Shenandoah council adopts budget, raises tax rate to fund police pay parity

Shenandoah — The Shenandoah City Council on Sept. 10 adopted its FY2025–26 operating budget and approved ad valorem tax rates the council said are necessary to implement a police pay-parity plan and add a detective position.

The council voted 4–1 to approve the budget, which includes three general-fund capital projects (an HVAC replacement for city hall, entrance landscaping and a virtual-server replacement) and funding assumptions based on a recommended maintenance-and-operations rate of 0.0796 per $100 of taxable value and a debt-service rate of 0.1025. Combined, those figures match the council’s adopted tax-rate structure for the year.

Council and staff said the primary driver of the tax-rate increase was the police pay-parity initiative to retain and recruit officers. Finance Director Lisa (presenting the budget) told the council that public safety — fire and police — accounts for more than 61% of general-fund expenditures and that market pressures had suddenly increased salary requirements for law enforcement. "If you don't compete, you're going to lose officers," Lisa said during her presentation. Council supporters argued that failing to act would worsen staffing shortages: "We are already down 4 police officers," one council member noted during the public hearing.

Why it mattered: Residents who spoke at the public hearing expressed sharply divergent views. Dozens urged the council to find further cuts rather than raise taxes; others defended the proposed increase as necessary to preserve a high level of public safety and the city's quality of life. Concerned residents pressed staff on a $427,000 figure they saw in the posted budget and asked for clearer line-item tracking of surpluses and reserves.

Budget details: Lisa presented a revenue mix that relies heavily on sales tax and mixed-beverage tax receipts, with sales tax accounting for roughly 70% of general-fund revenues in the proposed budget. The presentation showed a median Shenandoah home value of about $265,000 and compared tax bills under the current rate (0.1421), a mid option (0.1821) and the higher maximum shown in notices (0.2021). Staff said the city maintains a 180-day general-fund reserve policy and that available cash and restricted reserves would be used for the city-hall HVAC project; staff estimated unrestricted reserves just under $1 million after planned capital spending.

Votes at a glance: - Adopt operating budget (FY2025–26) including three capital projects — Passed, 4–1 (motion carried). - Set maintenance & operations rate at 0.0796 per $100 (reported as a 40.07% increase over the "no-new-revenue" baseline) — Passed, 4–1. - Set debt-service rate at 0.1025 per $100 — Passed, 4–1. - Resolutions setting public hearings on land-use projections and possible impact fees (Chapter 395, Texas Local Government Code) — Approved by motion earlier in the agenda. - Motion to table an ordinance (Item 10) for further review — Approved by motion.

What residents asked for: Speakers repeatedly asked for more transparent accounting of any budget surplus and pressed the council to explore alternatives to a broad tax increase, including a special-purpose commercial improvement district or targeted business taxes. Several residents argued commercial properties place a disproportionate demand on policing and suggested mechanisms to capture more revenue from businesses; staff and council said those ideas require legislative or district-level action that would take more time.

Council response and next steps: Council members who supported the tax-rate motion said the decision was driven by market forces hitting public safety salaries and by the need to preserve current service levels. They also signaled staff would continue to pursue revenue options and cost-savings and would present updated forecasts in coming months. Staff said a study of potential impact fees and capital needs will be presented to the public at an Oct. 22 meeting.

The council closed the public hearing on the budget at 8:05 p.m., resumed its agenda, adopted the budget and then opened a separate public hearing on the ad valorem tax rate; the tax-rate votes followed that hearing. After completing the votes, council recessed into a short executive session for a personnel matter under Texas Gov. Code §551.074.

A note on attribution and figures: Quotes and attributions in this story come from the Sept. 10 meeting transcript and on-record remarks by residents and staff. Where residents cited specific numbers seen on posted materials (for example, a $427,000 surplus), the documents were discussed during the public hearing and staff provided clarifications on how placeholders and provisional rates were used in the posted proposed budget.