Rockport City Council Workshop Summary - July 28, 2026

This workshop focused on the FY2026-2027 budget, covering hotel occupancy tax (HOT) allocations, the Convention & Visitors Bureau (CVB) structure, the proposed tax rate, the COPS grant for additional police officers, and park funding. Council members discussed how to balance competing priorities while providing relief to taxpayers. A key theme was the unexpected impact of Proposition 9 (business personal property exemptions) on property values, which reduced the city's taxable value by $26 million. Council gave direction to use a portion of excess reserve funds (above the 180-day policy) and proceeds from the sale of the gas company to lower the tax rate while still preserving funding for parks and the police grant.

Public Comments & Testimony

• Jane Bachner (Jatine?): Spoke in support of the CVB, noting it is still in its early stages and needs additional funding for marketing and branding. Emphasized that HOT collections are limited ($1.4–1.5 million) and that organizations should not expect to fill budget gaps. Stated that June/July revenue numbers have ticked upward.
• Craig Griffin: Encouraged council to support the CVB budget, highlighting that Rockport faces competition from Port Aransas (6x HOT budget) and Corpus Christi (12x HOT budget) and that advertising dollars are critical for tourism. Also pointed out that based on a $103 average room rate, every $1,000 in CVB funding requires selling 139 room nights.
• Jennifer Day: Requested a clear schedule for upcoming budget discussions and approval timelines, noting that the CVB board had requested a meeting with the city manager to discuss the budget but had not yet been scheduled. Also noted that 57% of visitors stay in STRs, which generate three times more revenue than hotels.

Discussion Items

• HOT Allocation and CVB Board Composition: City Manager Vanessa Shrauner presented the proposed HOT allocation: $1.3869 million total, including $750,000 for CVB, $350,000 for grants, $92,000 for a short-term rental (STR) compliance position (salary/benefits/equipment), $55,000 for the visitor center, and $50,000 for park events (down from $100,000). The city's internal overhead is $182,900. The CVB board cannot legally allocate funds due to conflicts of interest (most members receive funding). A subcommittee (Jeff, Jatine, Craig, Diane) developed the proposed split. Council discussed adding $20,000 for the Maritime Museum (requested by Councilmember Rangel for artifact preservation) and $50,000 for the Art Center (which saw a cut from $250,000 to $100,000). The STR position is currently handled by Judy (code enforcement) but is taking all her time; she would apply for the full-time role. The STR registration fees brought in $70,000 this year, nearly covering the $92,000 cost. Council agreed to commit to the STR person and the additional requests, bringing the total to approximately $1.55 million. A proposal to use reserve overage for one-time CVB branding was deferred to a future meeting, with council wanting a formal RFQ/RFP and presentation before committing funds.
• Tax Rate and Budget Review: Finance Director Robbie presented budget updates. The city's taxable values rose only ~1% due to a $26 million loss from Prop 9 exemptions. The voter-approved tax rate is estimated at 0.427 (up from 0.426), an increase of about $67/year for the median home. The General Fund has a 21-day surplus (21 days above the 180-day policy), equivalent to about $871,000. The city received a COPS grant for four officers; adding a fifth supervisor positions cost an estimated $1,052,261 in the first year (including vehicles) and decreasing over five years. A proposal to use fund balance to buy down the tax rate was advised against by TML and GFOA, but council expressed strong interest in reducing the rate using reserve funds and gas sale proceeds.
• Parks Funding: $800,000 in tax notes for park improvements was included in the preliminary budget. Council members debated whether to fund this through debt or pay it from the gas sale proceeds to avoid increasing the tax rate.
• COPS Grant: The grant covers four officers; a fifth supervisor was added at council's request. The total city cost over five years (including grant reimbursement) is $2.7 million from gas sale proceeds. Council emphasized the importance of accepting the grant after years of effort.

Key Outcomes

• Direction on HOT Allocation: Council directed the city manager to commit to the proposed HOT allocation including the STR position, the $20,000 increase for Maritime Museum, and the $50,000 increase for the Art Center. The CVB branding exercise was deferred pending an RFQ and presentation.
• Direction on Tax Rate and Budget: Council directed staff to return with a budget that reduces the tax rate from the estimated 0.427 level (voter-approved rate) by using a portion of the 21-day reserve surplus and gas sale proceeds, while still funding the COPS grant (five officers) and the $800,000 for park improvements without taking on new tax notes. The specific reduction amount is to be determined in the next workshop (August 11, 2026) after Anna (tax assessor) provides final calculations. Council agreed not to draw reserves below 180 days.
• Next Steps: Staff will prepare multiple scenarios (different numbers of officers, different park funding levels) for council to review at the next budget workshop. The proposed budget must be presented by the city manager at the August council meeting per city charter.