Council adopted the Budget for FY 2026-27 with ordinance 26-T-026. This budget approves a certain amount of expenditures from October 1, 2026 through September 30, 2027. This time period the approved budget is in effect is called a fiscal year (FY). Staff must stay under the approved total during the fiscal year, but can return to City Council to request amendments to increase or decrease the approved budget. Due to council's request, staff plans to bring budget adjustments before council quarterly when necessary.

Due to delays caused by production timing or unforeseen events, some planned expenditures don't occur during the fiscal year. For the first amendment of the fiscal year, the majority of budget adjustments for consideration are for items approved for the previous fiscal year, but were unable to be expended due to delays. Staff requests amendments to the budget, so these items do not use up the current year budget amounts meant for expenditures related to the current fiscal year.

These budgeted amounts that were not used increase the Fund Balance above the amount listed in the financial forecast. By authorizing these expenditures with a budget amendment, Council will not be lowering Fund Balance below what was presented during the FY 2026-27 Budget adoption process.

Another reason to amend the budget would be for unknown or unexpected costs that were not considered during the budget, such as Weir Road repairs.

Proposed Amendments General Fund:

• Increase Transfer Out by $160,000.00 for the engineering services for Weir Road repairs. This item was not included in the proposed FY 2026-27 Budget. However, these repairs need to move forward. Funding for this amendment is proposed to come from Fund Balance.
• Increase Fire Department's Communication Equipment Budget by $54,533.00. This adjustment is for radio replacements which were ordered but not delivered by the end of the previous fiscal year.
• Increase the Streets Sidewalk Maintenance Budget by $79,278.00. These are for approved sidewalk concrete work that will be completed in FY 2026-27 and approved for FY 2025-26.
• Increase Transfer Out by $811,680.00 to complete approved street maintenance projects included the Study on Borgfeld midblook crossing, improvements to the crosswalks at Savannah and Homestead, the Pecan Signalization Project and the 2026 SPAM Projects approved in FY 2025-26.
• Increase the IT Computer Budget by $185,000.00 to complete the MDT removal and replacement project for Public Safety computers approved in FY 2025-26.
• Increase the IT Equipment Budget by $45,000.00 to complete the Library Public Address (PA) System purchase and installation approved in FY 2025-26.
• Increase Transfer Out by $225,000.00 for the Library Retention Walls Project Funding which should begin in FY 2026-27 due to design delays.

Proposed Amendments Water & Sewer Fund

• Increase Equipment by $105,000.00 to complete the purchase of the approved dump truck authorized in the FY 2025-26 budget.

Proposed Amendments Drainage Fund

• Increase Drainage Channel Maintenance by $200,000.00 to complete the Friesenhan Lift Station project and brush removal along areas of Palm Park by Cibolo Creek and the Railroad right-of-way along the northern part of FM 78, approved by council on 10/20/2026 by resolution 26-R-122. These items were budget in FY 2025-26.

Proposed Amendments to the Public, Education, and Government Fund (PEG)

• Increase this budget by $45,000.00 for fiber internet improvements at the Parks Building. This item was not previously approved and is proposed as an amendment due to need.

Proposed Amendments to the Schertz Economic Development Corporation:

• Decrease this budget by $235,000.00. The proposed FY 2026-27 budget included funds for the purchase of land behind the Northcliffe Community Center. After review, it is not feasible to move forward with that purchase at this time. Staff is requesting it be removed from the budget for this reason.

Proposed Amendments to the EMS Fund:

• Increase this budget by $232,438.00 for the completion of an ambulance remount approved in the previous fiscal year. Due to long delays by the vendor, the remount was not able to occur in FY 2025-26.

Proposed Amendments to the Capital Imporvements Plan (CIP) Budget

• Increase the FY 2026-27 Budget for Street Preservation and Maintenance (SPAM) by $1,220,000.00 for a total of $2,020,000.00. The funding is from the approved $10,000,000.00 of General Fund Fund Balance contributions already approved so no additional funding will need to be authorized. Staff wants to move faster on the approved SPAM projects and complete construction in FY 2026-27 on select roads instead of only working on design.
• Staff is also proposing adjustments to the FY 2030-31 column and the Old Weiderstein project and the Lower Seguin Road East of FM 78 pushing expenditures out by 1 year. These projects clarified funding timing in the out years for information purposes only and will not affect the current approved budget. These projections will continue to be adjusted each annual budget cycle. The Streets Summary and Old Weiderstein project pages will be updated in the CIP Budget.

To continue approved operating expenditures remaining from FY 2025-26.

The community would benefit from continued sidewalk and road maintenance, as well as improved public safety with the replaced radios and computer equipment.

Staff recommends approval of Ordinance 26-T-037.

This amendment would increase the General Fund Budget by $1,560,491.00, the Water & Sewer Fund Budget by $105,000.00, the Drainage Fund Budget by $200,000.00, the PEG Fund Budget by $45,000.00, the EMS Fund Budget by $232,438.00, increase the CIP Budget by $1,220,000.00, and decrease the SEDC Budget by $235,000.00 for a total increase in the Citywide approved budget of $3,127,929.00.

Of that amount, $1,702,929.00 was previously approved in the prior fiscal year and was accounted for in the 5-year forecast. By reauthorizing this funding, there will be no impact to the 5 year forecast shown to council during the budget process.

The $160,000.00 for Weir Road would decrease the fund balance by $160,000.00 below what was previously authorized. The General Fund Fund balance's lowest point in the forecast was $19,303,332, or 31.6% of annual operating expenses. This amendment would decrease the fund balance to $19,143,332, or 31.4% of annual operating expenses. The target fund balance is 26% of operating expenses and which the projected is still above. 

The $45,000.00 for the PEG Fund for fiber improvements to the Park Building would decrease its fund balance from $233,311.00 to $188,311.00. This is a special revenue fund that does not have annual operating expenses.

All other funds' 5 year forecasts would not change with this amendment.

The CIP Budget changes will allow for SPAM construction spending in FY 2026-27 but will not need additional funding. All other changes were for information purposes only and do not affect the 10 year projection.

Staff recommends approval of Ordinance 26-T-037