The Amarillo City Council held a special meeting Friday morning to continue discussions on the city’s proposed budget for the 2025-2026 fiscal year. The session followed a series of budget workshops conducted from Tuesday through Thursday last week. Officials determined that an additional meeting was necessary to address ongoing concerns about rising costs and the need to balance the city’s proposed expenditures with available revenue.
During the previous workshops, council members and city staff focused on identifying funding strategies to maintain key services, including public safety, infrastructure maintenance, and employee compensation. One solution under consideration was a proposed property tax rate increase from 38 cents to 43 cents, aimed at generating additional revenue for the city.
Following public comments, Councilmember Place 4 Les Simpson addressed concerns regarding the city’s financial standing. Simpson reassured residents that the city was not experiencing a revenue shortfall, emphasizing that there was no missing or lost money. Instead, he explained that the city faces a gap between the pace of rising expenses and the revenue projected for the upcoming fiscal year.
Mayor Cole Stanley echoed this point, clarifying that while the city does not have a shortfall, department requests exceed what the city anticipates collecting in revenue.
Chief Financial Officer Laura Storrs provided further context during the meeting. She reported that the city’s fiscal year 2024-2025 budget included a revenue increase of nearly $20 million compared to the previous year. These funds were allocated across both one-time and ongoing expenses. For the 2025-2026 budget, Storrs noted, projected revenue growth is $9.17 million over last year’s budget.
The increased funds would allow the city to support certain ongoing expenditures, such as cost-of-living adjustments (COLAs) and merit raises for civilian employees, pay increases for public safety personnel, and the implementation of a recent pay study designed to make starting salaries for city employees more competitive. The city also aimed to raise the COLA for retirees from the Texas Municipal Retirement System (TMRS) and provide additional funding to support public safety officers.
Despite these increases, the proposed budget does not generate enough revenue to cover all priorities. As a result, city staff initially proposed implementing a street maintenance fee to bridge the funding gap. At the direction of the council, Storrs presented scenarios outlining what could be funded with the full fee, half of the fee, a quarter of the fee, or without it.
Councilmember Place 1 Tim Reid suggested postponing the street maintenance fee, arguing that implementing it immediately would be premature without a clear plan or structure. He recommended waiting until after the budget is finalized and then seeking taxpayer input before considering the fee.
The council generally agreed with this approach, directing staff to develop the budget without the fee and to revisit the possibility of introducing it later. Councilmember Place 2 Don Tipps noted that postponing the fee would allow any future request to be more effectively received by residents.
Removing the proposed $15 million street maintenance fee affects how much the city can allocate to departmental requests and employee compensation. Under the revised budget, certain measures could still be implemented, such as increasing the percentage of the COLA for TMRS retirees.
TMRS calculates the COLA annually based on changes in the consumer price index (CPI). Cities can choose to pay retirees 30%, 50%, or 70% of the CPI increase. Last year, Amarillo raised the COLA from 30% to 50%. For the upcoming fiscal year, city staff recommended increasing it to 70%, noting that this would be the final year the city could opt for the higher percentage.
Other planned employee compensation adjustments were scaled back in the revised budget. Merit raises and COLAs for civilian employees decreased from a proposed 4% to 2%, while raises for Amarillo Police Department officers fell from a proposed 5% to 3%, and for firefighters from 4% to 2%. Additionally, proposed changes to the city’s information technology infrastructure were reduced by $1 million, and several projects were eliminated, including the expansion of the “My Amarillo” 311 service, overtime budgets for police and fire departments, and capital improvement projects for the municipal court.
The revised budget also limits new employee hiring. Of the 44 positions requested across departments, only 16 new hires can be funded under the budget without the street maintenance fee.
Councilmember Place 3 David Prescott requested further scrutiny of the budget to identify potential savings that could be used to restore some employee raises, implement parts of the pay study for high-priority positions, and support programs for senior citizens. Storrs indicated that staff had already conducted a thorough review but would attempt to examine the budget again, though no additional savings were guaranteed.
Prescott emphasized the importance of investing in city employees, highlighting that without adequate compensation and staffing, city infrastructure and services could not function effectively.
Mayor Stanley added that the city would also review outstanding capital improvement projects, particularly those already budgeted but not yet underway. Some projects depend on the completion of other initiatives, so halting or reprioritizing certain projects could free funding to support staff compensation or other urgent needs. Special Advisor Floyd Hartman noted that some projects may need to be deferred until they are ready for construction, ensuring efficient use of city resources.
Simpson reflected on the council’s approach, stating that while the city would like to do more for employees and other initiatives, it must operate within budgetary constraints. He emphasized that minimizing disruptions to services remained a priority as the council continued deliberations.
The Amarillo City Council plans to meet again with city staff to review findings from the additional budget review, either before or during the next regular council meeting scheduled for Tuesday, August 26. The outcome of these discussions will determine the final structure of the 2025-2026 budget and guide decisions on employee raises, departmental funding, and potential future fees.
City officials are balancing the competing needs of residents, employees, and public services against a backdrop of rising costs. While the city is not facing a revenue shortfall, the growth in expenses has forced council members to make difficult decisions about which initiatives to fund immediately and which may need to wait until additional resources or public approval become available.
By prioritizing retiree COLA adjustments, certain raises for public safety personnel, and the essential services that affect day-to-day city operations, the council is attempting to maintain stability and service quality while avoiding sudden increases in fees or taxes without community input. Officials acknowledged that residents may have concerns about limited raises for civilian employees and the postponement of infrastructure investments, but emphasized that careful planning and phased implementation will help mitigate long-term financial strain.
As the budget process moves forward, city staff will continue to analyze revenue projections, departmental needs, and the potential impact of deferred projects. The council’s goal is to finalize a budget that addresses the most urgent priorities while remaining fiscally responsible and responsive to Amarillo’s residents. This iterative process highlights the ongoing challenge of municipal budgeting: balancing limited financial resources against a growing array of public service needs and employee compensation expectations.
Ultimately, Amarillo’s budget discussions reflect a common challenge in city governance. While the city has seen revenue increases in recent years, escalating costs across departments, infrastructure demands, and employee pay pressures require careful consideration. The council’s decision to temporarily defer the street maintenance fee and scrutinize existing budget allocations represents an effort to ensure that taxpayer funds are spent efficiently and equitably.
Residents can expect continued updates as the council and staff refine the budget and present recommendations for final approval. The next council meeting will provide an opportunity for both officials and the public to review the proposed plan and assess whether it meets the city’s priorities for the upcoming fiscal year. Until then, city officials remain focused on ensuring that essential services are maintained, employees are fairly compensated, and infrastructure projects are carefully managed within the framework of available resources.
