Loading...
08-25-2026 Budget Retreat MeetingMINUTES BUDGET RETREAT MEETING August 25, 2026 A Budget Retreat Meeting was held by the Schertz City Council of the City of Schertz, Texas, on August 25, 2026, at 5:30 p.m. in the Hal Baldwin Municipal Complex Council Chambers, 1400 Schertz Parkway, Building #4, Schertz, Texas. The following members present to -wit: Present: Mayor Ralph Rodriguez; Mayor Pro Tern Michelle Watson; Councilmember Mark Davis; Councilmember Paul Macaluso; Councilmember Ben Guerrero; Councilmember Robert Westbrook; Councilmember Robert Sheridan; Councilmember Allison Heyward Staff Steve Williams, City Manager; Brian James, Deputy City Manager; Sarah Gonzalez, Assistant City Manager; present: Sheila Edmondson, City Secretary Call to Order Mayor Rodriguez called the meeting to order at 5:31 pm. Opening Prayer and Pledges of Allegiance to the Flags of the United States and State of Texas. (Mayor Rodriguez) Mayor Rodriguez provided the opening prayer and led the Pledges of Allegiance to the Flags of the United States and the State of Texas. Welcome (Mayor Ralph Rodriguez/City Manager Steve Williams) Mayor Rodriguez welcomed everyone to the Budget Workshop. Mayor Rodriguez recognized City Manager Steve Williams, who also welcomed everyone to the Budget Workshop. Hearing of Residents This time is set aside for any person who wishes to address the City Council. Each person should fill out the speaker's register prior to the meeting. Presentations should be limited to no more than 3 minutes. All remarks shall be addressed to the Council as a body, and not to any individual member thereof. All handouts and/or USB devices must be submitted to the City Secretary no later than noon on the Mondaypreceding the meeting. Handouts will be provided to each Councilmember prior to the start of the meeting by the City Secretary. All USB devices will be vetted by City IT staff to ensure Cityproperty is protected from malware. Discussion by the Council of any item not on the agenda shall be limited to statements of specific factual information given in response to any inquiry, a recitation of existing policy in response to an inquiry, and/or a proposal to place the item on a future agenda. The presiding officer, during the Hearing of Residents portion of the agenda, will call on those persons who have signed up to speak in the order they have registered. No one signed up to speak. Workshop Fiscal Year 2026-2027 Operating Budget and Capital Improvement Program Workshop (S.Williams/Executive Team/J.Walters) Councilmember Paul Macaluso asked CM Williams to calculate what the budget would look like if we kept the current tax rate what would we have to cut. The document CM Williams provided had three different options; The current rate is .5118%. No new revenue rate .5296%. The delta between those two numbers is 1.78 cents reduction, which would reduce the general fund by $997,868.00. The general fund revenues are 55.2 million and the total expenditures are 82.7 million. That is a big difference. There are a lot of one-time items we want to evaluate with reviewing the ongoing revenues vs. outgoing expenditures. To stay 1 at the current rate, we would need to pull approx. $750,000 off of the proposed budget. Looking at the bottom of the supplemental requests, we would need to remove the 4 police officers and 4 communication officers from this year's proposed budget. Councilmember Macaluso stated it is the council's responsibility to look at how we can make it work at the current tax rate. When housing values go up, we benefit from that, but when the values are down, the tax rate should not increase to make up for the lower home values. Councilmember Macaluso would like to review the excess fund balance and have the opportunity to add savings to the homeowners. By applying it to our future debt, the savings would be more significant than putting it in a account with 2% interest. CM Williams explained that if we keep the current tax rate, we will have to cut ongoing expenditures. Over the last six months, we have had a lot of discussion on a structurally balanced budget and will have to make sure our ongoing revenues support the ongoing expenditures. CM Williams' recommendation would be not to cut the tax rate, but reduce ongoing expenditures. Council would need to look at the supplemental list and cut from the bottom up. CM Williams would rather not add the 8 recommended positions from this year's supplemental list, to then go ahead and add them, then have to take away funding from somewhere else. The bottom of the supplemental list would have to be removed first. CM Williams reviewed the Supplemental list and explained that many of the top items on the list are one-time costs. The lower half of items on the list are items with a recurring costs. He does not recommend eliminating any existing positions we currently have. Finance Director James Walters explained to Council that the city is projecting next year's sales growth to be 7%, similar to this year. Finance Director Walters stated when we are projecting future growth, we are making guesses based on expert opinions. The DVHS (Disable Veterans Homestead) exemption is making it difficult for cities, putting more responsibilities on residents. Councilmember Macaluso believes that the trend will be less tax revenue and if we continue on the path we are on, it will end up with the city in a bad position and having to increase property tax every single year. By the state's definition, the no new revenue tax rate is not a tax rate increase, it's a higher rate that is applied to your home value from year to year. Staff is mindful of what the future could be and that is why the city does a five-year forecast and take into consideration the flatness of property tax growth. Councilmember Robert Westbrook asked the City Manager of all the items on the supplemental list where we would have to cut from if we do not go with the no -new revenue rate. He is asking if Council needs to give staff direction on what to cut. CM Williams asked if there is a consensus on the tax rate that the Council would like to target? Is it the same tax rate, or the proposed no -new tax rate or something other? He would like to get the consensus so he knows where to start the conversation vs. working backwards. CM Williams would like to hear from all of the council from their perspective. Councilmember Robert Sheridan shares the same views as Councilmember Paul Macaluso in regard to keeping the same rate. He asked if there is another analysis that the Council can utilize because the city needs their first responders. Is there a way to support the same tax rate and reevaluate our work processes and efficiencies? CM Williams explained that 70% of the general fund are salaries. So the cut will be salary related. So again, CM Williams is recommending that to keep the same tax rate, we don't add the 8 positions in PD. and just suffer the current workload as it is now. Councilmember Sheridan is in support of the new positions and also keeping the same tax rate. CM Williams explained the no new tax rate will generate more income but would raise taxes a little bit as opposed to just not raising the tax rate at all. The No -New -Revenue (NNR) tax rate in Texas is calculated by taking last year's levy, subtracting taxes on lost property, and dividing that total by the current year's taxable value of properties remaining on the tax roll. This produces a rate that generates the same amount of property revenue as the previous year. Councilmember Westbrook asked how many years do you go with 'no -new revenue' tax rate before the quality of life in the city starts to diminish? We need new vehicles and half the items on the list. Sooner or later we will have to raise taxes, may not be this year or next year, but we can't continue to always say we do not want to raise taxes. CM Williams added that we can address it through growth. The general fund property tax revenues are about 40% of total revenues. We can concentrate on generating more sales tax though adding more commercial, industrial and retail businesses. CM Williams recommended the 'no -new revenue rate'. Councilmember Westbrook recommended going with the 2 'no -new revenue' rate, since there are about 3 or 4 councilmembers who would possibly agree. Councilmember Westbrook suggested we start at the no -new revenue rate as a starting point. In the draft budget for FY26-2027, CM Williams recommended approving the no -new revenue rate, which is an increase of 1.78 cents, and with that we could add 4 dispatchers and 4 police officers. If Council wants to adopt a lower rate, his recommendation would be to cut from the bottom of the list and work your way up without affecting current operations in other areas. Mayor Rodriguez summed up the current discussion that some of the council would like to keep the same tax rate, which is 0.5118. If we go with the no -new revenue rate, it would be 0.5296. We would be bringing in the same amount of money that we brought in this fiscal year. Councilmember Davis is not in favor of the no -new revenue rate. He would like the city to look in other areas to save money. Councilmember Dietz agrees with Councilmember Sheridan and Councilmember Davis to review other areas of the city to save money so we do not have to raise taxes. Councilmember Guerrero would like to really focus on raising our revenue so we don't have to cut the merit and step pay for employees. CM Williams suggested the tax rate be 0.5175% just over a penny to get the four dispatchers at this minimum rate. We could not add the four dispatchers with the current tax rate. Mayor Rodriguez stated the 0.5175% is the best of both worlds. Keeping taxes as low as possible, by getting the 4 dispatchers where the need is critical. Mayor would like staff to bring back the budget at the current rate: 0.5118%; middle ground 0.5175% and no -new revenue rate 0.5296% so the council can see how each rate affects the budget. CM Williams stated staff can come back and bring forward what options would look like in all departments with 0.5175% and 0.5188% tax rates. The city needs 4 dispatchers, where it would need to cut in other departments to maintain the current tax rate and add the 4 positions. Mayor Rodriguez adjourned the meeting at 7:11 p.m. Adjournment ATTEST: Ak� flzz�A-"_�- Sheila i4mondson, TRMLI— City Secretary 3