Nogales council adopts tentative fiscal 2025-26 budget; city absorbs 25% health-insurance increase
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Summary
After study sessions and public hearing, the Nogales City Council adopted a tentative budget for FY2025-26, approved insurance renewals and accepted staff proposals to absorb a roughly 25% increase in employee health premiums while pursuing targeted personnel and operational changes.
The Nogales City Council voted to adopt the tentative budget for fiscal year 2025-26 and approved insurance renewals for property, liability and workers' compensation. Councilors and city management said the city will absorb an approximately 25% increase in employee health-insurance premiums rather than passing the full increase to staff.
The city manager explained that increases in insurance premiums would have substantially offset planned compensation adjustments for employees and that the administration proposed to carry the additional cost within the adopted budget. "We are not going to infer those costs onto employees," the city manager said, describing the decision to keep employee contributions at the current level for the coming year.
Councilors and the manager also discussed several budgeted but vacant personnel positions, including an assistant/deputy city-manager-level allocation and a civil-engineering designer. The manager said some budgeted positions have been left open in prior years and that leaving allocations in place allows flexibility to recruit targeted skill sets; councilors asked management to explore creative uses for vacancies, such as economic-development duties or grant support.
Several capital and operational items were discussed and approved at the meeting, including a multi-year lease/purchase arrangement for three fire vehicles and funding for street and water projects. The council also approved in-kind support for a downtown Morley Avenue sidewalk sale and authorized a public hearing and adoption process for the full budget as required by state law.
Council members described the two-day public study sessions on the budget as useful for transparency and said they were satisfied with the management team's outreach to staff. No tax-rate changes were adopted during the hearing; the council scheduled required public-notice steps and the final hearing on the budget calendar.
Next steps: Staff will finalize the published tentative budget and required public notices and will return to council for the final public hearing and adoption of the FY2025-26 budget, including implementation details on insurance costs and any personnel decisions that require council approval.
