Fredericksburg City Council Regular Meeting – August 18, 2026

The Fredericksburg City Council met in regular session on Tuesday, August 18, 2026, at 9:00 AM at City Hall at East Campus. The Council approved consent items, denied a contested rezoning on North Milam Street, set the proposed maximum property tax rate for publication, scheduled the FY 2027 tax rate public hearing, and received the Chamber of Commerce quarterly update. Council member Tony Klein recused himself from the North Milam rezoning item. No final budget or tax rate was adopted.

Ceremonial Recognition and Council Comments

• Tim Dooley, former Planning & Zoning Commissioner, was recognized for more than 10 years of service.
• Council comments referenced a wildfire briefing with Chief Bizzle and Senator Sparks, the Muse Hotel construction tour, Coffee with the City Manager on the new UDC, the airport advisory board, a Gillespie County Commissioners Court meeting, and a meeting with Senator Ted Cruz's regional director about a pending federal flood declaration.

Consent Calendar

• Approved the regular City Council minutes of August 4, 2026.
• Approved the Bestfest street closure for one southbound traffic lane and the adjacent parking lane on North Adams near Marktplatz from October 16-18, 2026.
• Approved the 2027 Fourth of July Parade and Fireworks Schedule.
• Approved Ordinance 2026-29 amending Health Department fees.
• Consent items passed in a single motion without separate discussion.

Rezoning Request DEV-2026-82-ZC (604, 608, and 610 North Milam Street)

• Applicant Anna Hudson of Landmark Planning and Advisors requested a change from Single Family Residential (R1) to Neighborhood Commercial (C1). She argued the corridor is a busy highway, C1 is consistent with the Comprehensive Plan's mixed-use corridor designation, the uses would be low-intensity, and recent nearby approvals set precedent. She also criticized the P&Z process, saying the motion and second were made after commissioners discussed the case outside the hearing and that the decision should be based on current regulations, not a 2018 denial.
• Staff, through Development Services Director Cliff Cross, said the Comprehensive Plan is one factor but each rezoning must meet zoning findings of fact. Staff noted P&Z denied the request 8-0 after finding a lack of public benefit and potential negative impact on adjacent properties.
• The mayor acknowledged the applicant's public-information request and cautioned against assuming facts about the P&Z discussion.
• During council discussion, one council member said the resale argument for the 707 North Milam precedent was not compelling and emphasized protecting and preserving the neighborhood.
• The vote upheld the P&Z denial. The motion to deny carried 3-1; Councilman Klein recused himself. Four votes would have been required to overturn the denial.

Public Comments & Testimony – North Milam Rezoning

• Sarah Wanick, 708 North Milam, supported the rezoning, citing historic frontage-lot distinctions, the corridor's mix of uses, and comprehensive-plan expectations.
• Cindy Spaith, 608 North Milam, supported; she restored the 1907 home and its barn/STR and said three of four property owners on her side supported the change.
• Connie Cranwalgie, 702 North Milam, opposed, citing traffic, school buses, street parking, and safety hazards.
• Jamie Sparks, 406 West College, opposed; he listed C1 uses and possible conditional uses, plus parking, drainage, and flood concerns.
• A 602 North Milam owner opposed, saying Milam is a residential street, not a highway; she also noted 35% of mailed notice recipients returned protests and that the three applicant properties did not return notices.
• The mayor noted the packet contained roughly one letter in support and six or seven in opposition.

Rezoning Request DEV-2026-83-ZC (111 Owl Lane)

• This request involved a .90-acre C2-to-R1 change and a 1.35-acre R1-to-C2 change at 111 Owl Lane. It had been tabled by the Planning & Zoning Commission, so the City Manager noted there was no City Council discussion and no action was taken.

FY 2027 Proposed Budget and Tax Rate

• City Manager Clinton Bailey described a conservative "holding the line" budget: expenses slightly down, revenues slightly up, and inflation assumed at about 3.5 percent. The budget uses tiered pay raises of 5.5 percent for the lowest-paid employees, 4.5 percent for mid-range, and 3.5 percent for highest-paid. Of roughly 12 requested new positions, three are added in Parks, with HOT funds or contract savings used to reduce general-fund impact. Health insurance premiums increased 10 percent.
• Finance Director Krista Wareham presented a balanced General Fund of about $27.07 million, with 1 percent revenue growth and 1 percent expense reduction. Personnel costs are up 7 percent, maintenance/operations down 1 percent, and capital down 47 percent because City Hall projects were completed. Adding deferred personnel requests in future-year modeling would produce about a $560,000 deficit. Police are 36 percent of the General Fund and 44 percent of personnel costs.
• Tax rates presented: no-new-revenue rate $0.241342, voter-approval rate $0.260884, de minimis rate $0.25362, current rate $0.227427, and proposed budget rate $0.246646. The proposed rate would generate about $9.3 million in property tax revenue.
• For a median-valued homestead of $450,690, the no-new-revenue tax bill would be $1,087.70 and the proposed budget rate bill would be $1,111.61, about $23 more per year. The voter-approval rate would add about $64 more, for a total increase of about $88 per year.

Public Comments & Testimony – Budget and Tax Rate

• Eric Hamerson, a Fredericksburg resident, said the county budget included a $25,000 increase from the city and a $25,000 increase from the county for volunteer fire departments, not $60,000 from each. He recommended using any additional funds for core city services such as law enforcement rather than increasing funding beyond the county match.
• Tom Musselman said inflation should be part of budget discussions, supported the proposed tax approach, and said the roughly $84 annual cost at the voter-approval rate was modest compared with the services provided.

Chamber of Commerce Quarterly Update

• Chamber President/CEO Jim Mikula reported 636 active members, including 78 new members year to date. In the mid-year survey, 15 of 22 respondents reported year-over-year growth, and 68 percent were satisfied or very satisfied with the Chamber.
• Members' challenges included inflation, high interest rates, increased competition, staffing, and niche positioning. Their requests to the Council included continued hotel occupancy tax grants for nonprofits, following the Comprehensive Plan, predictable permitting timelines, and the relief route.
• Notable statistics: taxable sales for January-May 2026 were $4.4 million above the prior-year period and ahead of 2024; the Food and Wine Festival was named in a Forbes top-10 list; festival ticket sales were 13 percent ahead of the prior year; sponsors were up 10 percent; about 1,400 tickets were sold; and a new partnership with the Southern Smoke Foundation will support hospitality workers in need.

Future Agenda and Executive Session

• Future items included a September 1 meeting with the Waldorf Astoria development, an alternate roadway alignment, a potential annexation agreement, and a St. Mary's turkey dinner street closure; Citizen University on August 25; special budget meetings August 26 and September 8; the budget/tax-rate public hearing September 8; and final FY 2027 tax rate and budget adoption September 15.
• The Council recessed into executive session for agenda items 11A (economic development incentives) and 11B (critical infrastructure facility). It reconvened at 11:46 a.m., took no action on either item, and adjourned.

Key Outcomes

• Consent calendar approved unanimously.
• Rezoning DEV-2026-82-ZC denied; P&Z denial upheld on a 3-1 vote, with Councilman Klein recused.
• Rezoning DEV-2026-83-ZC received no action because it remains tabled by P&Z.
• Council set the proposed maximum not-to-exceed property tax rate at $0.260884 per $100 of valuation for publication and public hearing. This was not final adoption.
• Council scheduled the FY 2027 tax rate public hearing for September 8, 2026, at 9:00 a.m. in council chambers.
• Final FY 2027 budget and tax rate adoption is scheduled for September 15, 2026.