San Antonio first-quarter budget report: finances largely on track, officials warn federal grant cuts could affect 758 positions

City budget staff told the City Council on Tuesday that San Antonio’s fiscal-year 2025 finances are generally “in line with our adopted budget” after the first three months of the year, but officials warned that uncertainty in federal grant funding could affect hundreds of city positions and outside partner services.

Justina Tate, the city’s budget director, presented the “3 plus 9” first-quarter financial status report and said the report reflects unaudited actuals from October through December and early projections for the rest of FY25. “The general fund results for the first quarter are in line with budget,” she said, while flagging items the office is watching.

The city’s adopted FY25 total budget is about $3.96 billion, divided among a $1.67 billion general fund, roughly $860 million in capital projects, and restricted funds governed by federal, state or local law. Tate said the general fund’s four largest revenue sources are property tax (about $482 million), CPS payments (budgeted at $455 million), sales tax (about $415 million) and other fees and user charges.

Tate reported that through the first quarter the city planned to receive about $510 million and collected roughly $515 million — about $4.9 million ahead — driven largely by higher-than-expected CPS electric fuel adjustment receipts. She told council that recent January receipts left the city about $2.3 million worse than the initial first-quarter position because a strong sales-tax payment was offset by a weaker CPS check.

Despite that month-to-month volatility, Tate said expense activity is running below plan so far. “In the first quarter … our spending is below budget by about $4,100,000,” she said, and the budget office’s preliminary projection is that FY25 will be close to budget overall.

Still, council members repeatedly asked about the city’s exposure to changes in federal grant funding. Councilmember Villagran asked how many city positions are funded through federal grants; Tate replied: “Yes. So the number of positions that are funded through federal grants is 758 positions.” Several council members said the city should prioritize contingency planning for those positions and for delegate agencies that rely on federal funds.

City Manager Eric, responding to the federal uncertainty, told the council: “At this point right now there's been no impact.” He said city staff are monitoring national developments, analyzing potential effects and will inform the council if adjustments are necessary. He added much of the federal-funded work is concentrated in two departments: Human Services and Metro Health.

Tate also reviewed restricted funds and budget initiatives. Notable items included: roughly $326.9 million in ARPA allocations with about $69 million remaining to spend (most programs to be completed by September 2025, infrastructure and emergency-preparedness work by December 2026); $2.7 million added in FY25 to open and operate two new spay/neuter clinics (construction expected April 2025); and $1.4 million and 14 positions added to Animal Care Services to raise its critical-response capacity toward a FY26 goal of 100 percent.

On homelessness and housing: FY25 funding includes $9.3 million for a low-barrier shelter; through January staff reported 421 unduplicated shelter clients and 92 exits to stable housing. Neighborhood and Housing staff said a recent $1 million rental-assistance allocation has helped hundreds of families this fiscal year, and that a high demand cycle produced about 730 applicants during a portal window — the program planned to serve roughly 130 more applicants from that round.

Revenue trends Tate described include a sales-tax projection holding to a 3.3 percent growth assumption for FY25 and CPS payments projected about 5.9 percent ahead of last year’s actuals. Hotel-occupancy tax collections were slightly below plan in the first quarter but expected to finish the year close to budget; the city budgeted $113 million for hot tax in FY25. The solid-waste enterprise is outperforming because of stronger recycling commodity pricing; airport revenues were slightly down in the quarter but projected to finish ahead if recent nonsignatory status shifts resolve as expected.

Council members pressed for more analysis and contingencies: several asked for a clearer timetable and decision points if federal funding is reduced, and for more detail on which programs and delegate agencies would be most affected. Councilmember Castillo said building internal capacity at Metro Health and Human Services should be a priority to reduce overreliance on federal grants.

The budget office said the next formal update will be the midyear “6 plus 6” financial report in May; staff also presented a recommended FY26 calendar that schedules the city manager’s proposed budget presentation for Aug. 14 and budget adoption for Sept. 18. Tate said the city manager is required by the charter to establish a budget calendar and that the recommended calendar has a small change to accommodate the May election.

Council members asked staff to provide more granular materials in advance of future briefings, and to supply lists of federally funded positions and agencies that could be affected by federal grant changes.