03-27-2026 Council-Staff Pre-Budget MinutesMINUTES
SPECIAL MEETING
City Council -Staff Pre -Budget Meeting
March 27, 2026
A Special Meeting was held by the Schertz City Council of the City of Schertz, Texas, on March
27, 2026, at 9:00 a.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 Tem Mark Davis; Councilmember Paul
Macaluso; Councilmember Michelle Watson; Councilmember Ben Guerrero;
Councilmember Robert Westbrook; Councilmember Robert Sheridan;
Councilmember Allison Heyward
Staff City Manager Steve Williams; Deputy City Manager Brian James; City Attorney
present: Daniel Santee; Assistant City Manager Sarah Gonzalez; City Secretary Sheila
Edmondson
Call to Order
Mayor Rodriguez called the meeting to order at 9:00 am.
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 State of Texas.
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. Any person making personal, impertinent, or slanderous remarks while addressing the
Council may be requested to leave the meeting.
All handouts and/or USB devices must be submitted to the City Secretary no later than noon
on the Monday preceding 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 City property is protected from malware.
Discussion by the Council of any item not on the agenda shall be limited to statements of specif c
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
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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.
Dan Swart-1509 Gwendolyn Way, Schertz, TX 78154-Mr. Swart expressed concern that the City
of Schertz has consistently looked "outside" the organization rather than evaluating internal
conditions. He noted that the Compensation Study, or Employer Compensation Index, does not
appear to provide evidence of what is actually occurring within the City. Referencing recent
budgets, he acknowledged the assertion that higher compensation will reduce turnover and attract
talent, but questioned whether there is concrete evidence to support this approach. He encouraged
staff to evaluate measurable, internal indicators before making broad decisions to increase wages
without sufficient research.
Drusilla Hale-4912 Park Cape -Ms. Hale, a new member of the community, expressed her
appreciation for the warm welcome she has received. She also shared concerns regarding the
condition of the current roads, noting that they are in need of repair and asking that the needs of
the community not be overlooked. Additionally, Ms. Hale inquired about the possibility of an
additional library and other services to support the community. She expressed interest in
reviewing the city's growth planning map to better understand future development and to identify
areas where she may be able to serve.
Jonathon Marquez-5817 Saint Andrews, Schertz TX -Mr. Marquez noted that there are incomplete
sidewalks around Danville Middle School and emphasized that sidewalks are needed to ensure
student safety. He stated that he has learned sidewalks are planned for approximately eight years,
but expressed concern that improvements are needed much sooner. He expressed appreciation to
staff for the newly improved road in his subdivision and extended his thanks to Chief Lowery and
his team for their efforts in keeping the city safe.
Discussion and Action Items
1. Staff will conduct a workshop to discuss the pre -budget and capital improvement program
(CIP) development and prioritization process (S.Williams/Executive Team)
Mayor Rodriguez recognized City Manager Steve Williams. City Manager Williams
welcomed residents attending one of several budget meetings and noted that staff has
already begun work on the FY 2026-2027 budget, which will continue until adoption.
He explained that the budget process began with a City Council Teambuilding and
Strategic Planning Retreat involving both staff and Council. He described the current
meeting as a pre -budget retreat intended to gather input from Council and residents
regarding key concerns.
City Manager Williams outlined the upcoming timeline: from April through July, staff will
conduct Budget and CIP development planning; in August, a Budget and CIP retreat will be
held with Council and staff; and in September, the Budget and CIP will be considered for
adoption. The new fiscal year will begin on October 1, 2026.
Objectives of the Retreat: Within the construct of the City's Budget, CIP, and Strategic
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Plan:
1. Seek validation from the Council of where we are headed
2. Discuss Important Issues on the Horizon
3. Identify Council priorities that are not on our radar
Our long-term Strategic Plan includes the goals of -
Sustainable Government; Safe and Livable Community; Infrastructure Investment; Sense
of Community and Thriving Community.
Long -Term Financial Planning: Schertz LTFP:Long-term service vision; Financial
policies; Technically sound analysis & forecasting; Collaborative & participative process;
Connection to other plans
• 5-Year Operating Budget Forecast
• 10-Year Consolidated Capital Improvement Plan
The latest Citizen Satisfaction Survey results show the primary areas the city would focus
on: maintenance of streets and sidewalks; law enforcement; recreational activities.
CM Williams updated the Budget Priorities for FY 26:
• Infrastructure (Streets)
• Vehicle and Equipment Replacements (VERF)
• Competitive Compensation
• Staffing Levels
• New/Remodeled Facilities
Priority - Infrastructure (Streets)-Completed/In Progress
• More efficiently utilizing existing staff
• $753,000 for maintenance
• $53,889,496 — CIP
• $100,000 — Sidewalks
• $315,000 — Traffic safety projects
Goal
• Continue to make funding Street Maintenance and the Streets CIP a priority
• Plan for additional staff
Priority: Vehicle and Equipment Replacements (VERF): Completed/In Progress: Purchased
from current revenues and fluctuating annual expenditures
Goal: Establish a separate fund; Annual contribution for depreciation; Lump Sum for
accumulated depreciation; and replacements purchased from the fund
Councilmember Sheridan asked for a comparison of leasing vs. purchasing analysis on
large pieces of equipment. CM Williams explained that leasing a few years ago was
advantageous to lease, but now with a slow -down and interest rates, it is important to fund
your vehicle and equipment depreciation fund. The city will always consider the analysis of
leasing vs. purchasing equipment in the future.
Priority: Competitive Compensation: Completed/In Progress: Funded Step/Merit programs
and inflationary adjustment; vacancy rates continue low (6-8%)
Goal: Continue; tohave base compensation keep pace with the market; Classification and
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Compensation Study
Priority: Staffing Levels: CM Williatns:explained-.that in the current budget, 25 positions
were added in FY2025-26. Goal: Continue .to evaluate appropriate staffing levels
-General Fund \General Fund (9)
-Water/Sewer Fund (6)
-EMS Fund (4)
-Drainage (6)
86 employees have been added since 2021. EMS, PBW, Fire and Police -72% of the total
(62) The bulk of the added positions were for core services.
Councilmember Watson asked about our anticipated efficiency and emphasized the need to
explore alternative approaches before increasing staff. She suggested evaluating possible
restructuring options to improve overall processes before hiring additional staff. Deputy
City Manager Brian James noted that the Building Inspections division is currently
conducting virtual inspections, which are helping to save time and improve
efficiency. Councilmember Sheridan requested a detailed breakdown of each department's
staffing levels and operating budgets to support data -driven analysis and justify staffing
needs within each department. CM Williams explained that departments evaluate and
measure their work annually during the budget supplemental request process, including
how their efforts align with and support the strategic plan.
Priority: New/Remodel Facilities-Completed/In Progress: Fire Station #4 is under
construction; Police/Using County facility -in design; HVAC replacements
Goal: Building #6 remodel/Police; Parks Building renovation; Building # 1 /Municipal
Court remodel; Public Safety building — bond election
CM Williams explained the Prioritization Process, in which the City Manager's Office and
Executive Team evaluate all projects and rank them as "Must -Do," "Should -Do," or
"Nice -to -Do." Funding is primarily focused on projects categorized as "Must -Do" and
"Should -Do."
General Fund FY 25-26 Update was provided by Finance Director James Walters.
• Revenues: Property Tax — below target;- Sales Tax — above target;- Franchise Fees -on
target; • Permit Fees Residential — above target; • Permit Fees Commercial— below; •
Service Fees & Fines — on target;; Investment Income — above target. Overall,
Revenues are up $11 million.
• Expenditures: Salaries/Benefits-on target; Supplies/Contractual- on target; • Capital —
on target Overall: • Even $0
• Fund Balance: $9,000,000 Above Target.
Councilmember Guerrero asked about the possibility of increasing maintenance funding
and infrastructure investments using the projected additional revenues. Finance Director
Walters explained that there are no restrictions on how the city can use these funds and that
staff will prepare proposals for the Council outlining potential allocations. He noted that
during budget planning, staff seeks the Council's input to identify priorities so that the
proposed budget reflects the Council's key objectives. CM Williams explained the funds
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typically used for small capital items that staff will bring forward to the council.
Finance Director James Walters:.explairied that the', sales tax increase this year is only a
one-time sales tax. The 2nd quarterlof-this year, the entity that the sales tax came from will
change how they are operating in our city and that sales tax will go back to our regular
5-year forecast trend. Ordinance 17-M-34 states the city keeps a 26% fund balance level,
which is 26% of our operating expenses.
The Disabled Veteran Homestead Exemption (DVHS) continues to grow each year. In
2025, approximately 23% of Schertz homesteads benefit from the DVHS exemption,
meaning roughly 1 in 4 homes do not pay property taxes. Overall, 55% of Schertz
homesteads have some form of disabled veteran exemption. The total value of the DVHS
exemption in 2025 is approximately $5,668,000. Regarding state aid, in 2025 the total
funding available was $9.5 million. Twelve entities qualified for state aid and collectively
requested $54 million. Schertz requested $3.9 million and received $690,000. Additionally,
DVHS retroactive adjustments —including prior year refunds and current year
adjustments —resulted in a revenue loss of $675,000 for FY 2024-2025. Staff supports the
Disabled Veteran Homestead Exemption: (DVHS). The City of Schertz would like the state
to increase DVHS funding to help offset the revenue lost by the city as a result of these
exemptions.
Water and Sewer Fund:
Deputy City Manager Brian Williams explained CCNs—Certificates of Convenience and
Necessity. The Public Utility Commission of Texas regulates the CCNs and grants utilities
the right and obligation to provide service for water and sewer. The City of Schertz does
not hold the CCN for water and sewer in all areas of the city. The city partners with other
entities to provide service. For Water CCN we partner with: GVSUD-Green Valley Special
Utility District: NBU-New Braunfel Utilities; SAWS -San Antonio Water System. For
Sewer: SAWS, GVSUD and NBU.
Sewer: For Areas in Schertz' CCN
*Schertz contracts with CCMA for treatment. Schertz pays for additional treatment
capacity infrastructure in southern Scherz (recent agreement/approvals for south plant
expansion).
-Schertz has a contract with NBU to take a limited amount of sewer flow to treat
Water:
• Water for the area in Schertz' water CCN mostly comes from SSLGC, but some
comes from permits for water rights Schertz owns or leases for water from the
Edwards Aquifer (less than 10%).
• Schertz partnered with Cibolo to create CVLGC to provide additional water to meet
future needs. At this point, CVLGC only has groundwater leases, but has not obtained
permits to produce water
and also does not have wells or infrastructure to treat and transport water.
Water & Sewer Fund: W & S 5-Year Forecast: Contract with Frontier
Finance Director Walters explained that the drop. from 2025-2026 was that our new
contract with Frontier is that they will bill all :the commercial accounts. With Frontier
handling the commercial accounts, we no longer bill the commercial accounts. Therefore,
in 2026 expenditures/revenues will be reduced.
EMS Fund: Was trending financially in a negative direction. The city has made some
changes to improve the negative direction of the EMS Fund. Currently, the EMS Fund
Balance is improving and by 2030, the EMS Fund will be in a positive position. EMS
serves Guadalupe County, JBSA-Randolph, Marion, Santa Clara, Comal Co. ESD #6,
Selma, Universal City, Live Oak and Cibolo. All participants have agreed to increase their
funding to EMS.
-Change in Net Position ($895,346) for FY 25
• Participant Contribution increases:
•45% over three years (FY 26, FY 27, FY 28)
• Increased user/transport fees in FY 25, FY 26
• Consultant study
The Mayor recessed the meeting at 11:32 a.m. for lunch and reconvened the meeting at
11:52 a.m.
CM Williams distributed the Capital Improvement Program (CIP) sheets. The CIP is
organized into several categories and follows a 10-year planning horizon. The first five
years are detailed, while the remaining five years are more broadly outlined. The CIP is a
living document that may change over time based on evolving needs and circumstances.
The process begins by identifying and prioritizing all desired projects, followed by
scheduling the work accordingly. If the Council is wishing for staff to move something up
on the priority list, something else would need to be moved down. Rearranging the priority
can be addressed with Council's recommendations.
The FY 2025-2026 General Government Capital Budget represents the current year's
budget for Council adoption, while the subsequent years reflect the City's long-term
planning framework. Each department lists its projects in order of priority. Streets has
approximately $53,889,496 in planned projects; Parks has $5,392,575; and Facilities has
approximately $13,967,934. The total for General Government capital projects is
$73,250,005. Water Projects has $42,906.234 in planned projects and Wastewater Projects
has $27,761,000 in planned projects.
Councilmember Macaluso asked how projects are evaluated and prioritized, noting that
Maske Road is in very poor condition. Engineering Director Kathy Woodlee explained that
projects are not scheduled solely based on which roads are in the worst condition. Instead,
scheduling takes into account several factors, including available funding and the
remaining useful life of the roadway. Through the Street Preservation and Maintenance
(SPAM) program, the City aims to address roads at the optimal time to extend their
lifespan and avoid more costly reconstruction. She added that funding sources play a
significant role in planning and scheduling projects.
CM Williams stated that, in addition to the Parks CIP projects—Hilltop/Homestead Park
Development and Community Circle Park Development —he would like the Council to
consider acquiring land in the southern parts of Schertz for future city projects. Mayor
Rodriguez added that Pickrell Park and Thulmyer Fields should be included in park
improvement projects and suggested considering the addition of splash pads at other parks
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throughout the city.
Engineering Director Kathy Woodlee added that many of the CIP Wastewater Project and
Water Projects on the CIP list are large maintenance type of projects. They will not create a
difference in the floodplain. The city signed up with the Texas Water Development Board
to do a Flood Mitigation and Evaluation report. They will be starting the evaluation soon
and what they find will become future water projects for the city to consider.
Mayor Rodriguez would like staff to provide detailed planning on the projects Council
discussed today and explain what projects would be pushed down the list. Councilmember
Sheridan stated he has had several residents bring the streets to his attention the conditions
of their roads.
CM Williams would like to reiterate the prior discussions and emphasize that staff will
continue to operate within the framework of the City's Budget, Capital Improvement Plan
(CIP), and Strategic Plan.
Staff requests that Council:
1. Confirm alignment and provide validation on the current direction.
2. Discuss key issues anticipated on the horizon.
3. Identify any Council priorities that may not yet be reflected in staff s current focus.
Adjournment
Mayor Rodriguez adjourned the meeting at 12:52 pm.
ATTEST:
1'" r
Sheila Edmonds n, City Secretary
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