Navasota staff previews preliminary FY2025–26 budget, proposes 2.5% COLA and TMRS increase to 6%

City staff presented a preliminary FY2025–26 budget at a July 14 special meeting of the Navasota City Council, proposing a 2.5% cost-of-living adjustment for employees, raising the Texas Municipal Retirement System contribution from 5% to 6%, and keeping the tax rate and utility rates flat pending final revenue numbers. The staff presentation emphasized a balanced-budget approach and said the city will avoid issuing new debt this fiscal year unless the council directs otherwise.

The presentation explained the city lacks final revenue figures because the certified appraisal roll from the appraisal district is due in early August; staff said they expect to post the proposed budget the week of Aug. 4 and hold a second budget workshop on Aug. 11. The council will conduct a public hearing and adopt the budget on Sept. 8, then adopt the tax rate on Sept. 22 if the council maintains the current rate.

The staff presenter said the recommended personnel pay approach combines a 2.5% COLA with a new defined step pay plan and a compensation survey to set base salary grades. Under the proposal, employees’ year-end pay would be increased by 2.5% and then slotted into the nearest step on the new grid so that everyone receives at least the COLA and some employees may receive slightly more. The presentation said the salary survey will help set the starting point for the pay grid and make the plan competitive and affordable.

On retirement benefits, staff cited recent TMRS legislation that allows contribution rates up to 8% as of Sept. 1 and recommended a measured increase from 5% to 6% this budget year to remain competitive with other cities while taking “manageable bites” toward higher levels. The presenter told the council the administration had asked department leaders to solicit employee feedback on priorities and that responses favored a balanced approach between retirement improvements and immediate pay adjustments.

Staff proposed converting two part-time positions to full time: an assistant fire chief and a part-time library clerk, saying the assistant chief would improve span-of-control for the fire department and the library clerk conversion would free other staff to focus on programs. The presentation also proposed consolidating building, property and fleet maintenance into a single maintenance-services division to centralize work orders, improve procurement leverage and better manage a city-owned fleet.

Regarding fleet policy, staff recommended buying public safety vehicles outright rather than using the enterprise lease program and evaluating the enterprise program for public works vehicles on a year-by-year basis. Staff said the city will continue a multi‑year replacement plan rather than purchasing a large number of vehicles in a single year.

The presenter said the city will not add net new personnel except for the two requested conversions. Staff described a plan to move positions that are now paid 100% from utility enterprise funds to the general fund and then allocate rough percentages of time to each utility so costs better reflect employee work allocations.

The presenter emphasized the tentative nature of figures and the council’s central role in adoption: “we certainly want to have a balanced budget approach,” staff said, noting final decisions will follow receipt of the certified tax roll. Council members asked clarifying questions; staff confirmed the Aug. 4 posting and the Aug. 11 workshop dates and said the proposed budget will be before the council at the next meeting.

Less-critical line items the presenter flagged for the coming year include an AV upgrade for council chambers, a compensation survey and off-site cloud backups to support cybersecurity. Staff said health insurance plans will likely remain the same pending renewal rates in August. The next formal steps are the Aug. 4 posting of the proposed budget, the Aug. 11 departmental workshop, the Sept. 8 public hearing and the Sept. 22 tax-rate adoption.