Bulverde staff present balanced general-fund outlook and propose 3% COLA with 2% merit pool

At a city council budget workshop, staff reported that the city’s general fund is on a positive trajectory, projecting a roughly $500,000 favorable balance for the current fiscal year and a FY27 projected surplus of about $581,000.

The city manager (Speaker 1) outlined the review format and emphasized that the session’s focus was the general fund. He said the six-month revenue collection stood at roughly 61.6% and that ad valorem collections were close to the mid-90s percentile as measured at the March 31 reporting date. “Our revenue projections show revenues in excess of expenses at the end of next year, $581,000,” he said.

Finance staff presented consolidated cash balances (about $12 million) and healthy fund balances; the finance director (Speaker 2) described the general fund as “very healthy at 14.9 months,” noting that year‑to‑date revenue and expenditures were tracking differently across lines and that sales tax was slightly below budget year to date.

Council members pressed staff about compensation strategy. The city manager proposed a compensation package for FY27 that pairs a 3% cost-of-living adjustment with a 2% merit pool; staff estimated the direct fiscal impact of COLA and merit at roughly $154,000 overall. The manager said merit increases would be tied to performance evaluations and therefore would not be uniformly applied. Council members debated whether a larger merit component would better reward top performers but were urged to weigh long-term staffing costs against the city’s revenue outlook.

Staff also flagged near-term budget risks: rising health‑insurance claims and prescription costs that could push medical costs significantly higher in coming years, flat sales-tax growth that may rebound after completion of Highway 46 work, and potential state-level legislation that could limit municipal revenue options. The finance director told the council that medical claims and pharmacy trends were driving projected increases in group‑health costs and that staff would return with updated insurance numbers once carrier quotes were finalized.

The meeting packet, including department supplements, will be posted to the city’s website and staff committed to follow up on council questions before the next budget meeting.