Roy council weighs property tax increase, cuts to close $750,000 FY26 budget gap for employee pay

Roy City held a special work session on Feb. 18, 2025 to discuss fiscal year 2026 budget preparation, focusing on a projected $750,000 shortfall in the general fund to cover employee cost-of-living adjustments (COLA) and merit increases.

The council heard staff estimates that paying COLA and merit increases across all city employees would total about $1,100,000, and that the utility enterprise fund can cover its assigned employees while the general fund faces a roughly $750,000 gap. Mayor said the city’s sales and use tax revenue has stabilized and that the difference must be addressed either by generating new revenue, cutting expenses, or a combination.

Why it matters: Council members and staff said the shortfall could affect employee morale and retention if not addressed. Councilors discussed revenue steps (property tax increases, using one-time proceeds) and expense reductions (program cuts, frozen hires, benefit adjustments) as ways to close the gap.

Cou…