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Council told city can fund emergency water and sewer work from reserves; TMRS COLA and ambulance coalition costs flagged
Summary
City finance staff reported approximately $12 million in unrestricted funds and said using reserves can fund ground storage and the urgent sewer rehab without issuing debt while maintaining a six‑month operating reserve. Staff also warned the council about an imminent TMRS COLA decision and potential ambulance coalition cost increases.
Finance staff told the council the city held roughly $12 million in unrestricted funds and intends to maintain a six‑month reserve (quoted at about $4 million). Staff said using reserves will be the preferred funding source for near‑term projects discussed in the work session — notably the recommended 1.5 million‑gallon ground storage (estimated at $4 million) and the Milton Street sewer rehab (budgeted $700,000, with value‑engineered cost estimates discussed).
TMRS and pensions: Staff and council discussed the Texas Municipal Retirement System (TMRS) cost‑of‑living adjustment (COLA). Finance staff said adding COLA while it is legally available this year would avoid a substantially higher retroactive cost later. Staff explained COLA adjusts retiree benefits for inflation using a CPI‑based index and said the city must act this year if it wants to adopt a non‑retroactive COLA option; otherwise the option would require retroactive changes (and be more expensive).
Ambulance coalition costs: Staff said ambulance‑service coalition changes are a moving target; two member jurisdictions (Anna and Princeton were mentioned) are altering participation and Princeton is reportedly exploring a separate arrangement. Staff estimated a potential budget impact in the six‑figure range (staff cited an estimated increase around $100,000 as a working figure) and said final numbers were expected later in the week. Staff recommended preserving funding flexibility this year while staff studies coalition alternatives with neighboring cities.
Funding approach and constraints: Finance staff reiterated the city’s commitment to keep six months of reserves and said planned projects could be paid from reserves without dropping below the target if council agrees to proceed. Staff noted that further budget decisions will be presented in follow‑up agenda items.
