Stafford will spend $4.6 million more than it takes in next fiscal year after the City Council adopted a $36 million budget Wednesday, Sept. 30.

The vote at a special meeting at City Hall, presided over by Mayor Ken Mathew, locks in a General Fund spending plan that projects $31.4 million in revenue against $33.9 million in operating expenses and $2.1 million in transfers out. The gap will be covered by drawing $4,581,829 from the city's fund balance, according to the budget agenda packet.

That draw-down will leave Stafford's projected ending fund balance at $7,546,604, down from $12.1 million at the start of the year. It also pushes the city $1,140,390 below the three-month operating reserve required by its own financial management policy.

Chief Financial Officer Alka Shah flagged the structural risk in a Sept. 18 budget memo to the mayor and council. Shah wrote that future budgets must move away from relying on the fund balance to cover recurring and capital costs, calling the spending plan a sign of long-term structural challenges.

Stafford levies no city property tax. Sales tax is the city's largest revenue source, projected at $21.9 million for the new fiscal year, a 2% increase over the prior adopted budget.

The budget includes a 3% cost-of-living raise for all city employees and the release of one previously frozen Police Department position. It also funds salary adjustments for positions paid more than 10% below market, and increased health insurance, and property and liability insurance costs. Capital and one-time spending totals $1,254,600, funded through the General Fund's non-operating account.

Other revenue lines include a $730,000 Meadows Fire Call Reimbursement. The budget also includes a $270,000 Hotel Occupancy Tax transfer supporting Civic Center operations and community events, and a $221,875 transfer from the Stafford Economic Development Corporation (SEDC) to cover the Economic Development Director's salary.

The council also considered the SEDC and Stafford Centre budgets for FY 2026-2027 at the same meeting. The City of Stafford confirmed on X on Friday, Oct. 2, that all three adopted budgets are now posted on the city's website.

The budget process began in June with multiple workshops. At a Monday, Aug. 31 session, resident Cliff Cowperthwait raised concerns about repairs needed at the Civic Center, Stafford Pool and City Hall lobby, as well as replacement of the Public Works garage. Resident AJ Honore suggested the city establish a stormwater utility assessment fee, noting the city's reliance on sales tax revenue.

Meeting minutes from the Sept. 30 vote have not yet been posted, so the individual vote tally is not confirmed. The new fiscal year began Oct. 1, and the adopted budget documents are available at staffordtx.gov.