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Ennis budget hearing spotlights $100M in idle cash and debate over modest property‑tax hike
Summary
Commissioners and staff discussed the FY2026 proposed budget and whether the city should invest large pooled cash balances to cover an estimated $500,000 general‑fund shortfall instead of approving a 0.17¢ property‑tax increase; staff warned fund restrictions limit how much interest can be allocated to the general fund.
City staff presented a proposed FY2026 budget on Aug. 19 that reflects lower total revenue largely because the city is exiting the QUIP nursing‑home program and due to a sales‑tax decline; staff proposed a 0.680708 tax rate (equivalent to the no‑new‑revenue rate with a 0.17¢ upward adjustment to raise roughly $500,000 for general‑fund priorities).
Director Muehle told the Commission the proposed all‑fund revenue is $76,019,008.66 and explained that accounting for transfers and IGT/QUIP pass‑throughs makes year‑to‑year comparisons appear dramatic. She said the city projects a general‑fund beginning balance of about $9.83 million and currently estimates $250,000 in general‑fund interest revenue for FY2026 with a prudent upside of another $250,000 if the city pursues more aggressive investment of available funds.
Mayor Cameron Rayburn and several commissioners argued the city could generate significant additional interest by moving portions of roughly $80–$103 million in bank balances into higher‑yield investment pools such as TexPool. ‘‘We have $103,000,000 that we could have invested in a account that would be yielding a significant amount more of interest,’’ the mayor said, citing a 7‑day net yield for TexPool at about 4.3% referenced in the meeting materials.
Staff and other commissioners cautioned that not all pooled cash can be redirected: bond proceeds for capital projects, EDC funds, enterprise funds and other restricted accounts cannot legally be moved into the general fund for recurring expenses. Director Muehle said some capital project and enterprise‑fund balances are dedicated to future projects and that interest earned on those funds must be allocated proportionally; she estimated the general‑fund share that could reasonably be invested would likely produce roughly $250,000 additional interest over the year, leaving a shortfall relative to the $500,000 target.
Public commenters — including local CPAs and residents — urged the city to move quickly to invest balances, with one commenter estimating the city had forfeited millions by leaving funds in low‑yield accounts.
What’s next: the Commission reviewed the proposed rate and asked staff to pursue investment options aggressively while keeping legal fund restrictions and cash‑flow needs in mind. The proposed tax rate and budget remain subject to additional public notice and future vote as required by state law.
Sources: Director Muehle’s budget presentation and public testimony during the Aug. 19 Ennis City Commission meeting.
