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Leon Valley council outlines options to close $454,000 budget gap, debates stormwater and water-project pacing
Summary
City officials identified a roughly $454,000 gap in the proposed FY2026–27 budget, discussed shifting a police position to the economic development fund, and agreed to reduce next year’s water/sewer capital outlay to $150,000 so staff can pursue engineering plans and larger grant opportunities.
The City of Leon Valley’s council and staff spent much of their July 21 meeting narrowing choices to close a projected $454,000 deficit in the proposed FY2026–27 budget.
City Manager Dr. Caldera said recent changes to the certified tax roll and new exemptions enacted by House Bill 9 produced a roughly $424,000 ad valorem difference, reducing the gap but leaving difficult trade-offs. “I received the certified tax roll, which showed that your exemptions have increased dramatically… your ad valorem tax is going to go down because the amount that you're allowed to exempt off of your property tax has gone up,” Dr. Caldera said. Staff also illustrated options that include using reserve funds, reallocating project funding, or reducing planned capital outlays.
Councilors and staff agreed to move one sworn officer’s budgeted position into the economic development fund to help lower the shortfall; Dr. Caldera said that change reduced the gap from roughly $554,000 to about $454,000. The council reached consensus to reduce the water and sewer capital outlay line from $500,000 to $150,000 for next year so staff can pay for preliminary engineering and prepare a stronger application for a competitive Texas Water Development Board grant. The manager said the engineering step would cost about $88,000 and that having plans in hand could improve grant scoring for priority projects.
Stormwater funding and an $800,000 erosion project drew repeated attention. Staff reported the stormwater account would be negative unless the council covered an $83,000 shortfall; councilors discussed options including budgeting a smaller initial amount, splitting the project funding with general reserves, or keeping $700,000 budgeted and managing the remainder via future budget adjustments. Dr. Caldera told the council he needs a firm direction on how much to allocate so staff can finalize accounting for the proposed budget.
The council also reviewed longer-term constraints: falling interest income compared with FY2025 and the structure of special revenue funds, including red light camera revenues that currently support portions of multiple personnel salaries. Councilors pressed staff for follow-up budget meetings once the county appraisal ‘no new revenue’ rate and health-insurance costs are known; staff said they expect those figures late July and recommended at least one additional budget session before final adoption.
