10 August 20 - 26, 2026 dallasobserver.com DALLAS OBSERVER Classified | MusiC | dish | Culture | unfair Park | Contents approval and was designed to lower tax burdens for residents. In reality, though, Texas cities have been hamstrung by the law, even as state legislators have pushed to lower the cap even further. In 2025, the Texas Senate considered a bill that would make the revenue increase cap only 1%. In April, Houston officials announced that they were anticipating a record-break- ing $174 million deficit in the next year’s budget. Austin city manager T.C. Broadnax has proposed raising property taxes by the highest-allowed rate to fill a $26.4 million gap. Fort Worth’s budget for the next fiscal year is nearly $80 million short. By 2027, San Antonio’s shortfall is estimated to top $158 million. “There will have to be some significant belt-tightening [across Texas],” John Dia- mond, senior director of the Center for Pub- lic Finance at the Baker Institute for Public Policy at Rice University, told the Texas Tri- bune last year. Some cities carry debt; others promote raises for employees or billion-dollar con- struction projects that may be a boon in the future, but require major investments now. In Dallas’ case, it’s all of the above. In California, Sacramento and San Fran- cisco both worked to close budget deficits this year. ($66.2 million and $200 million deficits, respectively.) Officials pointed to the end of COVID-era federal aid as part of the reason for the belt-tightening. During the pandemic, cities found themselves flush with cash. In Dallas, the money was used to purchase properties and expand city depart- ments. Now that the well has run dry, though, many cities are realizing that deci- sions made with that money, such as ex- panded hiring, carry a cost. “A lot of [the budget issues] basically break down to labor costs, particularly health care and pension costs for various city workers, which have been rising a lot faster than inflation and also faster than the revenue of these cities to keep up,” Derek Stimel, an economics professor at UC Davis, told ABC10 in California. In the draft of the fiscal year 2026-2027 budget that Dallas officials were briefed on last week, city employees would no longer have access to a copay healthcare plan. Tol- bert said the decision has been a long time coming because of the unsustainable rise in insurance costs for employees. The plan would also end coverage for GLP-1 usage prescribed solely for weight loss. In Denver, a projected $200 million shortfall this year led the city to lay off 200 employees. The city’s budget strife has largely been driven by many of the same fac- tors plaguing its peer cities, plus two 20-year contracts that guarantee annual 3% pay- ment increases to two neighboring commu- nities’ fire departments. The contract does not have inflation triggers or review periods built in; “the ink is dry,” said Denver Fire Chief Desmond Fulton. Guaranteed public safety investments are also a consideration in Dallas’ budget. Thanks to voter-approved Proposition U, the city is now obligated to meet a certain threshold of police and fire pension pay- ments. The mandate also outlines goals for police hiring, entry-level salaries and new revenue investment. Although the city says it is not required to meet those benchmarks because it has already cleared the pension obligations, a majority of this year’s budget growth will go toward public safety anyway because officials say they heard from voters that it is the top priority. The proposed budget for FY26-27 tops $5.66 billion, the largest in Dallas’ history. The Dallas City Council will consider the proposed financial plan over the next month and will have the chance to make amend- ments, strike line items, or save programs at risk of being defunded. A final budget will be approved by the end of September and will take effect on Oct. 1. ▼ PARKS BOATLOAD OF DISAGREEMENT WHITE ROCK BOATHOUSE OPERATOR REJECTS BREACH NOTICE, WON’T CHANGE CODE OF CONDUCT. BY AUSTIN WOOD A fter the city of Dallas issued a breach-of-contract notice, White Rock Boathouse Inc. will not change its code of conduct, according to a response letter obtained by the Observer. Sent to city attorneys on Aug. 5, the five- page letter comes with 31 pages of appendices and exhibits. The operator of White Rock Boathouse, the Filter Building and Boomerang Boathouse has rejected the notice and is demanding that the city retract it immediately. If not, “WRB intends to vigorously defend its rights and pursue all available remedies at law or in equity,” the letter states. WRBI is currently locked in a separate lawsuit with the city over the renewal of its lease for the Boomerang. Lawyers for the operator cite the breach notice in an up- dated filing in a Dallas County district court, arguing that the city is seeking to “manufac- ture defaults and create pretextual grounds for termination of the agreement(s).” A spokesperson for the city of Dallas de- clined to comment on the response, citing ongoing litigation. The breach-of-contract notice and the existing lawsuit are part of a wider, years- long dispute over city oversight and accessibility at the boathouse, which sits on public land on the southwest shore of White Rock Lake. WRBI has characterized the dispute as a “takeover attempt” by a rival rowing organization, while critics say the organization has failed to maintain transparency and public access at the boathouse, with WRBI’s code of conduct often cited as a leading example. The code has previously been used to deny storage access to coaches and residents affiliated with Dallas United Crew, denials that WRBI Board Chair Sue Ellen Chambers says resulted from disingenuous attempts to cast the nonprofit in a negative light. In a letter to the City Council, Dallas Park and Recreation Director John Jenkins said the department had not approved the most recent version of the code, as mandated by the contract. He also cited a section barring residents from membership at the facility if they have affiliation with other rowing orga- nizations as violating the contract’s public access clause. The operator was given 30 days to remove the code from its website and submit an updated version to the city, which, according to WRBI’s response, it has no intention of doing. WRBI’s response letter argues that de- partment leadership approved the code of conduct in 2022 and 2023, and that the 2025 version remains effectively unchanged from those years in its conflict-of-interest clause. The city’s next steps remain unclear. In a text, Chambers said the nonprofit is confi- dent the court will find the city’s position baseless. The City of Dallas reviewed and ap- proved White Rock Boathouse’s Code of Conduct in 2023,” Chambers wrote. “What has changed is pressure from competitive organizations that have the ear of the Parks board and City Council. The 20-year public-private partnership between the city of Dallas and White Rock Boathouse has created opportunities and access for thousands of Dallas residents of all ages and abilities.” Fenceposts in front of White Rock Boathouse. Austin Wood I thought we were special? from p8
