Fredericksburg City Council Special Meeting – August 26, 2026

The Fredericksburg City Council held a special meeting on Wednesday, August 26, 2026, at 9:00 AM at City Hall at East Campus to review the proposed FY 2027 budget and tax rate and to consider a FY 2026 budget amendment for the Convention and Visitor's Bureau (CVB). The meeting adjourned at 10:14 AM. No public comments were made.

Convention and Visitor's Bureau FY 2026 Budget Update

• Lisa Oliveira, CVB President/CEO, requested council approval to move $1 million back into the CVB's FY 2026 operating budget. The funds had been moved in April 2026 and spent as the fiscal year closed.
• The council unanimously approved the $1 million FY 2026 budget amendment.
• Council members discussed scheduling a joint CVB board/council meeting, possibly after the CVB's October off-site, to begin working on the FY 2028 budget.

Proposed FY 2027 Budget and Tax Rate

• Finance Director Krista Wareham presented the proposed FY 2027 budget. Compared to FY 2026, the citywide proposed budget is a 1% revenue increase and a 1% expense decrease; the general fund is a 2% revenue increase after accounting for the proposed tax rate and a 2% expense decrease; enterprise and special funds are budgeted with a 1% revenue increase and flat expenses.
• Estimated FY 2026 year-end results: $75.4 million in citywide revenues and $75.8 million in expenses; $26.6 million in general fund revenues and $25.5 million in expenses; $48.8 million in enterprise/special fund revenues and $50.3 million in expenses.
• The proposed FY 2027 tax rate is $0.246646 per $100 of valuation, compared to the no-new-revenue rate of $0.241342 and the adopted FY 2025 rate of $0.227427. For the median-valued homestead valued at $450,690, the estimated tax bill would be $1,111.61, compared with $1,087.70 at the no-new-revenue rate and $1,075.86 in the prior year.
• The voter approval rate of $0.26084 would generate an additional $841,445, a 9.39% increase; the no-new-revenue rate would generate about $200,000 more than last year, a 2.17% increase. Wareham noted a de minimis rate would generate about $600,000.
• Sales tax collections were nearly $9.1 million through August, and the budget assumes a conservative less-than-1% increase. Tim, a county official who tracks sales tax, said the city was up 2.55% over FY 2025, with the last five months up more than 6%; the county was up about 3.4%; inflation was 3.4% in July after peaking at 4.2% in May. He was uncertain whether the trend would continue.
• The tourism fund was ahead of budget because a delinquent account was paid in full with penalty and interest, about $650,000. Hotel occupancy tax revenue is budgeted flat at $6.037 million.

Personnel and Position Requests

• Of 13 requested positions, five were included in the proposed budget: an applied tech, a crew worker, a deputy emergency management coordinator shared with the county, and a school resource officer partly funded by FISD. General fund positions total about $244,000; enterprise fund positions about $76,000.
• The council discussed the hire date for the deputy emergency management coordinator. The emergency management coordinator asked to hire as soon as possible because of workload and federal flood reimbursement duties; the council agreed to leave the position in the budget.
• Not included were four police officer positions, three fire/EMS positions, and a GIS coordination position.
• The police chief reported the department is down to two open positions from about six, with one conditional job offer pending and testing planned to fill the remaining positions; several officers are in the academy, with two completing in November and five starting September 1.

Council Priorities and Outstanding Items

• Council members reviewed their budget priorities, including water supply, infrastructure and Main Street initiatives, police/fire/EMS, HOT fund expansion, parks, transportation, and economic development.
• Mayor Briley expressed strong support for adding incremental funding for the six volunteer fire departments, calling them a low-cost supplement to full-time services; staff suggested an increase in addition to the existing $309,000 shared rural fire budget.
• Council discussed expanding hotel occupancy tax (HOT) revenue collection in the county, including a county collection specialist, and a possible long-term legislative effort to obtain a local exception for expanded HOT uses.
• Public Works staff presented Friendship Lane traffic signal needs: a consultant study completed August 5, 2025, found Creek Street at Friendship Lane at level of service F. Two traffic signals would cost about $1 million total, with Creek Street estimated at $600,000 and another three-legged intersection at about $400,000. Staff will talk with the school district about possible partnerships.
• Police and fire/EMS needs at the former City Hall were reviewed: full renovation of the fire/EMS upstairs area was initially estimated at about $2 million; police renovation of the old utility building was estimated at $430,000-$445,000 if contracted, or about $300,000-$330,000 if done in-house. No funds are in the proposed budget for these renovations.
• Staff noted utility rate studies are underway for water, wastewater, and electric, and a stormwater vegetation management program is under review with reduced capital.

Reserve Use and Tax Rate Discussion

• Councilmember Neffendorf proposed using about $2 million of the $10 million in unrestricted general fund reserves above the $6 million safety reserve for traffic signals, former City Hall renovations, and other priorities, saying the money was saved and could be spent wisely.
• Several council members and staff cautioned against using reserves for recurring operating expenses, especially with potential state property tax reform that could cap future revenue growth. Mayor Briley said he preferred the voter approval rate because of those uncertainties.
• Staff estimated that planned developments could add about $1 billion to the tax base over three to five years, worth about $2.6 million at the current tax rate, but cautioned the projects are not guaranteed.

Key Outcomes

• Approved unanimously the CVB FY 2026 budget amendment to move $1 million back into the operating budget.
• No formal action was taken on the FY 2027 budget or tax rate; the next step is the public hearing at the next budget meeting.
• Council agreed to bring back individual priorities and reserve-spending ideas for further discussion, and to consider a strategy session in early November.
• Staff will continue working with the school district on Friendship Lane traffic signals and will provide additional capital priority information to council.