In plain language: here is the question the whole page has been building toward. Take the town’s own recurring money — property tax, sales tax, the industrial in-lieu, franchise and fees, everything Deer Park raises and controls ($67,050,425source addedderived — Council on Local Relations in FY2025). Now line up what the town must pay every year just to stand still: run its services ($54,728,487derived — Council on Local Relations), make its contracted debt payments ($9,065,044FY2025 ACFR PDF p.62 / printed p.57), and maintain the infrastructure it already owns ($7,700,822/yrNote 3, depreciation by function (printed p.50 / PDF p.56) of annual wear). Add those up and own recurring revenue falls about −$4,443,928source addedderived — Council on Local Relations short — it does not cover the recurring bill. The only thing that closes the gap in FY2025 is $6,763,998FY2025 ACFR PDF p.118-119 / printed p.111-112 of investment earnings — and that is the whole point. Investment earnings are the one line here that isn’t steady: they rise and fall with markets and interest rates, and this year’s figure is a high one. Count them and the town clears the bar by a thin $2,320,070derived — Council on Local Relations. But one ordinary bad market year shrinks that line toward zero — and when it does, the −$4,443,928source addedderived — Council on Local Relations gap doesn’t appear, it was simply always there, hidden. It becomes visible, and unfunded. The town is covering a structural shortfall with its most volatile dollar.

What is that volatile dollar, exactly? The $6,763,998FY2025 ACFR PDF p.118-119 / printed p.111-112 is the return on the City’s $126,100,764PDF p.50 / printed p.45 investment portfolio — about $82,346,796PDF p.50 / printed p.45 of it in AAAmFY2025 ACFR Note 3, Credit risk (PDF p.51 / printed p.46) money-market pools (TexPool, Texas CLASS, TexSTAR) plus short certificates of deposit and Treasuries, at a 0.31 years (~4 months)PDF p.50 / printed p.45 weighted-average maturity. It is a safe portfolio — the risk isn’t that it loses money. Here is the mechanism that makes the earnings fragile: a 0.31 years (~4 months)PDF p.50 / printed p.45 average maturity means the whole portfolio turns over and reprices to whatever rates are current about three times a year. So this income is not locked in — it essentially is the current short-term interest rate, on a lag of only a few months. When rates rise it swells; when they fall it evaporates on that same short lag. That is why the very same line was $9,626,172FY2025 ACFR PDF p.119 / printed p.112 in FY2024 and only $390,025FY2025 ACFR PDF p.119 / printed p.112 in FY2022 — a ~25-fold swing in three years, driven by rates, not by anything the City did. Closing a recurring gap with that dollar is like paying a fixed mortgage out of a bonus that is large some years and near zero others — and the bonus resets to today’s rate three times a year. And to head off the obvious suspicion: this is not an arbitrage play — the City is not borrowing cheap to invest high for a spread. The money sits in conservative, AAAmFY2025 ACFR Note 3, Credit risk (PDF p.51 / printed p.46)-rated government pools at a 0.31 years (~4 months)PDF p.50 / printed p.45 maturity; the $6,763,998FY2025 ACFR PDF p.118-119 / printed p.111-112 is a rate windfall, not a strategy.

One caution against double-counting: do not confuse this budget gap with the -$21.5M/yr†correctedderived — scripts/m28_rederive.py land figure near the top of the page. That one is a per-acre model of which land pays for the services it uses (answered by the refineries’ in-lieu payment and sales tax). This is the actual budget — whether the town’s steady yearly revenue covers its steady yearly bills (answered, for now, by volatile investment income). Different questions, different fixes; not the same hole counted twice.

State it as arithmetic, because that is all it is: in FY2025, Deer Park’s own steady revenue did not cover the cost of running the town, paying its existing debt, and maintaining what it already built — the difference was made up by volatile investment income, outside grants, and new borrowing. That is the same mechanism as the cushion chart at the top of this page: when the recurring math doesn’t close, capital gets borrowed and the spendable position falls. This is not a claim about anyone’s intentions or competence — it is what the numbers add to. There is real good news in the signed column (the in-lieu ladder rises for a decade), and a soft forecast could be drawn either way.

Here is the sentence to carry out of this whole section. The dollar that closes Deer Park’s FY2025 gap — $6,763,998FY2025 ACFR PDF p.118-119 / printed p.111-112 of investment earnings — was $390,025FY2025 ACFR PDF p.119 / printed p.112 just three years earlier. The town is solvent this year because interest rates happened to be high in the right year — and that is not the same thing as being solvent. Its steady money does not reach its steady bill; the difference is covered by a return that rides the rate cycle. Deer Park is one rate cycle away from a visible crisis — not a prediction, an arithmetic fact about how the gap is currently filled. What to do about it — raise revenue, cut cost, or stop adding obligations — is the council’s to decide and TAAL’s to press; this page only shows that the gap is real, and how fragile the thing covering it is. dp.cover.* (coverage arithmetic, FY2025 ACFR) · margins: dp.cover.margin.noinvest / .withinvest · swing: dp.invest.earnings.fy2024 vs .fy2022