Marietta finance staff warn FY25 general fund pressure from insurance and flat revenues

Bettina, a city finance presenter, told the Finance and Investment Committee that the city’s fiscal-year 2025 financial picture is tightening as insurance costs rise and many revenue lines are flat or declining.

The report, delivered in a special-call meeting, previewed assumptions being built into the FY26 recommended budget, including a 4% midyear salary increase (subject to council approval), no built-in employee health‑care premium increases and planned use of reserves to cover higher self‑insurance costs.

Why it matters: higher insurance premiums, uncertainty from pending state legislation and an unsettled court ruling could sharply increase the city’s liability costs; at the same time many revenue sources that fund operations and capital — property tax assessments, hotel/motel and auto‑rental excise taxes, business licenses and permit revenues — show only modest or uneven growth, constraining options for FY26.

Bettina said the FY26 draft includes a built‑in 4% midyear salary increase for all funds, noting that midyear increases are reviewed and approved by council. She also said the draft does not include employee health‑insurance cost increases for employees, though employer-side self‑insurance and other health costs remain a significant budget pressure.

On self‑insurance, city staff have budgeted about $2,000,000 of reserve from the self‑insurance fund to smooth health‑care costs this year and reported the fund holds…