City of Fredericksburg, Texas — City Council Special Meeting: FY 2027 Budget Review (July 14, 2026)

Mayor Randy Briley called the meeting to order at 9:00 AM on July 14, 2026, at City Hall at East Campus (2818 E. U.S. Hwy. 290, Fredericksburg, Texas). The special session was devoted to a detailed overview of the requested Fiscal Year 2027 city budget, led by Finance Director Krista Wareham and City Manager Clinton Bailey, following an emergency management briefing. No official minutes were available; this summary is drawn from the agenda and the meeting transcript. (The transcript's opening timestamp is garbled as 'July 4'; the agenda and context confirm the meeting date of July 14, 2026.)

Emergency Management & Flood Watch Update

• Emergency Management Coordinator Ashley Morris reported a flood watch in effect through Thursday at 7:00 p.m., with 1–5 inches of rain expected widely and up to 10 inches possible in some locations; areas south of the county had already received 10–12 inches. She attributed the risk to a stalled mesoscale convective vortex (MCV) currently centered near Uvalde.
• Six road crossings were impacted as of the morning; no emergency calls for service or property damage had been reported. An additional 2–4 inches could fall on top of roughly 4 inches already received across the county.
• The Emergency Operations Center was likely to be activated at a partial Level 3 (hybrid) activation beginning that evening, and a city-county coordination call was scheduled for 12:30 p.m.
• Morris urged residents not to drive through flooded roads and to report any flood damage to help support a potential state/federal disaster declaration.

Discussion Items

Budget Overview & Fiscal Outlook

• Staff have compressed the budget process from 12 meetings in 2022 to roughly three to four workshops at Council's request; this was described as one of the last scheduled budget workshops, with at least one more expected.
• City-wide year-to-date figures (run in early July) show approximately $58 million in revenues and $57 million in expenses, with some June journal entries pending. The FY 2027 request budgets revenues at 1% below FY 2026 and expenses at 1% below, keeping electric, water, and sanitation rates flat.
• Sales tax, the largest general fund revenue source at 35%, is budgeted conservatively at $9.3 million (listed elsewhere at $9.2–9.25 million) despite a likely finish around $9.4 million. Property tax provides about 31% of general fund revenue; the current rate of $0.227427 generates $8.9 million, about $8 million of which goes to the general fund, with a debt rate below $0.03.
• New construction taxable value fell from $204 million last year to $84 million this year, a 59% reduction equating to roughly $275,000 in lost revenue for FY 2027. A one-cent property tax change equals about $350,000.
• The general fund is projected at a 2% revenue reduction and a 4% expense reduction. Recurring expenses are 90% of the general fund budget (personnel about 55%); the forecast leaves about $2.3 million for capital and debt versus a recent average of roughly $2.6–2.7 million, creating a projected deficit that may require the voter-approval tax rate to balance.
• Certified valuations and the no-new-revenue and voter-approval rates are expected on July 25, 2026. The agenda's Taxpayer Impact Statement lists the median-valued homestead at $473,057, with FY 2026 taxes of $1,075.86 versus $971.31 in FY 2025; the FY 2027 estimate was not yet calculable.
• Krista Wareham reviewed Council priorities, including exploring the use of hotel occupancy (hot) funds for public safety, keeping infrastructure strong, equipping employees, ensuring water supply, and re-engaging with the Comanche Nation.
• City Manager Clinton Bailey noted declining property values, inflation at about 4.2%, and employees working second jobs (he estimated 25–30% of public works employees), framing his priority as retaining existing employees rather than adding new positions.

Personnel & Pay Structure

• Twelve personnel requests were submitted, mostly in the general fund: four patrol officers, three firefighter/EMT-paramedics, one deputy emergency management coordinator, two parks positions (aquatics maintenance tech and crew worker), and a GIS administrator split across funds. The general fund cost is $765,000, with fire/EMS positions 50% funded by the county. Staff initially loaded only the two parks positions (plus a special events coordinator in enterprise funds) into the budget.
• Parks Director Andrea documented a 10-year workload increase with only 1.5 added staff: special event days rose 82% (186 to 338), park events days rose 372% (15 to 64), travel teams grew from zero to 15+, and Christmas lighting expanded from one night with about 5,000 visitors to 55 nights. She cited a contracted pool maintenance provider costing $50,000 for roughly four hours of work per week, an unfilled Market Square gardener position open nearly eight months, and major new facilities coming online in 2027 to justify the two positions.
• General fund overtime is budgeted at $482,000, with $430,000 of that for fire and police; staff noted hotel occupancy (hot) funds could supplement public safety costs. The city recently received a $42,000 reimbursement (TDEM) for the Crab Apple Fire, though staff noted only certain expenses are eligible.
• A tiered pay increase proposal from HR was discussed: for example, 6.5% for the lowest-paid employees, 5.5% for mid-range, and 4.5% for the highest-paid, so that dollar increases are more equivalent across the board. The budget currently includes a 2.5% increase, and staff asked Council to consider an option that at least addresses inflation.
• Council members expressed support for retention-focused raises, citing the 2022 decision to provide 9% raises when inflation was 9%, prior market adjustments in 2014 and 2021, and a past dollar-an-hour-or-4%-whichever-is-higher approach. One councilmember noted that parks often gets cut at the end of the budget cycle and acknowledged the department's increased workload with minimal staffing growth.

General Fund Capital & Department Requests

• Police: the $385,000 vehicle budget covers seven police vehicles (four marked Chevy Tahoes and three unmarked units switching from Tahoe to Chevy Traverse, saving $15,000–$16,000 per vehicle) plus one animal control truck. The chief also proposed remodeling the old utility billing building into a downtown substation with 24-hour lobby access, direct dispatch communication, a safe room, and employee shower facilities, plus a training/equipment warehouse to shelter weather-sensitive equipment (communications trailer, UTV/ATV, response vehicle, armored vehicle). Grant applications for the facility have been denied.
• Traffic signals: two new signals on Friendship Lane are proposed, about $600,000 at Creek Street and about $400,000 at a second location (Adams, Mylum, or Post Oak), totaling about $1 million, plus about $50,000 per year in maintenance. The city currently has no traffic signals; a traffic impact study shows these intersections failing or near-failing at certain times of day, with uncontrolled mid-block pedestrian crossings.
• A $100,000 request would fund public outreach materials to prepare for a potential 2028 transportation bond election.

Enterprise Funds & Utility Capital Projects

• Enterprise funds show year-to-date revenues of about $36 million and expenses of about $37 million; FY 2027 is projected at a 1% revenue reduction and a 1% expense increase. Projected revenues include electric $15.5 million, water/wastewater $10.2 million, sanitation $4 million, EMS about $6.4 million (held flat), stormwater $1 million, and tourism hot funds flat (expected to exceed this year's budget by $500,000–$600,000 from a delinquent account paid in full).
• EMS inter-facility transfers are projected to drop about 4%, from roughly 700-plus last year to about 650–680. EMS uncollectible accounts have grown from about $500,000 to $700,000–$800,000; staff said the prior collection agency (Wakefield) was acquired and stopped accepting medical collections without notifying the city, and a new collections company has been engaged. Council requested a 90-day follow-up and a regular review cycle.
• Golf course finances have improved from about a $700,000 annual deficit to about $500,000 in the black; staff noted planned capital reinvestments (including greens replacement and a roughly $1 million cart facility) and discussed whether some golf course revenues could be shared for park improvements.
• FBG 30 electric reconductor: the $1.2 million construction cost is not in the budget; a $60,000 design is proposed for FY 2027 with construction in FY 2028. Two other reconductor projects are in design for FY 2027, and about $400,000 in electric debt rolls off this year, freeing capacity.
• New groundwater well: $100,000 is budgeted for the legal and permitting framework (a draft landowner agreement is under review); the red-line construction item is roughly $4 million, with impact fees and a possible future revenue bond discussed. Two grants have been applied for (one due at the end of July); the larger grant application is based on an estimate near $29 million, with public works staff estimating about half that. The connecting pipeline is estimated at roughly $10 million. The project targets completion around May 2029, with a 16-inch well drilled over the existing 8-inch casing.
• Bowes Lane lift station: design only is proposed for FY 2027, with construction possibly in FY 2028 under a water revenue bond.
• Sanitation: the fiber-to-scale-house project will be completed in FY 2026 and was removed from FY 2027. Transfer station design and professional fees ($180,000) are in the budget; a future revenue bond may be needed for the transfer station because the federal grant program is no longer offered.
• North Llano stormwater drainage: originally estimated at $2.6 million (2019 grant and zero-interest loan from the Texas Water Development Board), the project now costs about $5 million. The city has committed $2.6 million and is seeking partnership with TxDOT's 2028 North Llano pavement project; staff may bid the shovel-ready plans to obtain hard costs.
• Other requests: wayfinding sign replacement estimated at $500,000 and server replacements identified by IT as a priority given 9–12 month lead times.

Public Comments & Testimony

After about 90 minutes of budget discussion, the Council took a short break and reconvened for public comments.

• Tim Dooley, a Planning & Zoning Commission member, asked whether the city planned a drainage study (potentially with the county) for the quadrant between Highways 16 and 87 before development on Bowes Lane and Homing Lane proceeds. Staff responded that no city budget exists for such a study, that County Engineer Melissa Acker's grant application has not been successful, and that a study could cost $200,000–$500,000 depending on scope. The Mayor offered to request an update from the county.
• A second commenter recommended moving the September 8 public comment opportunity earlier in the budget process so public input could inform decisions before they are finalized. The Mayor said Council would look at moving public comment to the August meeting, subject to the statutory timing for budget adoption after the required hearing.

Key Outcomes & Next Steps

• No formal votes were taken; the meeting was a discussion/workshop. Direction expressed included support for a tiered pay increase (e.g., 6.5%/5.5%/4.5%) with an inflation-sensitive option, adding the two parks positions and the special events coordinator, pursuing FY 2027 design work for the groundwater well, Bowes Lane lift station, and FBG 30 reconductor, considering impact fees for the new well, and conducting a 90-day review of EMS collections.
• Remaining schedule: July 25, 2026 — certified valuations and no-new-revenue/voter-approval rates; August 4, 2026 — regular Council meeting with truth-in-taxation presentation; August 14, 2026 — deadline to submit the proposed budget to the City Secretary; August 18, 2026 — regular Council meeting to set the proposed FY 2027 tax rate and hold a public hearing on the budget and tax rate if the voter-approval rate is exceeded. A joint meeting with county commissioners was scheduled for that afternoon to discuss shared budgets (fire/EMS), and an additional budget work session was planned for the week after August 18.
• The meeting was adjourned following public comments.