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Committee backs 4.5% COLA, city to cover 4.75% health‑insurance increase and planned bonuses
Summary
City Manager Glenn Adams presented a 4.5% cost-of-living adjustment proposal, and the committee heard staff confirm that the city will absorb a 4.75% health-insurance increase; bonus funding and payroll tax/pension impacts were also quantified.
Homewood City staff recommended a 4.5% citywide cost-of-living adjustment and a one-time, tiered employee bonus in the FY 2025–26 budget, and the finance committee expressed support during the Sept. 24 special meeting.
City Manager Glenn Adams said the budgeted 4.5% COLA is higher than earlier drafts (3.5%) and that the increase allows the city to remain competitive with neighboring jurisdictions. Adams provided the committee with detailed cost estimates for the bonuses: the gross bonus cost is $279,007.50; estimated employer tax gross-up is $81,004.21; and estimated pension costs are $78,009.76, producing a combined budget impact of about $440,001.47. Adams said those amounts were already incorporated into the proposed budget.
Adams also told the committee the state-provided health-insurance increase for the city’s plan is 4.75% this year and that the city intends to cover the full increase rather than shift a portion to employees. Councilors on the finance committee voiced support for the package and frequently cited recruitment and retention as rationales for the higher COLA.
Why it matters: the COLA, bonus and insurance decisions affect payroll costs and recruiting; by budgeting the full insurance increase and a meaningful COLA, the city aims to keep pay competitive without increasing employee premium contributions.
