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Helotes officials weigh spending, pay raises and modest tax cuts as reserves top yearlong highs
Summary
At a July 15 budget workshop, Helotes leaders reviewed a strong reserve position and debated using fund balance to fund targeted capital projects, employee pay increases and a modest property-tax cut amid uncertain sales-tax receipts; staff will run scenarios and return with updated health‑care and valuation numbers.
Helotes — City leaders at a July 15 budget workshop debated whether to spend from unusually large reserves now or hold them as a buffer against volatile sales-tax receipts.
The mayor told council members Helotes now holds about 15 months of reserves and presented a range of options, including modest tax-rate reductions funded from accumulated savings, stepped increases in employee compensation and targeted capital spending. "We have 15 months of reserves," the mayor said, arguing the city could afford measured spending or tax relief while still protecting core services.
The discussion focused on trade-offs. Staff and council members agreed the city’s two largest revenue streams — property tax and sales tax — require different approaches: property-tax adjustments fall under the maintenance-and-operations (M&O) portion the council controls, while the INS (debt) portion must be adjusted as bonds are retired. Henry, the city administrator, noted the INS portion will decline as older bonds retire next year; by law the city must reduce the debt portion of the rate to reflect that change.
Council members pressed for caution. Several warned that sales-tax receipts for 2026 have lagged year‑over‑year and that a large portion of Helotes’ revenue can be concentrated in a few major payers. "We can only count on the businesses that we presently have," one councilmember said, urging prioritization of capital needs before committing to permanent, ongoing spending.
Staff asked for guidance to build scenario models for the next meeting. Henry said the broker now anticipates roughly a 20% increase in next year’s health-care costs, and that the assessor’s final valuation numbers should arrive before the next council meeting July 23; staff will use those inputs to produce balanced scenarios showing the cost of several raise options, possible tax-rate reductions and larger transfers to capital.
Public comment reflected the divide. Resident Patrick McGowan urged caution and said the council should complete a strategic or comprehensive plan with a funding program before lowering revenue, arguing the city should not reduce taxes until it knows what projects it will fund.
Next steps: staff will supply scenario analyses — including the statutorily required fractional INS reduction tied to paid‑off debt, multiple salary scenarios and capital-transfer models — for council review ahead of the formal tax-rate and budget votes this fall.
