City budget proposes 3% COLA, merit program to continue and targeted 5% market boosts for public safety and public works

City staff presented a proposed fiscal 2026 budget that would include a 3% cost-of-living adjustment for all employees, continuation of a merit program and targeted market adjustments for some job classes. The proposal also includes a market adjustment of 5% targeted to public safety and public-works servicemen, producing a total budgeted salary cost increase that staff described as equivalent to 9.5% of total payroll.

Why it matters: Council members pressed staff for details because recurring payroll increases affect long-term fund balance and borrowing capacity. Staff said the 9.5% figure is a planning envelope that combines a 3% COLA for everyone, a merit pool paid by evaluation (historically about $320,000), and targeted market increases for job classes judged to be furthest behind comparables.

David (staff member presenting the budget) said the 3% COLA would cost roughly $468,000 and that the merit program last cycle cost about $320,000. He described the 9.5% as the budgeted envelope that gives administrators flexibility once exact merit distributions are determined.

Council members discussed mechanics: employees who meet expectations would receive a smaller portion of the merit allocation, while higher-rated employees could be placed at larger merit bands (1%–5% was the described range). Staff said merit awards are tied to annual evaluations and that newly hired employees are not eligible for merit increases until after their evaluation cycle; they would, however, receive any COLA and any market adjustment that changes the job’s pay range.

Public-safety recruitment and retention were a principal focus. A public-safety chief present at the meeting described regional competition and said pay is one of several factors influencing recruitment. Staff noted that a 5% market adjustment for public safety starting pay, combined with the COLA and an average merit, could bring starting salaries much closer to regional comparables and make Tomball more competitive with neighboring jurisdictions.

Council directed staff to preserve a modest budget cushion (staff estimated roughly $400,000 of additional room) and to return with details needed for the August public hearing and adoption schedule. No formal budget adoption or vote took place at the July 23 meeting.

The council will hold the first public hearing on the proposed budget August 4 and is scheduled to adopt on August 18; staff said any major alterations should be raised now so they can be reflected before the hearings.

Staff said the city will continue to review specific position-by-position market data and recommended targeted adjustments where comparables show large gaps, with particular emphasis on firefighter starting pay and select utility and maintenance job classes.