Cookeville adopts $260.9 million FY2026 budget, raises property tax to 99 cents

Cookeville — The Cookeville City Council on Thursday adopted a $260,915,532 fiscal year 2026 budget and approved a 7-cent property tax increase, raising the city rate from 92¢ to 99¢ per $100 of assessed value.

City finance staff said the 7¢ increase is expected to generate about $862,000 in additional revenue. City staff explained that 5¢ of the increase is allocated to the general fund, 1.5¢ to the debt service fund and 0.5¢ to the solid waste fund; the overall proposed city tax rate of 99¢ is projected to produce about $12.2 million in property tax revenue.

Why it matters: Council and staff said the budget focuses on employee pay adjustments, capital projects and infrastructure while preserving city services. The package includes targeted market and merit pay adjustments for city employees, capital investments across departments, and bond-funded projects the city says are intended to support continued economic growth.

Most important details - The ordinance adopting the FY2026 citywide budget (ordinance O25 0 6 0 9) appropriates $260,915,532 in expenditures and transfers. City staff recommended approval and the council voted 5-0 to adopt it. - The general fund budgets $40,495,415 in revenues and transfers in, $46,189,957 in appropriations, and a reduction in fund balance of $5,694,000. Projected general fund balance at June 30, 2026, is just over $33 million. - Employee pay: the budget includes a $2,000 market adjustment for all full‑time employees and merit increases up to 2% (not to exceed range maximums). Staff said those two items cost approximately $991,000 in the general fund and about $1.2 million citywide when benefits are included. - Public safety and staffing: the city budgets seven new full‑time positions (net gain of five after eliminations/ consolidations) and a significant increase to paramedic pay (budgeted to rise from $4,680 to $7,800, described in the presentation as about a 67% increase). - Capital and debt: the general government capital program totals roughly $41.1 million (excluding utilities). The city plans two bond issues, budgeting $10 million this fall and another $10 million next year to fund projects including Tenth Street phases, West Stevens Street, CPAC renovations and fire station rebuilds. Staff said the city retains what they described as substantial debt capacity under conservative assumptions.

Supporting details City staff walked the council through fund-by-fund projections, noting the city remains heavily reliant on local option sales tax (about 50% of general fund revenue) and is budgeting modest sales tax growth (2%). Other revenue highlights described in the presentation included in-lieu payments from utilities and the hospital, wholesale beer and liquor taxes, and a one-time LPRF grant for Camp Creek Park.

On expenditures, staff said 77% of operating costs are salaries and benefits; police and fire represent about 52% of operating spending. The budget also includes funding for continued infrastructure (paving, sidewalks, stormwater), downtown development contingencies and park projects funded with hotel‑motel tax receipts.

Public comment and council discussion Several residents raised questions during public hearings about whether the tax increase would be passed on to renters, protections against displacement, and whether the budget includes targeted affordable‑housing investments. Council members and staff responded that the city does not have a dedicated housing department, that the city supports Highlands Residential Services (the local housing authority) and that some ARPA funds previously were used to support housing projects. Staff committed to follow‑up where citizens requested more detail.

Council members repeatedly framed the budget as an investment in the city’s infrastructure and workforce. During the debate, a council member summarized that the adopted package was the result of detailed departmental review and conservative financial planning.

Ending The council approved the budget and the related property tax ordinance on first reading and adopted the FY2026 budget on the evening's vote, 5-0. Staff said the adoption preserves near‑term fund balances while allowing the city to proceed with planned capital projects and pay adjustments. The city will proceed with planned bond sales and project implementation as laid out in the budget documents.