Helotes council keeps property tax rate at 31 cents after extended budget and pay discussions

Helotes City Council voted on Aug. 14 to keep the city's ad valorem property tax rate at $0.31 per $100 of valuation after an extended presentation and debate about the proposed 2026 budget, staffing shortages, and how much of the city's reserves to use for raises and one-time capital purchases.

The council first considered a proposed tax rate of 0.309799, the city's calculated no-new-revenue rate; a roll-call vote on that proposed rate failed. After further discussion about using reserves to address pay disparities and capital needs, the council approved a motion to leave the rate at 0.31 by a 4-1 vote; Council member Sanders cast the lone dissent.

The vote matters because property taxes supply about 40% of Helotes' revenue and the numbers discussed determine whether the city must hold additional public hearings. City staff told the council the presented 0.309799 figure equals the no-new-revenue rate under Chapter 26 of the Texas Property Code and therefore would not require a public hearing; exceeding the voter-approval threshold would trigger a different process.

Daniel Rodriguez, the city's finance director, walked the council through the tax-rate mechanics and multiple constraints in state law (the no-new-revenue rate, the voter-approval rate and the maintenance-and-operations gate). He showed that raising the M&O portion to the voter-approval limit would increase operational revenue by roughly $133,000 (98% collection assumption) but that using the proposed 0.309799 instead of 0.31 would reduce annual revenue by about $4,200, a comparatively small amount against the city's $11.1 million budget.

Resident Patrick McGowan, speaking during public comment, urged the council to use reserves to raise employee pay and criticized the mayor's proposed budget for not reflecting the city's audited financial position. "Ask yourself if you're proud that the city has over $12,000,000 of unassigned cash in the general fund reserve," McGowan said, adding concerns about low employee pay compared with neighboring jurisdictions.

City Administrator Henry Hayes and other council members repeatedly emphasized the difference between unassigned funds and truly unrestricted funds, and noted that a substantial portion of the city's balance was restricted or tied to earlier grants and debt. Hayes told the council the city had roughly $12,375,000 in projected general fund balance under the proposed 2026 budget and about 13.41 months of reserves on the projection, with roughly 9 months considered unrestricted.

Council discussion focused heavily on pay disparities in public safety and dispatch, vacancy-driven operational strain, and whether to draw from reserves to accelerate pay adjustments. The council asked staff to prepare scenarios showing the multi-year impacts of different distributions of raise dollars. The council also agreed to procure an independent salary survey so future comparisons would use verifiable, apples-to-apples data; staff estimated the survey would be a relatively small expense compared with the budget (staff cited a $5,000 ballpark figure during the meeting).

As a near-term compromise, council members directed staff to model budgets that would: keep the tax rate at $0.31, set aside $200,000 a year (to be transferred into the capital/reserve plan as currently practiced), and identify how a portion of those funds could be used this year to address immediate pay and critical position needs (including one administrative position discussed during the meeting). Council members said any additional hires or midyear changes (including possible firefighter/EMS positions tied to grant awards) would be handled by subsequent budget amendments if necessary.

Staff also presented the draft capital-improvement list and highlighted several large or near-term purchases (including the continued replacement/upgrade options for Medic 2 ambulance, possible water-truck purchases, building repairs and IT/security upgrades). Depending on which capital requests the council supports, the presented capital plan ranged from an overage of about $119,000 (if all items were approved) down to roughly $457,000 (if higher-cost items were delayed).

The council set follow-up steps: staff will prepare scenario runs (2- and 5-year projections) showing the impact of drawdowns, additional raises, and capital choices; the city will commission a salary survey; and staff will continue to pursue available grants (including SAFER grants for firefighter staffing) and return with midyear budget amendment options if grant outcomes require changes.

The meeting also scheduled the budget public hearing (required for the annual budget) and confirmed procedural dates for the remainder of the adoption process.

Ending: The council's decision to hold the tax rate at $0.31 preserves the status quo for property owners this year while directing staff to return with concrete fiscal scenarios and a salary-study recommendation the council can use when it finalizes the FY2026 budget.