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Navasota council weighs TMRS changes, COLA and salary survey for FY2026
Summary
Council and staff discussed moving retirement from a 25‑year to a 20‑year TMRS plan, a possible increase in employer match, a recommended 2.5–3% COLA and a 2026 salary survey; staff noted tradeoffs with other budget priorities.
City staff and council discussed employee compensation, retirement and human‑resources tools during the May 13 budget workshop. The conversation focused on whether to change the Texas Municipal Retirement System (TMRS) parameters and on salary‑survey timing and cost‑of‑living adjustments.
Mr. Heminger explained how TMRS benefits are calculated and the practical effect of different formulas: "a 25 year retirement to a 25 year, a 25 year retirement will result in about double the monthly benefit to a retiree that a 20 year retirement had," he said while explaining the interaction of years of service, contributions and mortality tables. (Transcript: Mr. Heminger.)
Staff said the city currently uses a 25‑year retirement parameter and is considering whether to move to a 20‑year target and increase the employer match (discussion referenced going from the current 5% toward a 7% match). Staff noted those choices have budget consequences and will affect recruitment, retention and tradeoffs with other priorities.
On pay adjustments, staff suggested a 2.5%–3% cost‑of‑living adjustment (COLA) as consistent with recent Consumer Price Index measures, and reminded the council that the city completed a salary survey in 2022 and typically recommends a three‑ to four‑year cadence for a new survey. Staff also said they plan to implement or continue NeoGov software for applicant tracking and onboarding as part of HR modernization.
Why it matters: retirement and pay structure affect recruitment and retention, and any change to TMRS contributions or a system wide COLA will change the FY2026 budget baseline. Councilmembers asked staff to present specific dollar impacts and to weigh phased approaches (e.g., moving partway toward a higher match in Year 1 and continuing in later years) so council can prioritize other programs accordingly.
Staff will survey employees and return with financial scenarios showing tradeoffs so the council can decide whether to fully adopt a TMRS change, phase increases or allocate funds for broader salary adjustments.
