Aransas Pass staff outline FY2026 operating budget; adoption set for Sept. 15

City finance staff presented a proposed FY2026 operating budget on the council dais, saying cuts and department revisions reduced a previously identified $2.5 million deficit and left the general fund slightly below the city's reserve target.

Finance Director Sandra told the council the proposed general fund operating budget for fiscal 2026 is "about $14,690,000." She said debt service totals about $3,800,000 and proprietary funds (water, sewer, aquatic center, civic center) total roughly $7,270,000. Sandra said the proposed operating budget does not include capital projects, which will come back to council separately in October.

Sandra said the proposal includes a small reduction in the city's property tax rate, and noted the state allows a 3.5% maintenance-and-operations increase under current rules. She said the general fund balance is projected at 36.8% of expenditures, "slightly below the city policy target of 40%, but still represents a healthy and responsible reserve." Sandra and the city manager also confirmed adoption of the budget and the tax rate is scheduled for Sept. 15.

The package calls for limited pay adjustments: a 1% cost-of-living adjustment for exempt employees and a 2.5% COLA for nonexempt employees. Sandra said those COLA costs total roughly $225,000. She also told council that the city will absorb a roughly 7.5% increase in health-insurance costs so employees will not see the higher premiums directly in their paychecks this year.

Department leaders walked through operational highlights and budget pressures. The police chief said the department's operating budget centers on personnel costs and listed year-to-date public-safety statistics including declines in many crime categories and totals for arrests and citations. The chief said the department expects to purchase two vehicles and electronic control devices if approved and noted some items would be paid from forfeiture/drug funds.

Fire Chief Mike said the department is staffing at captains, drivers and nine firefighters, reported roughly 280 fire responses and 469 EMS responses this year, and said the department had improved the city's ISO rating from a 4 to a 3. He outlined cuts made to meet the budget target (eliminated cancer-screening funds, volunteer program allocations, and other line items) and said the department expects to receive a Texas Forest Service reimbursement grant for a water tender that will reimburse up to about $300,000.

Public Works Director David reviewed water and sewer operations, recent pump-station and drainage projects, and proposed replacing a transfer-station position to preserve street staffing levels. He also outlined planned advertising for upcoming Wheeler pump-station work and a Jackson Place drainage project intended to help the Saunders and Beasley areas.

Councilmembers and staff discussed options the budget leaves open, including the timing of capital projects and whether further operating cuts are practical. Sandra cautioned departments already had made significant reductions and additional cuts could be difficult. The city manager and councilmembers asked staff to re-examine possible adjustments ahead of the Sept. 15 adoption.

The council did not adopt the budget at the meeting; the adoption date remains scheduled for Sept. 15.