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Athens council reviews FY2026 shortfall, directs staff on FY2027 revenue assumptions and cuts
Summary
At a June 18 budget work session the Athens City Council heard that FY2026 sales tax is below budget most of the year, approved staffing and department reductions already in place, and directed staff to assume a flat sales tax and a 98% ad valorem collection rate when drafting the FY2027 budget.
The Athens City Council on June 18, 2026 reviewed the city’s Fiscal Year 2026 budget and directed staff to adopt conservative revenue assumptions for FY2027 after hearing that sales tax receipts have trailed projections.
Mandie Quigg, assistant city manager, presented the FY2026 General Fund revenue and expense review and reported that "FY2026 sales tax is under budget 8 of 9 months." She told the council that a taxpayer has requested a refund from the Texas Comptroller and that an audit will be conducted; she said the Comptroller offers repayment options to the city if the refund is found to be due to the taxpayer. Quigg said management has already instituted measures to reduce costs, including department reductions of 3% and personnel savings such as no vacation buyback for employees, group insurance savings, a RIF, and holding vacancies and transfers from the General Fund.
Elizabeth Borstad, city manager, asked for council direction on revenue assumptions for FY2027, saying the General Fund will likely need further reductions and that the council should consider cost‑of‑living adjustments and TMRS options for employee retirement. After discussion the council directed staff to use a flat sales tax rate assumption coupled with a 98% ad valorem tax collection rate in preparing FY2027 revenue estimates.
Council members also identified budget priorities to guide the coming year’s proposals, including development of an industrial park, improvements to O.D. Baggett Park, planning for a new city hall adjacent to the police department, housing projects, stronger code enforcement and infrastructure items such as drainage and airport support. Mayor Aaron Smith additionally asked for increased Public Works funding for drainage and curb-and-gutter spraying.
No formal votes were taken at the work session; staff were directed to incorporate the council’s revenue assumptions and priorities into the FY2027 budget process. The session adjourned at 4:10 p.m.
