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Finance update flags revenue and pension risks; council weighs midyear pay measures including $40k minimum and a delayed 2% fire raise
Summary
CFO Walter Person told the Budget Committee Q1 expenditures are near 25% but flagged pensioners insurance and IT software overruns; the mayor proposed raising full-time city employees earning under $40,000 up to $40,000 (to be sent same-night) while council agreed to hold a proposed 2% fire raise for two weeks for additional fiscal review.
The Budget Committee received a detailed Q1 FY26 financial briefing and then debated two administration proposals to address pay equity for lower-paid city employees and a separate increase for the fire association.
CFO Walter Person said total expenditures by division are roughly 25% (consistent with one quarter elapsed) but highlighted several risk areas: pensioners insurance is running hot and is embedded in grants & agencies lines, and IT software (SaaS licenses) could run roughly $2.2 million above budget. Person said state tax collections are lagging relative to peer counties, raising concern about revenue timing and totals. On the consolidated forecast, Person said the city could face about a $7 million revenue shortfall and roughly a $10 million expenditure risk if current trends persist.
Mayor Paul Young introduced a midyear resolution to raise full-time city employees earning below $40,000 up to $40,000 (estimated fiscal impact roughly $798,325) and a separate proposal to grant a 2% increase to firefighters (about $1.7 million). The council agreed to send the $40,000 floor measure to same-night council consideration so HR can start implementation, but members asked for more detail and for finance and administration to supply further forecasts. For the 2% fire increase, council voted to hold the item for two weeks to allow meetings between council leadership, CFO and administration and to review additional revenue/expenditure data.
Council debate balanced equity and recruitment goals against short-term fiscal caution. Several council members urged transparency (monthly or quarterly run rates and historical Q1 comparisons) and requested additional briefings on pensioner insurance, vendor/ CIP classification and IT fixed costs before June budget decisions. Chair Carlisle and members stressed they will work with administration to identify controllable expenses and adapt hiring and overtime plans to stay on budget.
Representative quote: "This time of year, I will say this. This is really early in the year... but that's the path that we are tentatively on," CFO Walter Person said when describing the forecast challenge.
Ending: The council authorized immediate same-night consideration for the $40,000 floor, agreed to hold the 2% fire increase for two weeks while staff prepares a more detailed fiscal package, and requested repeated quarterly updates and division-level follow-ups ahead of final FY26 decisions.
