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Commission debate centers on $20 million COLA, pension funding and staffing increases
Summary
Commissioners clashed over a $20 million cost-of-living adjustment (COLA), its effect on the city's pension funding and recent additions to staffing levels; staff said pension funding ratio fell from roughly 75% to 74.5% under current assumptions.
A heated exchange at Coral Gables' July 2 budget workshop focused on the fiscal trade-offs of a previously approved roughly $20 million COLA and a recent round of staffing increases.
Commissioners and staff agreed the COLA is part of a collective bargaining outcome and cannot be reversed by the commission. Finance staff explained the city budget includes negotiated raises and that changes in the extra pension payment planned for FY26 reduce the additional payment this year compared with the prior year. Staff reported the pension plan's funded ratio is projected to fall to about 74.5% from about 75% under the current schedule and that, relative to last year's extra payment of about $9.5 million, the FY26 extra payment is budgeted near $7.6 million.
During the discussion commissioners pressed for exact debt figures and for clarity on how COLA and additional positions affect the city's long-term obligations. Staff summarized the city's outstanding principal and interest schedule and said the present principal stands near $99.5 million, with total debt obligations including interest around $132.8 million. Commissioners emphasized the long-term nature of pension and debt obligations and requested caution when approving recurring expenditures that increase personnel costs.
The commission also reviewed proposed personnel changes in the FY26 estimate. Staff said the FY26 budget includes seven proposed full-time positions and three part-time positions across departments (including IT, grants, planning, and public works), and that a previously approved resolution the day before added 20 positions in the building department funded from restricted permit revenues; staff told the commission those 20 positions are funded from restricted enterprise funds rather than the general fund.
Commissioners asked for and received more detail on the pension actuarial timeline: staff said that without the additional extra payments the unfunded liability would be paid off later, and that restoring the extra payment to prior-year levels would shorten the payoff horizon by about two years. Staff framed the difference in those actuarial scenarios as material to the city's long-term debt capacity and ability to fund capital projects.
No commissioner motion to change existing COLA agreements or staffing approvals was adopted at the hearing; commissioners tasked staff to provide further financial scenarios and options for possible cuts before September hearings.
