By Karen Gleason
The 830 Times
City council members are continuing the work of grappling with the proposed city budget
for next year, delving into the nuts-and-bolts of the document with key staff members
during a special meeting on Saturday.
The council met for several hours to review portions of the proposed Fiscal Year 2025-
2026 budget as presented by City Manager Shawna Burkhart, Interim Finance Director
Linda Coones, Assistant Finance Director Roxy Soto and City Budget Analyst Flavio
Aguilar.
and city department heads about the city’s proposed Fiscal Year 2025-2026 budget
during a special city council meeting on Saturday.. (Photo by Karen Gleason)
Most of the city’s department heads also attended the budget work session, and the first
order of business for the finance department staff was handing out copies of the 3½-inch-
thick budget document to most of those attending the meeting.
Burkhart opened the meeting, welcoming the council, directors and other staff. “There is hopefully nothing that we have left out that you won’t have a detail on,
especially when it comes to capital requests. All of that is in this book, and it’s probably
more information than anyone ever wanted, but we certainly want to provide full
transparency as we move forward,” Burkhart said.
Aguilar then stepped to the podium to shepherd the presentation, first thanking staff for
helping prepare the budget books.
Aguilar began on the book’s first page, going over highlights of the proposed Fiscal Year
2025-2026 budget, which were presented as a list of bullet points.
Those highlights included a note that the city’s estimated year-end fund balance is based
on projections of keeping a “fund balance policy” of five months in reserve, but also
included a three-month reserve for comparison purposes.
Aguilar said the proposed budget includes new forms “for transparency and clear and
precise understanding of what each division or department is requesting to operate.”
He noted in the coming year, the city’s neighborhood services department will be split
into two divisions: code enforcement and health, and the budgets of the water,
wastewater and gas departments will be split into two sections, operations and
administration, “to be able to capture what true operational costs are.”
Other highlights of the proposed budget include a one-time employee stipend of $1,200
and the creation of a new position, that of fixed asset/capital improvement plan clerk and
the hiring of a chief accountant, a position that had been frozen.
After reviewing the highlights, Aguilar addressed “budget concerns.”
Among those concerns, Aguilar told the council, were whether or not to keep the general
fund balance as a five-month or a three-month reserve, internal service funds that have
negative fund balances, no cost-of-living adjustments (COLA) or merit increases for
employees for two years, a move toward charging city employees $19 per paycheck for
their heath insurance coverage and raising the individual deductible on that coverage to
$1,000.
Coones told the council, “What’s not included in this budget is debt service, and the
reason why is we are waiting to hear from the Texas Water Development Board to get us
amortization for the new debt that has been approved, so when we get that, we will be
submitting to you all the debt service schedule.”
Aguilar reviewed the proposed city organizational chart for next year, and council
members asked several questions.
Aguilar walked the council through the fund balance in the city’s general fund. On a chart
showing figures from Fiscal Year 2023-2024 and 2024-2025 and projected totals for
2025-2026, the numbers show that fund balance decreasing.
In Fiscal Year 2023-2024, the city started the year with a beginning general fund balance
of $17. 4 million, the following year, Fiscal Year 2024-2025, the beginning fund balance
was $16.5 million, and in the proposed budget for Fiscal Year 2025-2026, the city is
projected to begin the year with $13.9 million as its beginning general fund balance.
Aguilar explained the city has two options regarding reserve fund balance. The first is
keeping five months of operating costs in reserve, and the second option is keep a three-
month reserve. Staff is recommending keeping a three-month reserve.
Aguilar noted the city is projecting general fund revenues of about $27.3 million and
expenditures of about $34.4 million in the year ahead.
Burkhart addressed the issue head-on in speaking to the council.
She said, “Please note that this is not a sustainable budget for the following year because
you will not have those reserves to pull from, so in essence, we’re $4.5 million annually
over budget.”
Aguilar then went over various departmental funds within the general fund, beginning
with the transportation fund.
Mayor Pro-tem Jim DeReus asked Aguilar some questions about transfers into the
transportation fund, which was already balanced before the transfer.
Aguilar said the “transfers” referenced are actually excesses in the fund balances in those
departments that are rolled over from one year to the next.
“This is a workshop, and these are all projected numbers, so if our projections are either
high or low, we can look at that and make the final transfer. . .” Coones said.
Aguilar walked council members through each of the funds in turn, including
transportation, nutrition, room tax, law enforcement training, economic development
corporation, Paul Poag Theatre, gas department, debt service, international airport, refuse
and recycling and municipal facilities.
After Aguilar went over the health claims fund, Burkhart told the council the city will be
going to a higher deductible on its health care insurance, up to $1,000 from $500, and
that employees will be asked to pay for 5 percent of the cost of the care, an amount equal
to about $19 per paycheck.
“This is not the preferred route, but we collected $5 million in revenue this year, and we
are anticipate having to pay out in claims $4.99 million, and so we are approximately 17
percent behind the curve, is what TML (Texas Municipal League) is telling us. We are
anticipating having to change the deductible and change the cost share, from 100 percent
and employees paying zero to (employees paying) 5 percent,” Burkhart said.
Aguilar then moved on to proposed budgets for each of the city’s departments.
The documentation began with tax collections, and Aguilar noted the projected figures
include a two-cent increase in the city’s annual property tax rate that will be
recommended in the new budget.
City administrators occasionally made additional comments about individual funds, and
council members asked occasional questions.
For example, Mayor Al Arreola asked questions about the renewal of grant funding for
the crime victims’ advocate position in the police department, and Del Rio Police
Department Capt. Robert Guzman answered the mayor’s questions.
After a 10-minutes recess, Aguilar reviewed capital assets and “additional requests.”
The additional requests are asks from department heads for equipment or services they
believe necessary to operate their departments at 100 percent performance.
During a series of questions by Councilman Jesus Lopez Jr., who wanted to know
whether or not there was enough money in the proposed budget to fund the departments’
additional requests, Burkhart again cautioned, “If you’re asking for an opinion, we do not
have enough to sustain a $4.5 million deficit this year, coming out of reserves and then
rolling the same type deficit into next year. So the answer would be no.”
Coones followed up: “Typically in a budget when cities have shortfalls they have to look
at these things, they have to look at travel and education, they have to look at capital
assets because the decision has to be made, is it really needed? And if it’s not really
needed to sustain that department for that fiscal year, council can cut it. It’s up to the
council as to how they want to maintain the fund balance they are envisioning.”
City Public Works Director Greg Velazquez told the council the city’s department heads
“went through a tedious job” to ask for and provide documented justification for the
requested additional items so each department could operate at 100 percent.
“Some of these line items you see here are integral for day-to-day operations,” Velazquez
said.
Later in the discussion, in answering a question from DeReus, Aguilar said the total
amount of the additional requests that had not yet been placed into the budget was
$493,200.
Of the list of additional requests, Arreola said, “I don’t see luxuries, I see needs.”
Before adjourning for the morning, the council and staff spent some time discussing
additional requests from the city’s transportation department for the transportation depot
downtown, including furniture for its dispatch office and landscaping.
The writer can be reached at delriomagnoliafan@gmail.com .
