Ennis budget debate centers on investing city cash vs. proposed tax increase

Ennis Finance Director Muehle presented a proposed FY2026 budget Aug. 19 showing all‑fund revenues of about $76.0 million and a notable decline tied to the city's exit from the QUIP program and lower sales-tax projections. The presentation outlined revenue adjustments, proposed expenditures, and fund-by-fund detail, and proposed a tax-rate change that would add roughly $500,000 to the general fund.

Commissioners and members of the public focused much of the discussion on how the city holds and invests its cash. Several commissioners and local CPAs urged staff to put larger portions of the city’s consolidated balances into short-term investment pools such as TexPool to earn higher interest rather than rely on a proposed 0.17‑cent tax increase to fund equipment and operations. The mayor noted the consolidated cash balance held at the local depository was in the tens of millions and asked whether more aggressive investment could offset the tax proposal.

Director Muehle explained staff’s projection included $1.3 million in interest on investments citywide and that many funds are legally restricted (bond proceeds, capital project funds or enterprise funds) so those earnings cannot be transferred freely into the general fund. Staff estimated the general fund itself could reasonably earn about $250,000 in FY2026 through improved investment, and that aggressive investment might produce an incremental $250,000 more—but would not likely cover the entire $500,000 target. Commissioners argued for staff to prioritize investing idle balances and return with an implementation plan; staff said they would pursue that work and present options.

Public commenters who identified themselves as a CPA and local resident urged immediate action, noting that investing large balances even for a few weeks could produce meaningful interest and reduce the need to raise property taxes. Director Muehle and City Manager Beringer cautioned that transfers between restricted funds and the general fund are legally limited and that any new investment strategy must preserve cash for upcoming capital projects. The commission asked staff to prepare follow-up materials on investment timing, projected yields, and what amounts could be safely invested without threatening liquidity for payroll and capital projects.

Next steps: staff will provide additional detail on investment opportunities and constraints, and the commission will consider budget amendments or a tax rate adoption at subsequent hearings.