Percival council rescinds 100% meals‑tax plan, sets 83.6% allocation and directs $1.62M in budget cuts

The Percival Town Council on May 13 rescinded an earlier directive to move 100% of the town’s meals‑tax revenue into the utility (enterprise) funds and, in a 4‑3 vote, set a new policy allocating 83.6% of projected meals‑tax receipts to the enterprise funds beginning July 1, 2025. The council also directed the town manager to produce $1,624,709 in general‑fund cuts so the town can adopt a balanced FY26 budget.

Mayor Bertaux framed the shift as a compromise meant to relieve immediate pressure on the utility fund while preserving services. “I’m proposing to draw down $1,600,000 from the general fund reserves this year,” he said during the presentation, adding that replenishing wastewater reserves to 75% and providing $1,181,292 additional meals‑tax revenue to utilities would be part of a package that also funds modest merit increases and rate adjustments.

Supporters said the change would help stabilize the utility funds in the near term. Opponents warned that transferring a large recurring share of meals tax to utilities simply shifts the burden to the general fund and is unsustainable without real, recurring revenue increases or structural reform. “There is not $1,600,000 worth of cuts in our general fund,” Councilmember Stout said during the debate, urging caution about drawing down reserves and about relying on one‑time measures to solve long‑term structural shortfalls.

Council members debated who should craft the line‑by‑line cuts. Some argued it is the council’s responsibility to set priorities for services; others said department heads and the town manager are best positioned to identify practical reductions. The council settled on a motion directing the town manager to return with proposals that produce $1,624,709 in cuts consistent with council decisions to date.

The 83.6% allocation was adopted on a 4‑3 roll call (Yes: Khalil, Luke, Vice Mayor Nett, Mayor Bertaux; No: Stout, Wright, Rayner). Council also voted earlier in the meeting to rescind the April 8 motion that had directed 100% of meals‑tax revenue to the enterprise fund.

What’s next: The town manager must present specific cut options and updated budget figures for council consideration before the final FY26 adoption deadline. Council members said they expect follow‑up meetings to review staff proposals and to consider whether transfers or rate adjustments better secure long‑term structural balance.