Copperas Cove council workshop narrows FY2026–27 shortfall, directs staff to proceed with $34M CO notice and use sinking fund dollars

Copperas Cove — The City Council at a June 2 workshop directed the city manager to proceed with the proposed FY2026–27 budget framework and authorized staff to prepare a notice of intent for $34 million in 2026 Certificates of Obligation, city manager Ryan Havlaw said.

Havlaw told the council the current draft shows roughly a $1.9 million general-fund deficit under present estimates and that adopting the voter-approval tax-rate option (the state-authorized 3.5% allowance) would reduce that gap to about $1.4 million. He recommended using up to $750,000 of the interest and sinking fund — projected to end near $1.5 million — to lower the shortfall while preserving a remaining balance in that fund.

"We're now down to a $1.9 million deficit," Havlaw said, and recommended, "we utilize up to about $750,000" of the sinking fund to help balance the general fund. The council signaled support to move forward with staff's proposal while awaiting certified property values and final tax-rate calculations.

The notice of intent the city manager described totals about $34 million. Of that, roughly $28 million would fund water- and sewer-supported utility projects already reflected in the utility-rate study; the remaining $6 million would cover tax-supported projects, including a $2.1 million capital-outlay package for vehicle and equipment replacement, a $1.6 million golf-course irrigation and greens renovation, and a $600,000 exterior renovation for city hall.

Havlaw warned the council of consequences if some projects are delayed. He said cemetery phase one was part of the tax-supported package and, based on the cemetery master plan, the city has approximately three to four years of available plots depending on local mortality and demand. "If we don't proceed," he said, families may need to seek plots at other cemeteries or choose cremation.

Staff estimated that the proposed tax-supported components would add about three cents to the tax rate, and that using the sinking fund as proposed would change the net tax-rate effect by roughly three and a half cents, depending on final debt schedules and certified property values provided by the tax assessor-collector. The council asked staff to work with the financial adviser and bond counsel on precise timing and tax-rate effects.

During discussion a council member suggested funding the $600,000 city-hall exterior project from general-fund balance, proceed with the golf-course and capital-outlay items, and delay cemetery phase one until next year; that approach drew general support. No formal vote or ordinance was taken at the workshop — council provided direction to staff, with formal budget adoption and any debt-authorizing resolutions to occur at subsequent regular meetings after property values are certified.

The city manager said the proposed budget will be presented on June 16, with detailed department-level workshops set for June 23 and June 25.

What happens next: staff will prepare the formal proposed budget and the notice of intent for COs for consideration at an upcoming regular meeting; council must adopt the budget and any debt-authorizing resolutions after certified property values are available.