Petersburg Council adopts $144.3 million FY2026 budget amid debate over $3 million class-and-comp allocation

The Petersburg (Independent City) City Council voted to approve the proposed FY2026 operating budget, totaling $144,338,153 across all funds, after discussion over a $3,000,000 non‑departmental line to implement a class-and-compensation study for city employees.

Councilmember Myers moved to approve the budget; Councilmember Smith Lee seconded. A substitute motion to table the budget until the city manager provided an itemized allocation of the $3,000,000 was made but failed for lack of a second. The clerk called the roll on the original motion; on the record, Councilmember Myers voted "aye," Councilmember Smith Lee "aye," Vice Mayor Hill "aye," and Councilmember Cuthbert "no." The vice mayor announced the motion carried.

Councilmember Cuthbert and others pressed for a department-by-department breakdown of the $3,000,000 before approving the budget. "I'm not prepared to vote to support a budget where there's no more disclosure of what's going on than this budget gives us," Cuthbert said. He asked how much of the $3,000,000 would go to police, fire, and other departments and whether the allocation would apply to council staff.

City staff (identified in the record as the city manager and budget staff) responded that the $3,000,000 was placed in a single, non‑departmental line so the funds would be available for implementation once the budget is adopted; staff told council the detailed breakdown would be provided to council and shared after the class-and-comp study is finalized. "What we do not allow is we don't go in and put money in salary and benefits in each department. We hold that item as a single line until the budget is adopted and then we distribute those funds accordingly," the city manager said on the record.

Officials described the class-and-comp process as setting a new pay scale and addressing compression (the pay differences that can leave longer‑tenured employees close to or below newer hires). Staff said the $3,000,000 would fund implementation of that plan and that departmental distributions would be made in accordance with the study's recommendations. Staff also said monthly budget-to-actual monitoring would track expenditures after the new fiscal year begins.

On the record, some council members said they were satisfied with that approach; others said the public and council should see the allocation before adoption. Councilmember Cuthbert attempted a substitute motion to table the budget until the allocation was provided; the motion received no second and died. The council then proceeded to vote to approve the FY2026 operating budget.

Staff indicated the budget would take effect on July 1 and that the administration would meet with employees after adoption to communicate individual impacts.