Council staff warn budget hinges on tax rate, health and retirement costs
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Summary
City staff told the council that key variables — the property tax rate, medical premiums and TMRS retirement contributions — could shift the proposed budget by several hundred thousand dollars, and that health-insurance bids will open Aug. 1.
City staff told the council during a work session that the draft budget is still subject to major variables, including the final property tax rate, rising health-insurance costs and projected changes to retirement contributions. “We open bids on August 1,” a staff member said, referring to requests for proposals for health insurance. The staff presentation quantified preliminary increases staff used in the model: a $262,500 cost for the proposed cost-of-living adjustment (COLA), about $282,000 estimated for TMRS retirement changes and roughly $255,000 for medical-insurance premium increases, figures staff called subject to change.
Those three items, staff said, together add “a little over a third of a million” dollars to personnel-related spending projections and are mutable depending on final contract rates, bid results and the council’s policy choices. The staff member warned the council that these projections are a best estimate: “If we hit these numbers exactly, then there’s something else that’s weird. We’ll be close. We’ll be in the ballpark, but we won’t hit these numbers exactly.”
Staff also noted some budget lines remain conditional. The tax rate has not been finalized and therefore revenue estimates may shift; staff said they already have assessed property values but not the final tax rate. The city’s health-insurance procurement timeline was identified as a near-term decision point: bids will be opened Aug. 1 and staff expect to review options afterward.
The discussion included process context: staff described the proposed budget as intentionally conservative in some areas and said the council previously directed a less aggressive revenue estimate approach to preserve end-of-year fund balances. No formal action or vote was taken at the session; the item was a workshop review and discussion only.
Looking ahead, staff said they will return with updated numbers after the health-insurance bids and when the tax-rate decision is known. The council did not adopt any changes at the session and the draft remains subject to further revision.