Liberty Hill council reviews salary-study results and fund-balance policy as budget work begins

Liberty Hill — City finance and human resources staff presented council with a framework for moving employee pay toward market and a proposed update to the city’s fund balance policy during a discussion of general fund needs for fiscal year 2025–26.

Finance Director Josh Armstrong said the city used a June 2024 salary study led by the City of Taylor and supplemental Texas Municipal League (TML) survey data where job titles did not match, and staff produced an initial gap analysis for general-fund positions. “What we really want to talk about as far as employee pay is what is our target?” Armstrong said, asking council to set a market target such as median, midpoint or average so staff can budget accordingly.

Armstrong reported that, as of the Sept. 30, 2024 audit, the city’s general fund balance was approximately $15,000,000 — roughly 1.5 years of operations — and recommended a fund-balance policy with a 25% floor (about 90 days) and a 33% ceiling (about 120 days). He proposed a five-year minimum spend-down plan for any funds above the ceiling so that large one-time investments could be phased instead of spent at once.

Council members stressed that any salary adjustments should reflect workload and not only job titles. One councilmember said, “I want to understand a little bit more of the methodology because I want to understand that we didn't just compare job titles,” asking staff to include workload and certification differences in the final analysis. HR Director Candace and staff said they are developing total-compensation worksheets that combine pay, benefits and other rewards to present a fuller recruitment-and-retention picture.

Armstrong said staff would gather requested details — including a three- to five-year lookback on vehicle acquisition and operations costs (for fleet decisions tied to the budget), a breakdown of police versus other fleet costs, and benefits comparison data — and present updated figures at the budget workshop. He identified June 23 (workshop date referenced in the meeting) and an August 27 target for final budget approval as the near-term timeline.

Armstrong also flagged unbudgeted midyear revenue: staff planned to include a midyear budget amendment adding about $600,000 in additional sales tax revenues; he estimated that amount could total roughly $1.2 million by year end if trends continued. He said such increases, if left unspent, would add to fund balance and underscored the need for a clear policy directing when and how to use excess reserves.

Councilmembers asked for training and succession planning to be part of a total compensation and workforce optimization strategy. HR staff said they are working with department directors on training programs, leadership development, and five-year career plans for employees.

No formal pay changes were adopted at the meeting. Council directed staff to return with more detailed compensation methodology, peer comparisons that factor in workload and benefits surveys, and a draft fund-balance policy that sets floor, ceiling and a multi-year spend-down plan for amounts above the ceiling.