In accordance with applicable statutes and the City Charter, the City Manager submitted a budget proposal to the City Council for consideration on August 11, 2025. The City Council will hold public hearings for the Proposed Budget on August 19, 2025 

Note: After the August 5, 2025 Council workshop, staff prepared some alternative options for the adopted budget that will be mentioned in the presentation.

A budget was put together that follows the 5 budget priorities set by council and staff including, in no specific order:

• Staff Compensation to reduce turnover and attract the best talent
• Street Maintenance & Repair to improve the safety of those that drive on our roads and to improve the general appearance of the City
• Capital Improvement Program to be transparent in City’s project schedule and to help anticipate future funding needs to maintain financial stability
• Increase Staffing Levels to provide the expected levels of service to residents and businesses while preventing burnout and turnover of existing employees
• New/Remodeled Facilities to plan for and provide space for the growing workforce and space for citizens to utilized for community and private events

City-wide the budget funds the Merit program for non-uniformed public safety personnel and the Step program for uniformed public safety. These programs move employees within their pay range but does not affect the starting wages of new employees. Non-uniformed employees will be eligible for a 0-4% increase based on performance and uniformed public safety employees could receive a 4% increase based on the tenure schedule. These changes are planned to take effect midyear and cost $784,000.

Staff also proposed a change in medical insurance provider along with a plan change that prevents any increase in premiums for 2026, allowing for additional expenditures to be placed on other funding requests. Street maintenance and improvements are scheduled and prioritized based on road conditions and the funding available. Large projects are identified individually due to the size and scope of the project and being more challenging to raise funding. Smaller maintenance type projects are grouped together for contract and funding purposes. Projects in this group fall into the Streets Preservation and Maintenance program or SPAM.

The General Fund has $650,000 budgeted for street maintenance and staff plans to utilize $53,889,496 of existing bond funds, SEDC contributions, and grants to complete the 2024 SPAM list of roads, Lookout Road reconstruction, Main Street improvements, Lower Seguin Road reconstruction, the 2025 SPAM projects, Kramer Farm Subdivision rehabilitation, and Boenig Drive rehabilitation. New street projects to start based on available funding include 2026 SPAM streets, Northcliffe’s Country Club Blvd, and Savannah Drive.

The Capital Improvements Plan (CIP) that includes Streets, Parks, Facilities, Water/Wastewater, and Drainage projects is updated and adopted by Council along with the budget. Streets, Parks, and Facilities are funded by property and sales taxes. Staff schedules and limits projects based on the assumption to fund only projects that attempts to minimize fluctuations in the tax rate. Water/Wastewater and Drainage projects and debt are funded by the Water, Sewer, and Drainage fees, respectively. These fees are reviewed and 5 year rate plans are adopted by Council in order to fund operations and the CIP projects. These rate plans are often updated annually in order to utilize the most accurate information and minimize rate increases. The full CIP can be found at the end of this budget document.

The City added 26 positions for FY 2025-26. These included 10 for the General Fund, 6 for the Water & Sewer Fund, 4 for the EMS Fund, and 6 for the Drainage Fund.

The General Fund added 6 Firefighters to complete the staffing at the upcoming Fire Station 4, an Assistant City Secretary to assist with the existing operations, a Senior Center Supervisor and Recreation Specialist with the transition of the Senior Center operations to the City, and an Athletics Coordinator with the transition of the Maske Road Soccer Complex operations to the City.

The Water & Sewer Fund added another crew which consists of 3 Worker I’s, a Worker II, and a Crew Leader. Also added was an additional Worker I that could act as a floater position to assist any crew that is short that day.

The EMS Fund added 4 EMT’s to operate the Medic 8 and Medic 9 ambulances during peak hours to ensure lower response times and additional public safety.

The Drainage Fund added another crew that includes 3 Worker I’s, a Worker II, and a Crew Leader to increase maintenance the levels of existing drainage ways to reduce the threat of flooding. Also added was a Floodplain Manager to help with mandated drainage reporting to state and federal agencies as well as manage the long term plans to increase the drainage system capacity in the City and reduce the risk of flooding and loss of life and property.

Challenges meeting these goals include the loss of property value in residential homesteads in Guadalupe County, funding not keeping pace with growth in service demand for the Schertz Emergency Medical Services (EMS), and a Drainage Fee that does not raise the amount of funds required to maintain the existing drainage channels and extend or create new channels necessary to protect the city.

The budget proposal looks to make up decrease in property values by delaying some capital replacement until FY 2026-27. These replacements that were delayed have all been reviewed and approved by Fleet as staff reviews the existing replacement timelines to be more efficient. The EMS Director has approached each of their contracted service areas and have negotiated additional funding to help make up the existing operating deficit. The Drainage Fee is proposed to increase to cover the additional personnel required to maintain the existing drainage system and plan for expansions.

Per state statutes and the City Charter, the city must adopt a budget prior to the beginning of the fiscal year beginning on October 1st.

This budget will provide for additional resources to areas identified by citizens, city council, and staff.

Staff recommends that the City Council approve the first reading of Ordinance No. 25-T-032, adopting the budget for the fiscal year beginning October 1, 2025, and ending September 30, 2026.

 

General Fund	$53,754,934
Tax I&S Fund	11,545,212
Water & Sewer Fund	36,695,153
Capital Recovery - Water	1,000
Capital Recovery - Sewer	14,353
Drainage Fund	2,818,831
EMS Fund	17,149,568
SEDC	16,701,463
Special Events Fund	55,000
PEG Fund	64,000
Hotel Occupancy Fund	170,322
Park Fund	100,000
Tree Mitigation	85,000
Roadway Impact Fee Area1	5,000
Roadway Impact Fee Area2	105,000
Roadway Impact Fee Area3	5,000
Roadway Impact Fee Area4	3,000
Library Fund	21,500
Historical Committee	14,250
Total:	$139,308,586

Staff recommends that the City Council approve the first reading of Ordinance No. 25-T-032, adopting the budget for the fiscal year beginning October 1, 2025 and ending September 30, 2026.