The City of Gladewater’s going back to square one on the budget with less than a month until Fiscal Year 2027.
It’s a hard turn that follows on the heels of heated exchanges last week between the mayor and city treasurer.
Almost a month passed between council members’ first budget workshop July 30 and the second on Aug. 25. A bit more than a week since, the third dive into the numbers for Fiscal Year 2026-2027 begins at 6 p.m. Thursday evening.
Questions about the city’s three-month reserve quickly boiled over into frustration last week. At the time, it wasn’t clear how much the past year’s projects, repairs and purchases had eaten into the balance – without the requisite council approvals.
“At no point should anybody have been in the reserve fund dipping it down like that and letting it go anywhere below three months without this council being made aware of it beforehand,” Mayor Brandy Flanagan-Shipp said. “This is not OK.”
Where did it go?
“A lot of the expenses that occurred over the past year were things getting fixed and being proactive,” Gladewater Treasurer Meghan Davis said. “It’s not just one specific department.”
At one point, it appeared more than half the three-month emergency fund had been depleted along with excess funds. Following Tuesday’s meeting, updated numbers put it at about 94 percent of the target.
“Any money that’s been spent has been spent on years of neglected infrastructure,” Gladewater City Manager Charlie Smith said later. “What I want to see is Gladewater not taking a step backwards from where we’re at, because if you’re not making progress, you’re losing ground.”
Department heads are watching their pennies, he told the council, but the city’s employees are also tasked with keeping Gladewater on solid footing.
“Some of the excessive spending, probably, that’s because of me telling them to fix these things.”
The progress is evident, councilmember Kevin Clark said.
“We’ve seen the productivity from the staff. We’ve seen roads paved. We’ve seen new things that we’ve not done in years,” he agreed. That said, maintaining a reserve is a priority.
“The numbers that we’re seeing right now aren’t matching the expectations,” Clark added later. “In trying to do our due diligence in not putting an undue burden on our constituents, we are halting the process to determine what we can do to be responsible to the community.”
Per a General Fund Policy adopted in July 2025, the city keeps three months of operational expenses in-hand to cover revenue shortfalls, unanticipated expenditures and continuing operations during economic downturns, natural disasters and similar emergencies.
Considering a variety of factors, the number shifts every year.
From the latest figures, the relevant expenses for Fiscal Year 2025-2026 total $11,618,926. Divided by 12, that’s $968,244 per month, putting the current reserves level at slightly more than $2.9 million.
The treasurer’s post-workshop update puts the total balances of all liquid accounts (as of July 31) at $2,748,621.32 which is $156,110 short of the three-month reserve policy.
Notably, the city is currently owed $234,239 in a lift station reimbursement from Texas Department of Transportation as well as $473,508 for generators (tied to Snowmageddon funds).
“Once we receive those reimbursements, we will be in compliance with the fund policy,” Davis reported.
It’s a total that needs to be presented to council members regularly, the mayor said, without delay: “I don’t know how many times I have asked for this number and would never be given it.”
The exchange on the reserves and unflagged expenditures took up a significant portion of the meeting, delaying discussion of the developing budget and leaving most of the department heads and city employees in the room without an opportunity to weigh in.
With the clock ticking on budget season (Fiscal Year 2027 begins Oct. 1) the council and city staffers will now start fresh with a needs-based budget.
“The very first budget we were given was a wish list,” Clark said that night. “It was not a budget, it was a wish list. We don’t have any money to fund any part of that,” and he’s concerned about increasing taxes after other large expenditures.
“I’m not saying we don’t need a fire truck, but how are we buying a million dollar fire truck and we’re into our reserves?”
The council closed the Aug. 25 session with a record vote on a proposed tax rate for FY2027. At 0.63758 per $100 valuation, it’s a 14.5 percent increase, the highest rate the city can adopt without going to the voters.
Despite a unanimous decision, the number had the elected officials on edge, and they’re exploring ways to both dial that number back and to avoid any increase to water rates.
“Could you please give us a budget with absolutely none of the wish list items and everything,” councilman Milton Anderson asked, “only what we physically need to operate.”
The forthcoming budget will focus on operational expenses first; other expenditures can be added upon consideration. Also on the night’s agenda is an executive (closed) session consultation with the city attorney on the ad valorem tax rate and related budget and financial matters as well as two personnel items, considering the city treasurer and city manager.
“We’ve got to do this all over,” Mayor Pro Tem Sonny Anderson said Aug. 27. “We’ve got to have a clear financial report. That’s what we haven’t had; this is what we’re looking for now.”
In addition to cutting expenses, council members briefly discussed revenue options beyond property taxes, sales tax, grants, reimbursements and other sources.
What about Gladewater Economic Development Corporation funds? Milton Anderson asked.
Raised from a half-cent sales tax, those funds are restricted by law to GEDCO’s purposes, helping fueling local commerce.
“We don’t need to do that,” Flanagan-Shipp replied, but some monies could be utilized to help defray some project costs in specific circumstances.
Likewise for Hotel Occupancy Tax funds: currently, all those monies go to Gladewater Chamber of Commerce and are restricted by law to tourism, promotion, historic preservation and a few other uses.
Overall, “I do not want operations suffering, but we cannot in good conscience sit here and go up on tax rates and go up on water rates at this point with what’s been presented to us,” the mayor said.
According to the updated numbers, Smith said, “We’re good on the fund balance. I think as far as the budget goes, it’s like I said before that it was going to be a tough budget. It’s going to depend on what the council decides on the tax rate. I just want the city to continue to grow and repairs be made.”
Toward the end of the meeting, council member André Clay had one final question for Davis: “What do you need? I never did hear anybody address that.”
Per the city treasurer, “I need to be able to do more focusing on this and the financials and the day-to-day instead of doing more data entry,” in addition to HR, payroll and troubleshooting around City Hall. “What I’m asking for is another person. When I ask for another position, it is to delegate more.”