The Terrell City Council on Aug. 29 approved an amended fiscal year 2025 budget, adopted the proposed fiscal year 2026 budget and set the city property tax rate at 76.42¢ per $100 valuation during a special meeting and workshop at City Council Chambers.

The council’s budget vote approved Ordinance No. 3136 (amending FY24–25 and adopting the FY26 budget) and the council later ratified property-tax actions that set the maintenance-and-operations rate at 58.42¢, the interest-and-sinking rate at 18¢ and the combined tax rate at 76.42¢ (Ordinance No. 3140). Council members chose an option in the budget package that staff said was intended primarily to increase police and fire pay and to reduce compensation compression for civilian employees.

Brian Lancaster, a reserve police officer, urged the council to raise compensation to address staffing shortages. Lancaster said, “the very first thing we look at as officer is what am I gonna have to feed my family at the end of the night?” He told the council that Terrell faces a staffing crisis in the police department and that improved pay would help recruitment and retention.

Mark Mills, identified in the meeting as the budget director, presented the packet and compensation scenarios and described five pay options. Mills told the council that the budget as presented included $1.3 million to implement a package he labeled as the option highlighted in the materials (referred to in the meeting as option 1b). On the funding constraints he said, “I do not have $2,000,000 that I have flexibility with at this time.” Mills provided staff analysis showing comparative step‑1 police pay and general fund sizes for peer cities and explained tradeoffs tied to range adjustments, steps and timing (October 1 vs. April 1 implementation).

Council discussion centered on recruitment, retention and pay compression. Mayor Ronnie Velasquez praised staff work and said the council should prioritize safety and staffing: “One thing I can tell you for sure is this, gentleman is listening to each and every 1 of you.” Several council members said they supported a compensation plan that provided noticeable increases for public-safety staff while preserving funds for parks maintenance and other priorities. Council members discussed using reserves or contingency to cover some nonrecurring costs and the possibility of stepping up additional adjustments later in the fiscal year after monthly financial reports.

Votes and motions taken at the meeting included a motion to postpone consideration of Ordinance No. 3140 until after the budget presentation (motion carried), approval of Ordinance No. 3136 (budget) by roll call, a formal ratification that city revenue from property taxes had increased due to valuation changes (record vote), and three record votes to set the maintenance-and-operations rate, the interest-and-sinking rate, and the combined tax rate. The council recorded a 4–1 vote to approve the amended budget ordinance and then voted (by roll call) to set the maintenance-and-operations rate at 58.42¢ and the interest-and-sinking rate at 18¢; the combined tax rate vote to adopt 76.42¢ passed on a record vote.

Mills told the council the FY26 general fund revenue projection is about $40.1 million with expenditures of about $40.3 million, producing a projected budgetary shortfall of about $214,000. Staff said roughly $296,000 in nonrecurring expenditures would be paid from reserves and that the total citywide budget figures in the packet were presented as approximately $118.91 million for the amended totals reported to council. Mills recommended reductions be placed into contingency or reallocated according to a staff priority list if council members directed cuts.

Council members also asked staff to continue work on a comprehensive compensation study and to return with additional detail on incentives such as signing bonuses, lateral-hire incentives, and the structure of certification pay. Sue (identified in the meeting as a staff member working on personnel/police matters) explained certification-pay practices and how those allowances are paid per pay period.

The council was told the budget item would return for a second reading on Sept. 16, as the packet on the screen had been labeled second posting because previous action had not been taken during an earlier meeting.

The meeting record shows the council adopted the budget-related motions by roll call in accordance with state law; staff said the roll-call votes were required and were recorded.

The council did not take additional formal action on hiring steps at this meeting beyond approving the budget option (option 1b as included in the ordinance) and asking staff to proceed with implementation steps and further analysis.

Looking ahead, staff will implement the budget as adopted, proceed with the schedule for compensation adjustments described in the packet (including the timing noted by staff), and return to the council with further details from the planned compensation/classification study and with monthly financial reports.