Cibolo City staff presents $25.1 million FY26 draft general fund, warns of reserve gap as ARPA support ends

Cibolo City staff presented a work‑in‑progress FY26 general fund budget of about $25.1 million at a council workshop, outlining revenue projections, mandated costs and a projected reserve shortfall that staff asked council to consider before adopting a budget and tax rate.

City staff said the draft general fund includes roughly $17 million — about 67% of the total — for salaries and benefits and that staff continue to refine market adjustments for positions not moved to market in earlier cycles. "This year, it's a $23,000,000 budget," a staff presenter said when contrasting the FY25 adopted numbers with FY26 projections, and added that continuing market adjustments and benefit cost increases push the FY26 work‑in‑progress total toward $25.1 million.

Why it matters: staff told council the city is moving away from one‑time federal American Rescue Plan Act (ARPA) funding that supported public‑safety market adjustments in recent years. That phase‑out, combined with mandated interlocal agreement costs and rising health‑care and technology expenses, will require either use of reserves, additional revenue or spending reductions.

Key details

- Budget size and major lines: staff described a general‑fund draft of about $25.1 million with salaries and benefits at about $17 million (67%); technology maintenance is budgeted near $1 million; fleet replacement planning is set for a July workshop; and interlocal agreements (mainly 9‑1‑1 dispatch and EMS services) account for roughly $1.3 million of the budget.

- Training and capital: training and professional development were shown at about $228,000 (police and fire account for about $136,000 of that), capital replacement for computers near $118,000, PPE and uniforms roughly $300,000, and a planned $1.3 million for fleet items to be reviewed at the July workshop.

- Tax and revenue assumptions: staff explained Texas "truth‑in‑taxation" rules and said the city is budgeting conservatively for certified taxable values, normally assuming the statutory 3.5% growth cap for properties already on the roll and adding revenue tied to new construction. The council’s existing debt service tax rate was stated as 17.93¢; the total current rate shown on presentation materials was 49.9¢.

- Reserve level and the shortfall: the FY26 draft showed a projected ending unrestricted general‑fund balance of about $5.1 million (roughly 23.5% of recurring expenditures). Council policy adopted in 2022 sets a minimum target of 28%. Staff noted the Government Finance Officers Association (GFOA) minimum of two months of operating expenses (about 16.67%) and offered to run a GFOA risk‑analysis worksheet to propose an appropriate reserve range.

- One‑time vs. recurring support: staff said the city used ARPA in prior years to support public‑safety market adjustments and that FY25 was the final year in which ARPA covered a material share; FY26 will rely on local dollars to absorb the remaining public‑safety full‑year cost. Presentation materials called out roughly $782,000 in additional property tax revenue tied to the prior tax action (Prop C) and an estimated full‑year public‑safety cost of about $1.1 million; staff said part of that difference was covered from other general‑fund sources in FY25 and that the FY26 budget must absorb the remainder.

Direction and follow up

- Council asked staff to return with more granular materials and clarity for the public on how the additional property‑tax revenue was allocated and to run a risk‑based reserve analysis. Staff scheduled more budget workshops: a market‑adjustment update and fleet presentation on July 8, a tax‑rate and budget workshop in early August, city manager’s proposed budget delivery in August and the public hearing and adoption in September.

- Staff noted FY26 base budget did not yet include non‑public‑safety market adjustments (those will be presented after the HR market study), a performance pay pool, or the potential local match costs if grants (such as SAFER or others) are awarded.

Context and caveats

Staff emphasized the draft numbers are a work in progress and that revenues and expenses will be refined as certified property values and additional data arrive. Presenters repeatedly distinguished between discussion items (options and constraints), staff direction requests (work to return with analyses), and formal actions (none adopted at the meeting beyond direction to return with specified materials).

Ending

Staff will bring a compensation/market study update and a detailed fleet presentation on July 8 and a proposed budget for council review in August. Council members said they wanted easily digested materials for the public showing where prior tax increases were allocated and were receptive to the staff’s plan to present a GFOA‑style risk analysis of reserves.