City staff dedicate more than 3,000 hours across several months each year to ensure the budget is aligned with the City's mission and values. As a result, the 2026 Budget was adopted by City Council on Wednesday, Nov. 19, 2025. Read below about the structure and funds for the budget.
How is the City's Budget Structured?
As City stewards of taxpayer dollars, we share a commitment to using public funds with care and purpose. These dollars come from our residents, and they trust us to apply them where they make the greatest impact. Our budgeting process reflects that responsibility — focusing resources on the services and priorities that matter most to those we serve.
As a government, the City is required to budget and account for financial activity in Funds. Fund accounting emphasizes ensuring that revenues are used for what they are specifically intended for or legally restricted to.
General Fund: Supports most day-to-day operations. Funded primarily by the 2% sales tax. 2026 balance is $46.7M with a 25% minimum reserve. The General Fund reserve is like a savings account for the City and historically has been used for one-time funding of economic development and housing incentives. It can also be used to maintain operations when actual revenues are significantly less than expected/budgeted.
Enterprise Funds: Water, Sewer, Golf, Solid Waste & Recycling, Parking — funded by user fees, not taxes. Operate like a business where revenue from user fees have to cover operating expenses, any debt service, and saving for major capital projects.
Internal Service Funds: Fleet, Information Technology, Facilities, Communications/Dispatch — costs of these support operations are recovered internally by charging departments based on usage. This allows for money to be designated and available for planned replacement of critical equipment and systems such as police cars, backhoes, mowers, software, and computers.
How are Major Capital Projects Funded?
Major projects like the CRC are funded with bond proceeds, dedicated sales taxes, grants, impact fees, and partner contributions — not from the General Fund.
.75% of the City’s total tax rate goes to a major capital fund that pays for debt service on past projects, maintenance on the City’s current assets, some new projects, and economic development.
The City has invested in major capital improvements for the community over the last decade, including the transportation expansion projects, rebuilding the Police, Comm Center, and Fire Admin/Station #1, Las Colonias, the Convention Center etc. However, debt was used to fund those important projects sooner rather than later, and therefore, approximately one-third of the tax revenues each year are used to pay debt on these completed projects.
Why Have Health Insurance Costs Increased?
Nationwide increases in medical costs, pharmaceutical pricing, and City employee utilization have increased the cost of health insurance for the City and employees. City is reviewing plan design, wellness strategies, including continuing to expand and improve services at the employee clinic, and market options to slow future increases.
How Are Funding Priorities Determined?
Guided by Council’s Strategic Framework, community input, core service needs, and long-term sustainability. Core services are the “things” the City does for the community that no one else provides. Those core services are largely funded by sales tax.
City Sales Tax Total Rate 3.39%
- 2.0% to the General Fund
- .75% to the Capital Fund
- .50% to Police and Fire only
- .14% to the Community Recreation Center only
How Are Fleet & Equipment Purchases Determined?
Each year, replacement funds are limited to a certain amount. Therefore, replacement cycles, condition assessments, and Department needs are taken into consideration when the annual replacement list is prioritized. Staff is always watching for the opportunity to right-size to ensure safe, cost-effective vehicles and equipment as well.
Why Did the City Switch to Empower?
Empower was selected for better tools, lower fees, and stronger investment options.