Story By: BetterSeguin.org
The Seguin City Council adopted the City’s FY2027 budget Tuesday night without requesting changes to the spending plan presented by city staff.
The budget, which takes effect October 1, funds everything from police and fire protection to streets, parks, water and wastewater infrastructure. But one of the most important issues in the new spending plan is the City’s growing debt burden — and how much of the infrastructure associated with Seguin’s rapid growth is ultimately being paid by existing taxpayers and utility customers.
Council gave final consideration to the General Fund, Utility Fund, Special Revenue Fund and Debt Service Fund budgets on September 15.
More Than $41 Million in Debt-Service Funds
Seguin maintains separate debt-service funds for tax-supported obligations and Utility Fund obligations.
For FY2027, the General Interest & Sinking Fund is budgeted at approximately $13.56 million, while the Utility Interest & Sinking Fund is budgeted at approximately $27.99 million.
Together, those funds total about $41.55 million.
The City also uses several other revenue sources to help make debt payments and reduce the amount that must be supported through property taxes.
About $2.5 million in roadway impact fees, approximately $888,000 in stormwater revenues, and $200,000 in golf revenues are being applied toward debt-related obligations.
That $200,000 from golf revenues has a specific purpose. In 2024, the City moved forward with the renovation of the Max Starcke Park Golf Course. The project was originally estimated at approximately $8.8 million, with roughly $8.1 million expected to be financed after applying ARPA funds.
The FY2027 contribution from golf revenues helps offset debt service associated with that renovation, reducing the amount that otherwise would have to come from property-tax-supported revenues.
Utility Debt Has Become a Much Larger Part of the Picture
The Utility Interest & Sinking Fund is now substantially larger than the General Fund debt-service account.
Seguin’s audited financial statements show just how dramatically the City’s business-type debt has grown.
At the end of FY2022, Seguin reported approximately $78.45 million in business-type bonded debt.
By September 30, 2025, that number had climbed to approximately $504.31 million.
That is an increase of roughly 543% in three years.
Not all of that debt is water and wastewater debt. Seguin’s Utility Fund also includes electric operations. However, records obtained by Better Seguin show that a very large share of the recent Utility Fund capital program has been directed toward water and wastewater infrastructure.
The City’s 2024 Utility Fund project ledger includes approximately $77 million in clearly identifiable water and wastewater projects, compared with only about $695,000 in an explicitly identified electric outage-management project.
The 2025 Utility Fund ledger shows the same pattern, with major spending planned for the Walnut Branch lift station and force main, Geronimo Creek interceptor, Caterpillar lift station, water transmission projects, water-treatment improvements and utility relocations.
Growth Is Driving Major Infrastructure Needs
Seguin’s growth creates legitimate needs for additional road capacity, water supply, wastewater treatment, lift stations, transmission mains and drainage improvements.
The question is not whether those improvements are needed.
The question is who should pay for the portion of those improvements required by new development.
Seguin already assesses roadway, water and wastewater impact fees on new development. The City describes those fees as one-time charges based on growth assumptions and the capital improvements necessary to support that growth.
Texas law likewise allows impact fees to recover eligible capital costs attributable to new development, subject to statutory calculations, credits and maximum-fee requirements.
That makes the approximately $2.5 million in roadway impact fees being used for FY2027 debt service an important part of the budget.
But it also raises a larger question:
Are Seguin’s current impact fees and developer contributions keeping pace with the actual cost of growth-related infrastructure?
Existing Customers Are Also Paying Through Utility Rates
Impact fees are only part of the financing picture.
A large portion of Seguin’s water and wastewater infrastructure is financed through the Utility Fund. Those debt payments are ultimately supported by utility-system revenues.
Residents do not see a line on their water bill labeled “bond debt.” Instead, rates are structured to generate enough revenue to cover operating costs, capital expenditures and debt-service requirements.
Seguin’s own capital planning documents show the relationship. The City’s five-year Utility Fund forecast includes both projected impact-fee revenue and debt-service requirements when calculating available revenue and debt-service coverage.
That means existing ratepayers and new development are both contributing to the system — but not necessarily in the same proportions.
The Issue Going Forward
There is nothing unusual about a growing city borrowing money for long-lived infrastructure. Roads, water mains, wastewater plants and lift stations can serve residents for decades, and financing those projects over time can spread the cost across generations of users.
But Seguin’s recent borrowing has occurred at a rapid pace.
As the City continues issuing debt for projects associated with population and development growth, residents should be able to see clearly:
how much of each major project is needed because of new development, how much developers contribute directly, how much is recovered through impact fees, and how much is ultimately paid through property taxes and utility rates.
That is the part of Seguin’s debt story Better Seguin will continue examining.
Growth brings new homes, businesses and tax base. It also brings infrastructure costs. The key public-policy question is how those costs are divided between new development and the residents who are already here.