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Lago Vista council reviews balanced FY2025–26 budget, uses $0.42 tax-rate baseline
Summary
Councilors reviewed a balanced FY2025–26 budget that uses a $0.42 tax-rate baseline, trims transfers from the utility fund, raises the golf subsidy and proposes modest employee cost-of-living adjustments while preserving staffing levels.
Lago Vista City Council members reviewed a proposed fiscal 2025–26 budget that the city manager said is balanced on a $0.42 tax-rate baseline and includes targeted transfers and staffing adjustments.
City Manager Charles West told the council the budget is balanced. Councilors and staff discussed reducing the utility-fund transfer to the general fund, supporting the municipal golf course, and modest pay adjustments for employees.
The draft budget reduces the planned transfer from the utility fund to the general fund from about $3.6 million in prior projections to $2.9 million in the current draft. Council members urged staff to consider reducing that transfer further; one council member suggested lowering it to $1.0 million so more utility reserves could be preserved for capital projects. The draft raises the annual transfer to support the golf course to about $350,000 to reflect current revenue expectations.
Staff proposed a 3% cost-of-living allocation for department heads and targeted 5% adjustments for hourly employees as a way to address inflation without automatic across-the-board raises; the city manager said the details could be administered as merit, COLA, or a hybrid. West said staff did not propose employee layoffs and that some vacant or planned positions would be deferred. He also noted a new development services director will start Oct. 6.
Council and finance subcommittee members discussed using excess utility fund balances to build a capital improvement (CIP) reserve to pay for water, wastewater and drainage projects rather than moving large sums into the general fund. Finance and staff said they are keeping reserves at levels intended to protect the city's credit position while exploring shared allocations for staff who work across funds.
The council set a final budget and tax-rate workshop for Sept. 25 to finalize the FY2025–26 numbers and the proposed 0.42 tax-rate baseline.
Ending: Staff said the budget will return for final action at the Sept. 25 meeting; councilors instructed staff to provide more detail on proposed transfers to the CIP and scenarios for employee pay adjustments.
