Highland Village CDC reviews FY2027 facilities budget as staff warns flat sales tax and study could raise tunnel costs to high end of $825,000

Highland Village Community Development Corporation board members reviewed updates to the facilities development capital improvement program and the FY2026-27 budget at a June 29 special meeting.

Heather, a city staff presenter, told the board the 4B sales-tax trend has been "pretty flat" since 2023 and that year-to-date revenue was about $47,000 under budget. "These year-to-date actuals are as of 05/31/2026," she said, and staff projected FY2027 sales-tax revenue of roughly $1,830,000. Heather also said the June 30, 2026 fund balance is expected to be about $3.1 million, rising to an estimated $3.9 million before accounting for a proposed $23,000 trellis-staining change.

The presentation covered revenues and expenditures. Heather reported personnel costs are projected to be about $79,000 under budget due to reallocated positions and insurance differences, while professional services could be about $77,000 over budget because of design work for the FM 407 connection and a tunnel erosion-control study. She told the board that interest income is expected to be lower than budgeted and that rental income (DoubleTree barn, pavilions, and soccer fees) is tracking close to projections.

Staff identified two supplemental requests for board consideration. Phil, a city staff presenter, described a $13,456 turnkey purchase of pond diffusers for DoubleTree Ranch Park as a lower-maintenance alternative to the existing fountain. "The diffusers are less expensive option, and they actually improve pond health, reducing algae blooms and far less to maintain," Phil said, adding the unit carries a three-year warranty and that diffusers remove the electrical components that frequently drive fountain repairs.

Phil also presented a placeholder $275,000 for an engineering and construction allowance tied to a 2499 Tunnel landscape and erosion-control study to be delivered by SPI. He described the $275,000 as a study/placeholder amount to produce four landscape options and opinions of probable construction cost. "We don't know what that is, but we needed to put a number in there," he said.

Board members pressed staff on the study's potential construction costs. Several members said retaining walls or other structural solutions could dramatically raise the price. One member noted the study's placeholder could be insufficient in a worst-case scenario, and another estimated a high-end, worst-case cost in the $825,000 to $1,000,000 range if wall construction is required. The chair said, "I don't wanna spend $850,000 if I don't have to," but board members agreed the study was needed to determine the appropriate approach.

Staff showed field photos and explained lower-cost mitigation tactics already in use, including riprap in places that has reduced washout, and recommended adaptive native plantings and more-sustainable turf in some areas. Phil said the study will include phased options and that some solutions could be significantly less costly than full walls.

Other items: the board discussed tracking of staff time charged to 4B sites (staff said time is designated to 4B locations but not tracked hour-by-hour and that work-order/CityWorks data could be used to refine allocations), and staff reviewed a five-year outlook and routine fee benchmarking for pavilion and field rentals.

Next steps and schedule: staff will make the budget changes requested by the board and return updated slides at the next meeting. The board discussed dates to conduct a public hearing and to forward a recommendation to council; after considering posting deadlines and the July 4 holiday, the board agreed to meet on Thursday, July 16 at 6:00 p.m. to review the budget updates, SPI's study proposal, and priority-trails materials before forwarding recommendations to city council.

The board took no formal vote on funding the tunnel beyond placing the study placeholder and classifying the pond diffusers request as a supplemental rather than a routine maintenance line-item; staff emphasized the board would weigh in before staff implemented the fountain-to-diffuser change.

The meeting closed with staff commitments to update the CIP slides, provide the SPI scope/cost details when available, and present a full range of probable costs for the 2499 Tunnel options once the study is complete.