Centerville presents tentative FY2026 budget; council questions merit pay metrics and revenue assumptions

Nate (city staff) presented Centerville’s tentative fiscal-year 2026 budget during a public hearing, describing it as a balanced proposal that preserves service levels while moving to address employee compensation, fleet and equipment replacement, and infrastructure maintenance. "Our proposed budget...reflects a balanced budget that shows significant progress towards funding key services provided by the city, including public safety, parks, transportation, culinary water, and drainage," Nate said.

Key items in the presentation: staff proposed a 2.5% cost-of-living adjustment (COLA) to match the December‑to‑December CPI and a 2% merit pool to be allocated by department heads; staff estimated a 5% increase in property and auto insurance and a 7% increase in medical and dental insurance. The staff recommendation did not include a property-tax rate increase; Nate noted that the city will not have final new-growth numbers from the county until June, and that will affect the final tax revenue available. "Once the tentative budget is adopted, it’ll be available for review on our website as well as a physical copy here at city hall," Nate said, and reminded the council that final adoption would occur in June after public comment.

Council members pressed for clarity on the proposed merit pool. One council member said a department head should not be able to allocate the merit pool in a way that awards one person most of the pool without an objective evaluation metric. Nate and staff said department heads typically distribute merit funds based on performance evaluations and that unused merit dollars revert to the budget at year end. Staff also said Brent (city administration) has final review of proposed raises and can push back if allocations appear unreasonable.

Staff reported updated revenue-line estimates since the budget retreat: justice-court revenue was increased from $320,000 to $350,000 on the basis of year‑to‑date citation numbers, and sale-of-fixed-assets was corrected to $305,000 after removing an originally budgeted vehicle replacement. Sales-tax revenue remained budgeted at $5.5 million in the tentative budget.

Nate reiterated the timeline: adoption of a tentative budget makes the plan public and starts the window for comment and amendment before the June final adoption. The hearing was opened; no final budget action was taken at the meeting. Council members requested clearer merit-evaluation metrics, and staff said it would return with refined data and recommended changes before the June adoption.