Council directs 2.5% cost‑of‑living increase for town staff in FY26 draft budget

The council gave direction to include a 2.5% cost‑of‑living adjustment for town staff in the draft FY26 budget.

Finance staff presented a table of wage and inflation indicators — including the federal Social Security adjustment, Bureau of Labor Statistics indices and an internal compensation survey — that averaged to about 3.53%. Staff noted each 1% of COLA would add roughly $107,000 to the budget, with about $98,000 of that impact falling in the general fund.

Council members debated the appropriate percentage. Several members said they preferred a smaller, conservative adjustment because the town is managing revenue uncertainty and needed to preserve contingency. Council members who supported a higher figure cited local cost pressures and retention concerns. After discussion, a majority indicated support for 2.5% and staff said they would include that amount in the tentative budget.

Paul clarified that the estimated payroll impacts presented did not include any final COLA until council formally adopts the tentative and final budgets. Staff also noted the COLA decision affects contingency and that any staff pay adjustments will reduce general‑fund contingency accordingly.

Ending: Staff will include the 2.5% COLA in the tentative FY26 budget and show the fiscal impact at the May tentative budget meeting; final adoption remains subject to the June public hearing and council action.