SAN ANTONIO – The City of San Antonio is considering a $3.96 billion budget that, despite its record size, includes some attempts to back off spending.
The budget proposal for the upcoming 2025 fiscal year, which staff presented Thursday morning, is 5.8% larger than FY 2024′s $3.74 billion adopted budget and is broken into three parts:
- $1.67B - GENERAL FUND
- $860M - CAPITAL BUDGET
- $1.43B - RESTRICTED FUNDS
The city council is expected to pass a final version on Sept. 19, but here’s a quick look at what’s in this first draft of the city’s spending plan:
BELT-TIGHTENING
The city is looking at a larger budget deficit than it had expected this spring as some of its primary revenue streams return to what City Manager Erik Walsh said are “normal” pre-COVID levels.
At the most basic level, though, Walsh said expenses are growing faster than revenue.
City staff said in May they were expecting at least a $10.6 million deficit over two years. But then tax revenues began coming in lower than expected, and that anticipated gap grew to $68.2 million over three years.
To help bridge the divide, staff are proposing $36.6 million in cuts to the general fund over the next two years and Walsh said they still need to find another $8.2 million to cut in FY 2026. Cuts include:
- Moving $16.9 million in expenses such as sidewalks and shade structures out of the general fund into the capital budget and other funds across two years
- $2.3 million cut of development incentives in FY 2025
- Eliminating $2 million in general fund and fuel contingencies in both FY 2025 and FY 2026
- Removing three positions from boarding home inspection program
The city had projected a 4% increase in sales tax revenue for FY 2024, but it has ended up being closer to 1.4%. That has caused the city to lower its expectations for the next two years, at least.
Property tax revenue is also expected to go up by a “pre-COVID” amount in FY 2025. Walsh said the projected amounts of property tax revenue have continued to shrink as more people apply for homestead exemptions, over-65 exemptions, and appeal their valuations.
The city is only expecting $23.7 million more in property tax next year compared to the $51 million bump it received this year.
And unlike the past two years, there’s no big windfall from CPS Energy’s payment in lieu of taxes (PILOT). The city’s 14% share of the city-owned utility’s revenue is coming in roughly where it had expected.
Though Walsh said the actual PILOT collections are about $9 million lower than projected, the council had also developed a policy to set aside money above a certain threshold that it received from CPS Energy selling power to other utilities.
The city has about $20 million in that pot of money, which can also be used to make up for the PILOT shortfall and also help offset future rate increases.
FEE INCREASES
The city isn’t just cutting costs. It’s also looking to take in more money.
It plans to keep the property tax rate level at $0.54159 per $100 of valuation, but some fees could see a bump.
For the second year in a row, the city wants to raise fees for its medium and large trash carts. The proposed 50-cent increase is mostly to fund increased labor and equipment costs, though the city is also adding another illegal dumping crew to help clean up illegal dumping sites and homeless camps.
The city plans to review its solid waste rates every other year going forward.
The city also plans to increase the fee for unpermitted false alarms from $75 to $250, and from $125 to $250 for commercial alarms.
San Antonio police spend as much time responding to the 68,000 unpermitted false burglar alarms as 20 full time SAPD patrol officers, Walsh said. The 11,000 alarms to which firefighters respond, he said, is equivalent to four engine companies.
However, a city spokesman confirmed on Friday that the 68,000 and 11,000 figures also included false alarms from permitted systems.. It was not immediately clear what proportion was from just un-registered systems.
A third fee increase would come from raising the EMS transport fee from $1,000 to $1,500 over the next two years.
The cost of each transport is about $3,700, Walsh said, and most other major Texas cities charge between $1,400 and $1,500.
Most of the transport fees are covered by commercial insurance or Medicare, Walsh said, but the city also has a program for uninsured people that can waive the billing.
The alarm and transport fee increases are expected to bring in another $4.5 million in FY 2025.
The city will also raise the facility surcharge fee on every Alamodome event ticket by either $0.50 or $1 to offset the cost of police overtime for providing traffic control around the dome.
FIRE CONTRACT REMAINS SMOKY
The city is still negotiating a collective bargaining agreement with the San Antonio Professional Firefighters Association.
Wages remain the biggest issue, with the fire union asking for much steeper raises than what the city has offered. By the city’s estimates, the two sides’ proposals are roughly $70.4 million apart in cost over the course of a three-year deal and $12.3 million for FY 2025 alone.
The city has penciled in the costs of its own proposals, including a 7% raise for firefighters on Oct. 1, to calculate this first draft of the budget.
Given the tight financial picture, that means any movement toward the fire union’s proposals will come with a tangible trade-off in the budget.
“Part of the conversation with the council is if we’re going to continue making movement, we’re going to have to reduce elsewhere,” Walsh told reporters in an early briefing.
The city and SAPFFA negotiating teams are scheduled to sit down again on Aug. 23.
HOMELESS CAMP CLEANUPS CONTINUE
The city made homeless camp cleanups a priority in FY 2024, setting a goal of cleaning up 700 encampments within 14 days.
The city expects to hit 1,100 camp cleanups with an 18-day average response time.
And instead of the 400 people the city hoped to get off the streets and into some kind of shelter or housing, it will end up sheltering 530.
For FY 2025, the city is setting a goal of sheltering 500 people and cleaning up 1,300 homeless camps within 14 days.
The city also plans to have 11,238 affordable housing units built, under construction, or in the pipeline by the end of FY 2025 - 40% of the city’s Strategic Housing Implementation Plan’s goal.
ACS’ BOWL FILLED AGAIN
Animal Care Services, which still doesn’t have a permanent director, has been under increasing scrutiny since a deadly dog attack of an elderly man in early 2023.
However, some of that extra attention has also meant council members have been willing to invest more in ACS, which got a record budget increase in FY 2024.
Part of that bump was to hire more people to handle more critical calls, such as neglect or cruelty. The department was only responding to about 46% of critical calls by the end of FY 2023.
The department is now up to 64% response rate, and the city budget includes 14 new positions to get to 86% by the end of FY 2025. The city hopes to reach 100% by early 2026.
The city council already approved the creation of two new spay and neuter clinics on the East and West Sides in June, and the FY 2025 proposed budget includes money to staff them.
OTHER HIGHLIGHTS
- 65 more police officers as part of the city’s five-year goal to add 360 patrol officers
- 15 new firefighters to address medical calls at the three busiest fire stations (4, 19, 44)
- Speeding up and expanding plans for ground transportation center at San Antonio International Airport. Council already approved a 500-space garage, but Walsh said they need “three times the amount of parking.”
- 3% pay raise for civilian employees and 4% for police under their union contract
- $122 million for 1,618 street maintenance projects, compared to $116 million in FY 2024
- $3.5 million for more bike facilities, bike master plan to be presented to council in January 2025
- Funding for 455 minor home repairs and 52 major home repairs
- Federal pandemic relief money will continue to fund extended, 7 a.m.-7 p.m. senior center hours
- 1 new code enforcement position for short-term rental enforcement
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You can learn more about the proposed budget:
NOTE - Some numbers in the story have been corrected or clarified, based on a misreading of the presentation and individual line items.