The City of Memphis budget and audit committee received a first‑quarter FY26 fiscal overview on Nov. 18 from CFO Walter Person, who said total general fund expenditures were approximately 25% of budget at the quarter mark but highlighted several risk areas. Person identified elevated pensioner insurance and grants/subsidies as drivers pushing certain lines above seasonal norms and said information technology (SaaS) costs and other line items will need close monitoring.

Person summarized the current forecast: if departments continued to spend at the existing Q1 burn rates, expenditures could be roughly $10 million above the funding budget; at the same time, revenue forecasts showed a potential shortfall of about $7 million — producing a combined possible gap of approximately $17 million if current trends persist. He reported an operating fund balance of about $93.48 million and emphasized the forecast is sensitive to seasonal and timing effects in tax receipts and grants.

In response to an administration proposal, councilmembers approved language to raise any full‑time city employee whose salary is below $40,000 up to $40,000; administration and CFO indicated divisions can absorb the roughly $700,000–$800,000 cost within existing funding using current encumbrance and budget authority. That item was set to go to the full council with same‑night minutes for implementation.

Separately, the administration proposed a mid‑year 2% pay increase for the Memphis Fire Association at an estimated cost of about $1.7 million. After extended debate about fiscal timing and the forecast gap, the council voted to hold that fire‑raise resolution for two weeks to allow follow‑up meetings between council leadership, administration and finance for further review and to coordinate with other bargaining units. Several councilmembers said the delay was intended to give the full body more data and time to reconcile the fiscal forecast with compensation decisions.

Committee chairs asked administration and finance to provide more granular month‑by‑month and quarter‑by‑quarter trend material, and to return with a short briefing on pensioner insurance and IT license cost pressures ahead of budget work this winter.