The town only has 860 residents. I don't know how they afforded 5 police officers are all, much less how they can afford top expand. I used to live in a county (not city!) of 15,000 people, and the whole county got by on just two sheriffs - calling for help from other nearby cities (in a different county) when there was a big event. Edit: now that I think of it, there was budget for 3 sheriffs - but they only rarely managed to have all 3 positions filled at the same time.

I don't live in Texas, but my experience in Iowa and MN is that cities need about 10,000 people before having a separate police department is worth the bother. At 500 they pay the sheriff a little extra to run extra patrols down the streets to "provide a presence", but it isn't full time (other than possibly an incentive to have a sheriff live in the city so his car was visible in his driveway when he was off-duty.