Mount Pleasant staff briefed the City Council on the proposed 2025–26 budget during a workshop Tuesday, focusing on reserve levels, utilities planning, compensation recommendations and the proposed property tax rate.

City staff said the proposed budget includes a 3% market adjustment for employees and step increases for employees below step 10 contingent on satisfactory performance evaluations. The staff presenter described the compensation approach as a market adjustment rather than a cost-of-living increase and cautioned that a flat payment (for example, $1,000 to all employees) would “disrupt the continuity” of the adopted step-and-range pay plan.

Staff reported that the general fund for fiscal 2025–26 is proposed at roughly $15.08 million (down slightly from the prior year figure cited in the presentation), while the utilities fund is proposed at about $19.1 million, compared with a current budget around $18.8 million. Staff said utilities are projected to end the fiscal year with an estimated surplus (presenter noted an approximately $1.2 million surplus figure for utilities that would increase reserves to roughly $4.3 million by year end) and recommended deferring a planned additional 5% utility-rate increase because the fund is returning toward industry-standard reserve levels.

Staff outlined capital projects and maintenance priorities included in the proposed budget: a ladder truck on order (delivery expected 2027), fire station roof work, a training facility for fire, street rehabilitation ($1 million budgeted this year of a larger $2 million allocation), Delwood Park improvements with design work complete, airport matching funds to pursue a grant, and sewer reroute work near a John Deere facility to prevent erosion-related failure of a sewer main. The staff presenter also recommended completing a water master plan to coordinate growth and connections with Tri Sud (referred to in the presentation as Tri Sud/Pilgrims) and to clarify long-term utilities needs.

On taxes, staff indicated the current tax rate was 0.340414 and presented a proposed rate of 0.415929 (an increase of about 0.0755). Staff said the increase is largely tied to debt-service needs from borrowing and that even with the proposed rate the city’s tax rate would remain near the lower end compared with peer cities cited in the presentation. Councilmembers expressed concern about raising taxes while revenues such as sales tax, landfill fees and water sales have been variable or declining; several councilmembers said they want greater public engagement and to point residents to the public hearings before adoption.

Staff reminded the council that the proposed budget must be posted by Friday and outlined the public schedule: staff said the budget will be posted (the presentation included a note that the proposed budget would be posted Aug. 13), the first public hearing is scheduled for Sept. 2 and a second hearing with possible adoption of budget and tax rate is scheduled for Sept. 16 (the presenter also referenced a separate earlier note that a public hearing or first reading would occur Sept. 7; staff later reiterated the Sept. 2 and Sept. 16 dates during the discussion). Staff also said a compensation study is expected to be completed by March or April of next year; that study will show which positions are under- or over-market and inform targeted adjustments.

On longevity pay, staff reported the current longevity benefit is $10 per month per year of service (with state law allowing a cap at 25 years). Budget figures presented: the $10-per-month longevity line equals roughly $197,000 citywide; lowering longevity to $7 per month would reduce the citywide cost to about $138,000 and $5 per month to about $98,000. Staff noted a council resolution adopted the prior year had set a longevity range between $5 and $10 per month.

No formal council vote on the budget or compensation package occurred at the workshop. Staff said it would post the proposed budget and return for public hearings; councilmembers gave direction to continue public outreach and to debate details at the scheduled hearings. The presenter recommended the 3% market adjustment and step increases be included in the proposed budget as staff’s recommendation, but emphasized the council will make the final decisions at formal hearings and adoption votes.

Quotes drawn directly from the workshop: the staff presenter said, “The proposed budget does include a 3% market adjustment,” and later warned that giving a flat payment to all employees would “disrupt the continuity” of the step-and-range pay plan. A councilmember asked for the exact tax numbers and staff replied, “The current tax rate is 0.340414, and the proposed rate is 0.415929.”

Next steps: staff will post the proposed budget for public review, complete additional cost and peer comparisons requested by councilmembers, and present the budget and tax-rate proposal for public hearings on the schedule provided. Councilmembers encouraged residents to attend or comment during the public hearings.

(Discussion occurred in workshop format; staff recommendations were presented but not adopted during this meeting.)