Tucson council begins FY26 budget and pay-plan process, starts transit fare equity study and water-rate notice

Tucson City Council opened a long study session April 8 with an initial presentation of a recommended compensation plan that city staff said is intended to correct pay-range placement and add an annual pay-progression while introducing organization-wide performance reviews. City leaders also heard an updated look at the FY26 budget that reflected weaker sales-tax expectations and a larger projected starting deficit, and they directed staff to begin public outreach on several transit and revenue items.

The compensation plan presentation, led by the city manager and Human Resources Director Dr. Terry Train, outlined three linked elements: in-range pay placement for incumbents using a base-pay calculator and employee records in Workday; annual pay progression proposed at 1.5 percent; and market adjustments phased over three years for job classes judged below market (with police and fire receiving a specially negotiated schedule). Staff said the FY26 general-fund cost of the recommended package, including employee-related expenses, would be about $13.6 million (roughly $21 million citywide including non-general funds), with a multiyear funding profile that could total about $60 million over three years.

Why this matters: city managers argued the steps address long-standing compression where new hires sometimes earn more than incumbents and aim to modernize hiring offers, career-path documentation and performance management via Workday. Staff emphasized the effort is a multistage process: initial performance reviews and in-range placements this summer for roughly 896 incumbents, data clean-up through next spring, and ongoing annual maintenance.

Budget context — nut graf: city finance staff told the council the financial environment has shifted since earlier forecasts: recent sales-tax data reduced expected FY26 sales-tax revenue by about $14.1 million compared with prior planning and increased the initial FY26 operating gap to roughly $27–28 million. Staff presented a revised five-year…