City Administration Urges Council Review of Compensation and Tax Rate Amid Revenue Changes

The Forney City Council meeting on August 19, 2025, focused on critical discussions regarding the city’s compensation policies and budgetary challenges in light of changing economic conditions. The meeting highlighted the need for a thorough review of salary adjustments and tax rates as inflation rates and revenue projections shift.

A key point raised during the meeting was the adjustment of merit raises and cost-of-living adjustments (COLA) for city employees. The proposed changes included a shift from a 3% cost of living adjustment to a 4% adjustment, alongside a potential 3% merit raise. This adjustment was deemed necessary due to previously high inflation rates, which have now decreased to below 3%. However, the city is facing projected declines in sales tax revenue by 2% in 2025 and a slowdown in property tax revenue growth.

The discussion emphasized the long-term budget implications of these changes, with an estimated $500,000 impact on the fiscal year 2026 budget due to the compounded effects of the adjustments. The speaker noted that while raising the tax rate could be a practical solution during periods of high inflation, adjusting salary growth downward poses a more significant challenge for city administration.

To assist the council in making informed decisions, a recommendation was made to compile detailed reports on merit raise utilization over the past five years, healthcare cost trends, and a comprehensive review of COLA policies. This data would provide insights into compensation trends and their fiscal sustainability, helping the council evaluate whether current compensation structures need adjustments in response to revenue trends and inflation rates.

The speaker urged that this information be prepared ahead of the council's upcoming meeting on August 26, allowing sufficient time for review and discussion. The outcome of these discussions will be crucial in shaping the city’s financial strategies moving forward.