Highland Village staff warn of revenue shortfalls as council weighs FY2026–27 budget choices

City staff told the Highland Village City Council on July 14 that the general fund is tracking below the adopted budget heading into FY2026–27, and asked for council direction on which decision items to include in the final proposal. The finance presentation said property tax collections were 99% collected through June 30 but projected property tax, sales tax and investment income shortfalls totaling about $267,000 for the current fiscal year.

The presenter highlighted specific shifts that reduced near‑term expenditures, including a delayed city hall generator and carryovers for equipment design, and said personnel spending was projecting to be $864,000 under budget because of turnover and a hiring freeze affecting three positions. Council members asked for details about vacancy duration and the operational impact of leaving positions unfilled. In response, staff said the three positions had staggered opening dates and that the hiring freeze is a management decision intended to preserve fund balance while revenues remain soft.

Staff presented two five‑year outlooks: a base projection without decision items and a scenario that includes supplemental requests and fills vacancies. Using the voter‑approved tax rate for budgeting, staff showed the city could remain above the council’s fund‑balance policy under some scenarios but asked council to identify priorities so the manager can prepare the proposed budget for public posting, hearings and vote. The council scheduled follow‑up discussion and requested a breakdown of the costs and roles tied to the three hiring freeze positions.