Live Oak council directs staff to finalize 2025–26 draft budget, sets 3% COLA assumption

Live Oak, Texas — At a special workshop on July 22 the City of Live Oak City Council reviewed the 2025–26 draft budget and gave staff direction to finalize the working document for publication. Council directed staff to proceed using the no-new-revenue property tax posture, to present the finalized draft to the city secretary in early August, and to budget a 3% market adjustment for employee wages.

The draft presented to council showed a largely flat overall budget for the coming year, driven in part by the completion of the city’s 2022 street bond projects. Finance staff said they are keeping total full‑time staffing at 122 positions and using an estimated $2.69 million from fund balance to help balance the budget. The city’s audited fund balance as of Sept. 30, 2024, was 11.5 months of general operating expenditures, the presentation said.

“Really the entire budget is an estimate,” Finance Director David Paul said during the presentation, describing revenue assumptions and staff efforts to be conservative on sales‑tax projections. Paul told the council that sales tax remains Live Oak’s largest general fund revenue source — about two‑thirds of the mix compared with property tax — and said staff is projecting a 2% sales‑tax increase for next year while monitoring large development timing.

Council members and staff discussed several revenue and expenditure items in detail: property tax calculations that rely on certified rolls from Bexar County; personnel costs that currently account for about 63.6% of general‑fund expenditures; a planned health‑insurance renewal reflected in the draft at a 15% increase after negotiations produced lower renewal quotes; and utility fund assumptions that could translate into modest water and sewer rate changes later in the fiscal year.

The council also directed staff to proceed with a list of parks projects that the Economic Development Corporation agreed to fund, and to move forward with two projects (a basketball pavilion and a kayak launch) for which staff will apply for a Texas Parks and Wildlife grant. Staff said the grant application deadline for those two items is Aug. 1; awards are expected in January or February.

Council gave staff additional direction on contingency planning and capital spending: if revenue weakens staff will stop capital projects that have not started while continuing obligations to contractors where work is underway. Staff reiterated that the budget is being prepared at a no‑new‑revenue posture so the property tax calculation will be presented for formal action at the council’s Aug. 19 meeting.

Next steps: staff will prepare the finalized draft for the city secretary in early August, present an interlocal agreement on the Schertz EMS contract (see separate item) at the Aug. 12 meeting, and return to council in the winter if revenue or cost data require adjustments.