Denton officials unveil $7.1M in proposed cuts as city seeks to close $14M budget gap

Denton city staff presented a midyear budget update Tuesday that shows revenues slowing and a preliminary $14 million gap for the 2025–26 fiscal year, and proposed about $7.1 million in reductions that city managers say close roughly half that shortfall.

The city’s chief financial officer, Jessica Williams, told the City Council the city is forecasting slower growth in property valuations and weaker sales tax collections and that the council should expect a “structurally balanced budget” but one that requires continued cost control. "We are right now projecting net income of $264,000 at the end of the year," Williams said.

Williams and Assistant City Manager Christine Taylor outlined the staff package of proposed reductions targeted at the general fund. The largest category is personnel: about $3 million from holding vacant positions through a managed-vacancy program. Other proposed savings include roughly $2 million from program efficiencies, about $1 million from reductions in contracted services and roughly $600,000 from equipment and supplies.

Taylor said the personnel savings rely entirely on positions already vacant. "All of these represent existing vacancies," she said. She said the policy is intended to avoid layoffs and to prioritize filling frontline and public-safety positions as conditions improve.

Major programmatic cuts recommended in the packet include: - Ending the ambassador pilot program on the downtown Square at the end of 2025 unless an alternative funding source is secured (staff noted hotel occupancy tax or a public improvement district could be options, but only if the program is narrowed and funded competitively). The staff estimate for the program’s general-fund cost was about $500,000 annually. - Discontinuing the city-run after‑school program and coordinating with Denton Independent School District (DISD) to absorb participants; staff said DISD has capacity for most sites but that enrollment at one school (Rivera) may be low and the city would continue to offer space at the MLK Recreation Center if necessary. Staff estimated the city’s after‑school savings at roughly $200,000. - Scaling back special-event support and in‑kind services (police, maintenance, public safety) and reducing the in‑kind program budget from $400,000 to $200,000; staff said changes would take effect October 1 and event organizers would be offered transition options, including payment plans for fees. - Reducing some Clear Creek park programming while maintaining park access and maintenance; staff said programming reductions target low-attendance, low cost‑recovery activities and rely on volunteer support.

Taylor said departments also identified about $1 million in contract cuts and travel/training reductions. The package presented to council would reduce the forecasted FY26 gap to roughly $7.3 million before transfers and enterprise‑fund adjustments; Williams said additional transfer reductions and enterprise fund savings are expected to close the remainder before final adoption.

Council members asked dozens of questions about service impacts, timeline and alternatives. Several members expressed reluctance to curtail programs that serve lower‑income residents. Councilmember [District 2] asked for attendance and cost‑recovery data for every program being cut; Taylor said staff would provide those metrics before the next budget workshop. Councilmember [District 4] requested options that would replace a proposed Clear Creek reduction with cuts elsewhere in parks so the program could remain.

Several public speakers told council the after‑school program supports working families and that cutting seasonal staff amounts to cutting jobs and services; one after‑school program supervisor said many seasonal employees use the positions to support themselves and to attend college. Others urged the council to find funding for the downtown ambassadors because downtown businesses say they value the program.

Mayor Gerard Hudspeth and city management emphasized that the proposed reductions are the result of a months‑long, 0‑based budgeting process and that departments have been asked to target at least 3 percent savings; city management also said protecting unrestricted fund balance is a priority to preserve the city’s credit rating.

Next steps: staff will return with additional data and a formal proposed budget this summer, with budget workshops scheduled in July and August and adoption planned in September. Council signaled general support for staff to proceed with the proposed reductions but asked for more detail on program metrics, potential alternative cuts, and options for funding any high‑priority items (for example using hotel‑occupancy taxes for a scaled‑down ambassador program).