Fulshear EDC board warned of $1.0M revenue drop as ASA and FY27 budget discussions begin

City staff told the EDCA board on May 11 that a recent local sales‑tax reallocation will reduce the corporation’s sales‑tax share and create a sizable revenue shortfall for fiscal year 2027.

“Reflecting an anticipated 10% increase in total city collections, but an overall decrease of $1,035,000 from the fiscal year 26 budget,” staff said in presenting the FY27 budget parameters and the draft Administrative Services Agreement (ASA). Staff also reported that the EDC’s anticipated collections for FY27 are $1,265,000 under the new allocation.

Why it matters: board members said the change is the most significant budget shift they have faced in recent years and urged early conversations with city council and staff so the EDCA can fully consider options before the council confirmation window in July and August. “I don’t want us to wait too late to start having very serious conversations,” the chair said.

Staff asked the board to identify funding priorities at the May meeting so those requests can be incorporated into preliminary draft budgets and the ASA materials scheduled for June. The ASA redline in the packet contained only minor edits, staff said, but the board emphasized a need for clarity on what the ASA reimbursement line covers and how shared‑services costs are allocated.

Council engagement: with council member Utakar in the room, several board members pressed for a mechanism to discuss ASA changes and priorities without creating a quorum of either body. Utakar and others recommended quarterly liaison meetings or convening a council liaison with a couple of EDCA members to align views earlier in the process.

Staff follow‑up: staff agreed to send the board the shared‑services documentation and to produce three‑year sales‑tax revenue projections showing the effect of different funding choices on the EDC fund balance. Staff warned that funding multiple large CIP projects immediately would draw on fund balance and lengthen the time to recover under the reduced collections.

Next steps: preliminary draft budgets and the ASA draft will return to the board in June; board members asked that projected numbers and the staff’s recommended funding scenarios be presented with timing and multi‑year impacts so the EDCA can give timely direction to city council.