Payson Council adopts FY 2025-26 budget, approves employee pay plan with COLA and merit split

Payson City Council on Aug. 6 adopted its Fiscal Year 2025-26 budget, approved enterprise fund transfers and set compensation guidance for executive municipal officers and staff pay cycles. Finance director Kathy reviewed changes to the tentative budget, including a $400,000 allocation for fire station design, added debt service for the fire station, several rolled-over capital projects, and targeted additions such as a $33,000 storm-drain rate study and $115,000 for an economic development study for a sports complex. Staff presented the consolidated budget figures: an approximately $124,000,000 total across all funds; a $9,600,000 water fund; a $22,000,000 electric fund; a $1,500,000 ambulance fund; and a $33,000,000 general fund, with an estimated use of fund reserves of $3,200,000 for the year. Council opened and closed a public hearing on enterprise fund transfers and then voted to approve those transfers. The council also held the statutorily required public hearing on executive compensation under Senate Bill 91, during which Melanie explained the SB 91 requirement and the administration's proposal. After debate about optics and budget constraints, the council twice voted on compensation options. An initial motion to adopt a 2.5% COLA plus 3% merit failed. A subsequent motion to apply a 2% cost-of-living adjustment and up to 3% merit for executive municipal officers carried 4-1 (Councilmembers Hyatt, Moss, Rowley and Hulett voted yes; Councilmember Christensen voted no). The council then approved the FY25-26 budget on a 4-1 vote with the same dissenting member; the final motion included direction allowing staff and department heads to accelerate pay adjustments for police and other public-safety employees to remain competitive. Councilmembers and public commenters discussed the balance between raising taxes, using reserves, and cutting spending. Resident Chris Kilmer urged tighter spending controls and said the city's revenue growth could have been used to reduce property taxes; others, including business owner Scott Phillips and resident Doris Adams, supported targeted investments in public safety while urging fiscal caution. Kathy and department directors explained a range of adjustments included in the adopted budget: rolling over and funding storm-drain and Box Culvert projects (grant-funded at $990,000), updating revolving loan amortizations, adding a full-time parts position for vehicle maintenance, funding a sewer belt rate betterment design ($90,000 split between sewer and water), and adding a police fingerprint machine ($7,500). The budget also included funding for water lead and copper lateral replacements, continued sewer plant construction and a lift station to service the pit commercial property. The adopted budget gives staff authority to amend line items in order to accelerate certain public-safety pay adjustments and to reallocate project funding where necessary; councilmembers asked staff to continue looking for cost savings across departments and to prioritize recruitment and retention for critical positions. Enterprise fund transfers, the executive compensation package (2% COLA, up to 3% merit), and the FY25-26 budget ordinance were each approved by the council at the meeting. The redevelopment agency budget was also presented and approved during the session.