San Antonio Budget Work Session - September 15, 2026

The City of San Antonio held a budget work session on Tuesday, September 15, 2026, at 1:03 PM. The meeting focused on employee benefits and compensation, presentations on all other departments, and initial discussions on budget amendments. City staff presented significant increases in health care costs, particularly due to out-of-network IDR claims, and proposed a combination of premium adjustments and plan design changes. Councilmembers debated potential budget amendments totaling $65.2 million over two years, including proposals to use TERS funds, adjust the property tax rate, and restore certain programs. The city manager clarified that a property tax increase requires seven votes and that failure to pass it would necessitate an additional $75 million in cuts.

Discussion Items

• Employee Compensation and Benefits (Renee Frieda): The city employs 13,746 authorized positions (4,800 uniformed, 8,900 civilian). Average civilian base compensation is $65,000; uniformed firefighters average $81,000; police average $85,000. Total compensation including benefits averages $95,000 for civilians and $176,000 for uniformed personnel. The proposed FY27 budget adds nearly $49 million in employee compensation, including 3% increases for civilian and LGC employees, 4% for police, and 5% for firefighters per collective bargaining agreements. Salary compression adjustments are proposed for Pay Plans A and B.

• Health Care Costs and Mitigation: Medical claims are projected to increase from $138 million in FY25 to $185 million in FY26 (34% increase), and to $190 million in FY27. Out-of-network IDR claims, driven by the No Surprises Act, rose from $17 million to over $40 million. Prestige ER, operating four freestanding ERs in San Antonio, accounted for about 90% of IDR claims. Effective September 1, Prestige committed to stop challenging city claims through IDR, but savings are not yet reflected in the proposed budget. The city pursues additional strategies including legislative solutions and plan design changes. Proposed benefit reductions include tuition reimbursement ($450,000 savings), student loan repayment assistance ($525,000), and benefit value advisor ($280,000).

• All Other Departments (Freddie Martinez): Presented 22 departments and offices with a combined budget of $173.4 million, covering community services, operating support, and internal services. Key proposals include: $5.5 million for 311 customer service (20 positions), $37 million for downtown operations (159 positions) including a proposed revenue adjustment for event parking rates (max $30) generating $763,000, reductions in historic preservation including reorganization of positions, $1.6 million for integrated community safety office (9 positions), $4 million for planning (23 positions, elimination of one position), $5.2 million for resilience and sustainability (reduction of three positions, elimination of $2.1 million transfer from general fund), $10.7 million for transportation (14 positions), $3.1 million for World Heritage Office (14 positions, reductions in gastronomy program and festival scope). Other departments: city auditor ($3.5M), city clerk ($9.9M including $1.6M for bond election), city manager ($4.5M, 15 positions), city attorney ($24.6M, 95 positions), communications ($9.2M, planned consolidation in FY28 saving $3.1M), government affairs ($1.9M), military/veteran affairs (elimination of Hiring Our Heroes program), mayor and council support ($18.3M, includes 4% salary adjustment for mayor/council, $40,000 reduction in support staff food, 25% reduction in travel), building and equipment services ($156.8M), finance ($34.6M, elimination of three vacant positions, fee adjustments including conduit debt issuance fee minimum of $10,000 or 0.1% and 3% credit card administrative fee), information technology ($143.5M, 356 positions), innovation ($1.6M, 8 positions), budget office ($3.4M, 20 positions), risk management ($33.3M, 29 positions, elimination of one software), non-departmental (includes 2% sales tax collection fee, $6.2M for facility maintenance, reductions in professional contracts and Travis March funding), and transfers ($4.7 million from general fund to other funds).

• Budget Amendments Overview (Justina Tate): The proposed budget was presented August 13, followed by eight work sessions, 11 town halls, and two public hearings. The FY27 budget faced a $158 million shortfall, addressed through $90 million in expense reductions, property tax capacity, and fee increases. Councilmembers have proposed amendments totaling $65.2 million over two years, including a reduction to the property tax increase by 1%. Attachment 4 from the memo lists revenue adjustments suggested by councilmembers (booting fees, vacant lot abatement fees, parking fine increases, river barge ticket fee, hazmat fee) totaling $1.4 million annually. City Manager Eric Walsh emphasized that the proposed budget maintains a 5.1% revenue increase and 4.1% expense growth, shifting toward sustainability. He clarified that changing the tax rate requires 60% (7 votes) of council; if not approved, an additional $75 million in cuts over two years would be needed, bringing total cuts to $165 million.

• Councilmember Proposals and Positions:

  • Councilmember McKee Rodriguez proposed using inner city TERS funds to cover budget items, but later clarified that since no filled positions are being eliminated (all 49 employees are being reassigned), his proposal is withdrawn. He supported attachment 4 revenue items and emphasized that a property tax increase protects vulnerable residents.
  • Councilmember White opposed any property tax increase, citing a $400 million general fund growth from 2022 to 2027 ($1.36B to $1.76B). He proposed closing the budget gap without a tax hike through strategic cuts, fee increases, and a 2% non-personnel reduction across departments. He also requested funding for ten additional SAFE officers (one per district) at $1.6 million, with options including reducing council office budgets by $50,000 each.
  • Councilmember Spears requested cost-of-service analysis for TERS and code enforcement. She supported revenue items and emphasized the need for SAFE officers, offering multiple reduction options to fund them.
  • Councilmember Castillo supported attachment 4 and the library fee increase. He advocated for restoring tuition reimbursement and student loan assistance, cultural historian position, resiliency position, and CIP funding.
  • Councilmember Galvan supported larger parts of McKee Rodriguez's proposal but expressed concerns about using Medicaid 1115 waiver reserves for reproductive justice, as it would reduce funding for oral health and other programs in future years. He opposed cutting UT San Antonio School of Public Health funding.
  • Councilmember Mesa Gonzalez supported revenue increases and many reductions in McKee Rodriguez's memo. She opposed using Ready to Work funds for budget balancing, noting voters approved it for workforce development. She supported library fee increase and asked about impact of proposed HOT tax changes.
  • Councilmember Alderete Gavito opposed all amendments adding spending, stating the need to reduce, not add. She supported attachment 4 and proposed increasing speeding ticket base fine from $100 to $200, maximizing cost recovery on vacant property fines, and extending IT equipment lifecycles. She opposed property tax increase.
  • Councilmember Mungia supported attachment 4, restorations in McKee Rodriguez's proposal, and reductions in public safety overtime. He warned that failing to pass the tax increase would disproportionately impact districts 1-5.
  • Councilmember Corr supported revenue items, Medicaid waiver for reproductive justice, CIP funding, and restoring SAEP scholarships (with city residency requirement) and the resiliency position. She did not support moving arts organizations' HOT funding.
  • Councilmember Via Gran encouraged unity and supported revenue items. He supported library fee increase and proposed using attachment 4 revenue for SAEP scholarships in FY27.

Key Outcomes

• Councilmembers generally supported the five revenue adjustments in attachment 4 (booting fees, vacant lot/dangerous premise abatement fees, parking fine increases, river barge ticket fee for non-residents, hazmat fee). These would generate $1.4 million annually ($2.8 million over two years).
• The city manager will provide an updated memo tonight reflecting today's discussion, setting the framework for continued amendment discussions on September 16.
• City staff will calculate the impact of reducing participation rates in TERS (inner city and midtown) to free up general fund dollars. The analysis will account for the council's previous direction on early termination of TERS.
• If the property tax increase fails to receive seven votes on September 17, the city manager will be authorized to make $75 million in additional cuts to balance the budget by September 27. He indicated he will share tomorrow a list of reductions he would not recommend (e.g., traffic markings, non-service alley maintenance, Park Steward program, VITA program).
• The 49 filled positions originally slated for elimination will all be placed in other positions within the city, with 24 remaining in the same job title and department, and 19 in lateral positions. No layoffs are occurring.
• Council will meet again on September 16 to narrow the amendment list, with budget adoption scheduled for September 17.
• City staff will provide a detailed breakdown of general fund growth from $1.36 billion (FY22) to $1.76 billion (FY27), indicating that 72% of the $400 million increase is attributable to public safety (police and fire).