Amarillo council leans away from street maintenance fee, prioritizes retiree COLA and employee raises

The Amarillo City Council spent the bulk of a workshop reviewing next year27s budget and options for covering street maintenance costs, ultimately directing staff to pursue a balanced plan that avoids a new standalone street maintenance fee for now and puts priority on retiree and employee compensation.

Mayor (speaker S1) opened the meeting by framing the choices facing the council and saying the city must follow "good civics and good servant leadership." Laura (speaker S2), the staff presenter, told councilors the city is not facing a revenue shortfall but that "expenses are rising faster than revenue," pointing to previous raises and retiree obligations as reasons the budget is tighter.

Why it matters: staff said the city would need about $15 million a year to fund the street maintenance department as a separate self-supporting fund. The staff27s alternative — bringing the street department back into the general fund and trimming one-time and supplemental requests — would let the council balance the books without adding a new fee to utility bills. That option, which several council members endorsed during discussion, preserves the window to design a fee later if needed but avoids immediate rate changes.

What staff presented: Laura walked the council through updated cash-flow tables, a revised estimate of starting reserves (about $66 million in audited beginning reserves compared with an earlier $75 million estimate), and specific revenue and transfer changes, including previously used one-time interest transfers from water and sewer funds. Staff recommended keeping water/sewer interest in those funds for upcoming capital projects rather than using it for ongoing general-fund costs.

On the street fee, staff sketched three scenarios: no street maintenance fund (bring street operations back into the general fund and cut specific items), a partial fee (quarter or half of the earlier proposal), or a full fee (a utility-style charge that staff estimated could generate roughly $15.5 million if fully implemented on a 12-month basis). Donnie (speaker S13) said the $8-per-account figure cited was an illustrative average drawn from peer cities, not a finalized rate.

Council direction and trade-offs: after extended discussion, councilors broadly signaled support for the no-fee approach in the near term while emphasizing that the top budget priority should be people and retention. "We need to take care of staff," said a council member (speaker S8). Multiple public commenters and one resident, James Schenck (speaker S4), argued a fee is—functionally—a tax and warned about ceding voter control; speaker McCullough (S7) said whether the cost is labeled a fee or a tax changes who pays (property owners versus bill payers).

On compensation, councilors told staff to preserve the retiree TMRS COLA window (staff said that opportunity is time limited) and to prioritize raises: staff27s balanced, no-fee option included reduced civilian raises (2% instead of 4%), smaller police/fire increases than originally proposed, and cuts to supplemental items. Council asked staff to search for modest additional funding — staff agreed to look again for targeted savings and to evaluate options such as limited fee adjustments already discussed (for example, solid waste or a previously proposed vector fee) and to report back. Council members also asked staff to explore whether partial funding (for example, $500,000 to $1,000,000) could be found to begin addressing a broader pay study and to consider modest additional percentages for police and fire if funds are available.

Quotes that capture the debate: "There is no shortfall. There's no missing money. There's no lost revenue. What we have is expenses are growing and how much revenue that we can," Laura (speaker S2) told the council during the cash-flow review. "A fee is nothing but a tax," James Schenck (S4) told council during public comment.

What27s next: staff will return with a refined recommendation and a short set of scenarios based on council direction and the upcoming calendar: council must set the not-to-exceed tax rate and post required public-hearing notices in August and hold budget hearings in September. Council asked staff to begin preparing notices based on the staff27s no-fee (first-column) scenario while continuing to look for modest additional, legally appropriate funding sources to fund limited pay-study steps and targeted raises. The council did not adopt a final budget or fee at the workshop and adjourned to allow staff time to bring back updated options.