Bedford proposes FY2025–26 budget that would raise tax rate to fund employee COLA, public-safety step increases

Bedford Assistant City Manager Karen Riggs on Aug. 7 presented a proposed fiscal year 2025–26 budget that would raise the city’s property tax rate to the voter‑approval level to help pay for employee compensation adjustments and public‑safety step plan changes.

Riggs told the council the proposal includes a 3% across‑the‑board pay increase for employees and a 30% non‑retroactive cost‑of‑living adjustment (COLA) in the Texas Municipal Retirement System that would take effect Jan. 1, 2026. “We did a 3% for all employees,” Riggs said; she added the TMRS item is “30% non retroactive TMRS COLA, which means that it goes into effect 01/01/2026.”

Why it matters: the council was shown that moving to the voter‑approval tax rate — a roughly three‑cent increase described in the presentation — would generate about $1.3 million across the property‑tax funds and roughly $1.2 million for the general fund. Riggs said the TMRS COLA would add roughly $400,000 to the general fund on an ongoing basis. Council members and staff repeatedly emphasized the budget choices are intended to preserve service levels while addressing recruitment and retention.

Key details and context

- Taxes and revenue: The staff presentation explained the “no‑new‑revenue” rate would simply collect the same total property tax revenue as the prior year, while the voter‑approval rate (the higher option presented to council) would allow the additional revenue the administration is recommending. Riggs said Bedford’s taxable value growth this year was modest — about 0.6% — and the budget team used conservative sales‑tax projections (2% for the rest of the year and 2% for FY2026) because sales tax receipts have flattened.

- Compensation and public safety: The budget proposal prioritizes employee compensation. In addition to the 3% general COLA, public‑safety step plans for police and fire would be adjusted to improve market competitiveness. Riggs said police recruits were proposed to be separated into their own recruit step and police officer steps compressed incrementally; fire step counts would be reduced from seven toward a lower number over time. Staff identified roughly $1.35 million of the proposed ongoing increases as directed to employee compensation and benefits overall.

- TMRS COLA: Staff described the TMRS change as non‑retroactive (no back pay) and ongoing. Riggs said the retroactive option was previously unaffordable because of compounding liability going back to the system’s 2009 implementation; the budgeted non‑retroactive 30% option has a smaller, ongoing fiscal impact.

- Cost pressures and tradeoffs: Riggs noted health‑insurance and workers' compensation costs have trended up, and the city bid health coverage and switched carriers last year to moderate increases. She said the administration recommended sharing some insurance increases with employees for the first time in seven years while protecting retention. Staff also described a multi‑year view in which reappraisals and new construction will create periodic swings in taxable value and tax‑rate calculations.

- Fund management and budget balancing: Finance staff said the general fund budget is tight but near balanced after accounting for about $828,000 in one‑time expenditures; the administration proposed using existing fund balance for limited one‑time items while protecting the city’s 20% reserve policy for ongoing operations.

- Supplementals and targeted additions: The proposed budget includes a small number of targeted new or one‑time items, such as a new neighborhood services officer for code enforcement and property maintenance, funding for managed IT security monitoring, and several one‑time public‑safety and parks purchases. Riggs said the neighborhood services officer is intended to reduce inspection turnaround times and help with multifamily and rental inspections.

Nut graf: Bedford’s proposed FY2026 budget asks the council to accept a modest tax‑rate increase to fund pay‑related investments — primarily public‑safety step adjustments and a citywide COLA plus a 30% non‑retroactive TMRS adjustment — while keeping one‑time spending limited and preserving the city’s reserve policy.

What’s next: Council and staff set a schedule to accept the certified roll and hold public hearings; staff said a public hearing and adoption of the budget and tax rate are planned for Sept. 9.

Ending: Councilmembers asked for follow‑up materials on several topics, including a detailed breakdown of the general‑fund revenue impact and options for implementing TMRS or debt financing in future years if interest rates change. Staff said they will return with the certified property roll and formal tax‑rate ordinance at the next public hearing sequence.