KERRVILLE, Texas - A Kerrville city councilman accused his own city of "intentionally hiding" a growing budget deficit during a tense exchange at the City Council's July 24 budget workshop, drawing an immediate rebuttal from the city manager even as officials acknowledged that Kerrville is spending more than it takes in - and that the July flood has deepened the hole.

The clash, between Councilman Kent McKinney of Place 3 and City Manager Dalton Rice, laid bare a structural gap in the city's finances that has been building beneath two years of disaster recovery, and that now frames the question hanging over Kerrville's next budget: whether the city can keep paying for the services residents expect without cutting them, raising taxes again, or both.

Kerrville, he told colleagues, is "already underfunded" and "running deficits we're not showing because we're not being sustainable." He put the gap in blunt terms: the city needs roughly $2 million, he said, but has "800,000 or something booked.".