserves for the next purchase.

Several councilors and staff discussed the city’s red-light camera fund and a sudden midyear drop in citations and payments. Dr. Caldera said the camera program had taken an unexpected hit in revenue that required drawing down reserves and that the red-light camera fund’s reserve would fall to roughly $329,000 if current trends continue. “You’re going to have to take that from your reserve amount,” she said, adding the long-term plan should shift salary costs out of the program as the camera contract approaches its end in the 2030s.

On smaller but visible items, the council discussed the proposed Veterans Memorial monument and differing estimates. Staff presented a base estimate near $14,000 and noted some past estimates and concept options were as high as $24,000; councilors asked staff to bring the memorial back for a focused discussion at the July 1 retreat so they could agree on scope and funding placement (reserve vs. operating).

Donor and program-specific lines were raised in other discussions: a $20,000 donor (Samir Shehadi) had earlier been designated to a dog-park fund; staff and council members agreed to ask the donor whether the $20,000 could be reallocated to additional library materials or to support animal shelter/kennel improvements; the city manager said she would contact the donor and, if the donor agreed, prepare a contract amendment.

No final budget adoption occurred: the workshop was informational and preparatory. Dr. Caldera said the council will receive updated figures after the county’s July valuation release and that staff will return with refined numbers at future meetings; formal budget adoption is scheduled later in the summer. Council members directed staff to return with clarifications on several items (library materials and donor allocation, veterans monument options, ambulance procurement timing, and updated insurance and no-new-revenue calculations) and scheduled continued budget review on July 1 and a final hearing in August.

The workshop included extensive line-item review by department; staff provided detailed backup for revenues, personnel costs, special funds (crime control, red-light cameras, enterprise water/sewer), and proposed capital spending. Councilors repeatedly emphasized the tradeoffs between preserving services, using reserve funds for capital items, and the possibility of adopting the county no-new-revenue rate or a higher tax rate to close the remaining gap.