Farmersville forecasts tighter fiscal outlook for FY ‘24-25

(Rigo Moran)

City prepares fiscally conservative draft budget for 2024-25, sows new dispensary development opportunities to increase general fund

FARMERSVILLE – Due to some declining revenues in the city’s general fund, the city of Farmersville is looking to pinch some pennies with a more fiscally conservative budget going into the 2024-25 fiscal year. Not only that, the city is also looking at some potential remedies to bring the numbers back up.

While the city will be continuing its existing services with the upcoming budget, it won’t be adding any new ones to its plate, said Farmersville City Manager Jennifer Gomez. She explained the city is looking at some changes, such as cost of living increases for staff as well as some standard operations increases; however, it will not be taking on any new projects that would withdraw from the general fund.

“We’re going to be looking at next year being conservative on how much revenue we think we’re going to get,” Gomez said.

Even though the city is going to budget with a more careful hand this time round, there are still a lot of unknowns in regard to how the city will approach their finances due to how early they are in developing the draft budget.

“The draft’s coming up in the next couple of meetings. We’ll get some feedback and direction from council,” Gomez said.

One direction that could potentially bring up the city’s general fund is increasing Farmersville’s cannabis permits, according to Gomez. If the city council decides to increase the number of permits they allow in the city from three to five, more dispensaries could open within the town limits.

Gomez noted that the town’s dispensaries still seem just as busy as usual and it doesn’t seem as though cannabis sales themselves have decreased. However, she pointed out that the wholesale cost of cannabis has lowered the overall prices, which in turn, has decreased the sales tax.

“I had talked to (our) dispensaries about their current business models because they still seem to be doing well. It’s just that their revenues themselves have dropped off because it’s costing less,” Gomez said. “They still have plenty of customers coming in, so I’m thinking it’s not an issue of the market being oversaturated, it’s more like statewide competition has brought the prices down.”

This means the addition of more dispensaries in town have potential to increase the general fund if it leads to an increase in cannabis purchases.

The biggest hit to Farmersville’s general fund last year came from a decline in the city’s Measure Q fund, otherwise known as the cannabis business tax, due to a decrease in cannabis sales. According to the Farmersville staff reports on the 2023-2024 draft budget, revenue from Measure Q declined for eight quarters in a row. Average loss is now reported at 6% per quarter.

At one point, cannabis sales used to be the main factor that was increasing Farmersville’s general fund.  Councilmember Greg Gomez noted in a previous article from The Sun-Gazette that cannabis sales from local dispensaries had increased the general fund within the last few years.

“Over the last 10 years cannabis certainly has increased the size of the general fund and the funding that we have available,” Councilmember Gomez said to The Sun-Gazette in May 2023.

However, it is still unclear how Farmersville City Council will approach the draft budget, or if they will even be interested in increasing the number of dispensaries in Farmersville.

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