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City presents tentative FY2026 budget with $20 million bond plan and staff-pay debate
Summary
Cottonwood Heights staff presented a tentative FY2026 budget that includes issuance of roughly $20 million in general obligation bonds, reductions to a Unified Fire Authority (UFA) assessment, a lower sales-tax projection, and a council discussion over a 3% total employee compensation package split between COLA and merit.
Cottonwood Heights' finance director Scott presented the city's tentative FY2026 budget, outlining major revenue and expenditure assumptions and asking the council to adopt the tentative numbers for public inspection. He said the proposal "includes the effect of issuing about $20,000,000 of general obligation bonds," a portion of a previously authorized $30 million program intended to pay down current debt and fund capital projects.
The draft budget also factors in a smaller-than-expected increase from the Unified Fire Authority assessment; Scott said staff worked to reduce the UFA request to about $139,000 from an earlier projection near $270,000. Sales-tax revenue was conservatively reduced to about $9.5 million for FY2026, down from previous projections, and staff flagged an anticipated but timing-uncertain revenue source (the "fifth of the fifth") that could add roughly $460,000 to capital funds when it arrives.
Council members focused discussion on personnel costs. Scott presented scenarios that would keep total employee compensation growth near 3% and asked how to split that between cost-of-living adjustments and merit pay. Council members discussed options including 2% COLA/1% merit, 1.5%/1.5%, or 2%/1% for certain employee groups. Chief Russo, speaking for public safety, argued that COLA helps recruitment and retention for sworn positions.
Scott committed to returning to the council with a fiscal summary that translates the proposed COLA/merit splits into dollar amounts for the packet and a formal motion at a later meeting. The tentative budget packet also shows planned transfers, debt-service impacts, and a projected ending general-fund balance near 13% of revenues under the assumptions presented.
What happens next: the council discussed posting the tentative budget for public inspection and scheduling a public hearing at the June meetings to consider the final adoption and any adjustments before the start of the fiscal year on July 1.
