Kerrville City Council Meeting: Budget, Flood Recovery, and Park Discussion - August 25, 2026

The Kerrville City Council met on August 25, 2026, at 6:00 PM at City Hall. The meeting was dominated by the Fiscal Year 2027 budget presentation, public outcry over flood recovery efforts, and a discussion on the future of Granger MacDonald Park. Council took action on a natural gas rate settlement, tax increment financing grants, tax rate public hearing dates, and several board appointments.

Consent Calendar

• Approved unanimously (with Item E removed). Items included Ordinance 2026-13 (zoning change at 1273 Bandera Highway), 2nd reading adoptions of the 2024 International Building Codes and related codes (Ordinances 2026-14 through 2026-18), 2nd reading of KPUB rate schedules (Ordinance 2026-19), and approval of minutes and the Kerr Central Appraisal District's FY2027 Budget.

Public Comments & Testimony

• Denny Foster (Resident/Business Owner/EIC): Expressed full support for the "Love Where You Live" campaign, encouraging residents to shop locally to generate tax revenue and support local jobs.
• Jamie Morales (Resident/Rebuild National Disaster Survivors Association): Pleaded for better communication regarding flood debris removal sweeps, guidance for reporting additional damage, and increased financial assistance, stating she felt "left trying to figure out what to do next on my own."
• Amy Espinoza (Resident): Expressed deep frustration that city drainage maintenance performed before the 2025 flood was not repeated in 2026, contributing to flooding on her street. She urgently requested the city assist families in rebuilding with materials like sheetrock and lumber, stating, "What good is a rebuild park to a child who has no home to go back to?"
• Bud Bolton (Resident/Business Owner): Described flooding at his home on Lois Street that occurred in May 2026 when the river did not flood, attributing the repeated damage entirely to a long-standing city drainage system failure.
• Jacob Shively (Resident/Rental Owner): Supported Bolton's claim, arguing the state drain under Highway 27 is grossly inadequate for the watershed, causing backups. He urged the council to advocate for a larger state drain.
• Kevin Hefner-Morales (Resident): Requested the discontinuation of Automated License Plate Readers (ALPRs) in the city, citing concerns over Fourth Amendment rights.
• Barbara Ferguson (Resident): Opposed the use of Tax Increment Financing (TIRZ) grants (Items 5C/5D), arguing the funds could be used to meet unmet needs from the flood. During the Granger MacDonald Park discussion (Item 5F), she urged the city to retain ownership to guarantee permanent public access.
• George Bruddy (Former Councilmember): Paid tribute to the late former councilmember Warren Ferguson, highlighting his cooperative spirit.

Discussion Items

• Item 2A: FY2027 Budget Presentation (J Behrens, Finance Director): The proposed citywide budget includes $122 million in revenues and $127 million in expenditures. The General Fund budget is $41.48 million, a 4.2% ($1.67M) increase over FY2026, largely driven by $846,000 in group health insurance costs. The flood's damage estimate is between $65M and $100M. Reserves are strong enough to potentially utilize $2-3 million for repairs while maintaining a 15% minimum. The Water Fund budget is $18.3M, proposing a 5% base rate increase and a $1.70 sewer base rate increase.
• Item 5A: Atmos Rate Settlement (Resolution 37-2026): The council approved a negotiated settlement resulting in a $13.37 per month increase for residential customers and $0.4482 (44.82 cents) for commercial customers. Councilmembers expressed frustration over the monopoly but acknowledged the negotiated rate was the best achievable.
• Item 5E: Tax Rate Public Hearing (Resolution 41-2026): Council debated setting the public hearing at the Voter Approval Rate ($0.5846) or the Voter Approval Disaster Rate ($0.5995). Staff explained the disaster rate allows an 8% cap over the no-new-revenue rate due to the flood. The estimated difference in revenue between the two rates is approximately $490,000. Council set the public hearing for September 8, 2026, at the disaster rate.
• Item 5F: Granger MacDonald Park (Discussion): Asst. City Manager Hornes laid out three options for the park: 1) a six-month delay, 2) deeding the property to the Upper Guadalupe River Center (UGRC) with a reversion clause, or 3) abandoning the property back to the original developers. Several citizens spoke for and against the project. The council reached a consensus to direct staff to pursue Option 2 (deed to UGRC with a public park reversion clause).

Key Outcomes

• Atmos Rate Increase: Unanimously approved the negotiated settlement (Resolution 37-2026).
• Airport Budget: Voted unanimously to approve the FY2027 budget for the Kerrville-Kerr County Joint Airport Board but denied the requested $25,000 capital fund contribution.
• TIRZ Grants: Unanimously approved an additional $50,000 for parking lot improvements (Resolution 39-2026) and an additional $50,000 for exterior enhancements (Resolution 40-2026), both within TIRZ Zone #1.
• Tax Rate Hearing: Unanimously set the public hearing for the proposed property tax rate for September 8, 2026, adopting the Voter Approval Disaster Rate of $0.5995 as the advertised rate (Resolution 41-2026).
• Granger MacDonald Park: Council directed staff to draft a proposal to deed the property to the Upper Guadalupe River Center subject to a reversion clause ensuring it remains a public park.
• Board Appointments: Ile Reeves (BBAA), Regina Gordon (Library), Lori Finkbeiner & Timothy Truett (Recovery Coalition), and Katie Kane (Planning & Zoning) were appointed.
• Cultural Arts District: Unanimously approved transferring management of the Board to the CVB Foundation (Resolution 38-2026).