Decatur commission approves one-time merit payment for city employees using fund balance

The Decatur City Commission voted on Dec. 15 to approve a one-time merit-based pay adjustment for city employees using available fund balance. Staff recommended a nonrecurring payment equivalent to one pay period for regular full-time employees and a tiered lump-sum for active part-time employees: $500 for those who worked 100'499 hours since July 1, 2025, and $1,000 for those who worked more than 500 hours.

Finance staff estimated the full cost at about $592,000: roughly $512,000 for regular full-time nonprobationary employees and approximately $80,000 for eligible part-time employees. The recommendation uses fund balance as a nonrecurring expenditure and would not raise base salaries. Treasury staff said even after the payment the projected year-end fund balance for FY26 would remain above the city policy target (projected around 33% of the operating budget after the payment).

Commissioners debated the trade-offs: several expressed strong support for recognizing staff sacrifices and the need to remain competitive for recruitment and retention, while others urged caution about equity for residents facing higher housing costs and about adopting recurring cost-of-living commitments without a longer-term plan. After discussion, a motion to approve the one-time adjustment was moved, seconded and passed by voice vote.

Ending: The measure passed; staff will execute the one-time payments and continue planning for budget-year compensation discussions in the FY27 process.