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Council work session probes FY26 budget gaps and a proposed 3% across-the-board raise
Summary
Staff outlined options to close an estimated $20 million FY26 shortfall (restructuring, fee changes, position eliminations) and presented a recommended 3% across-the-board pay increase to keep city salaries near market; staff also presented scenarios (delays or reduced raises) and impacts to staffing and services.
City budget staff returned to the council with follow-up information on the proposed fiscal-year 2026 budget and compensation scenarios aimed at addressing a roughly $20 million shortfall.
Trey Alberton reviewed public input from town hall meetings and the staff nalysis behind the proposed compensation package. Human Resources Director Yvonne McCain and staff presented market-comparison data showing Arlington—urrently sits slightly above market in one measure but that the proposed 3% across-the-board raise would keep the city approximately 0.9% below market averages for peer cities; without the raise, staff said Arlington would fall further behind. The proposed FY26 package reflected prior adjustments across several years and staff said the market-average proposed raise among benchmark cities is about 3.63%.
Budget staff outlined scenarios to close the FY26 gap: financial restructuring and fee adjustments (about $7.7 million), program reductions, elimination of 42 vacant positions, and options to delay or reduce raises to realize short-term savings (a 3-month delay saves about $1.7 million; a 6-month delay about $3.4 million). Staff recommended the full 3% raise to remain competitive and avoid morale impacts; council members asked questions about alternatives, timing and the effect on other partner organizations (for example CVB staffing and budgets).
Alberton said additional narrow revenue and expenditure adjustments identified since the proposed budget presentation could yield roughly $244,000 in net benefit (fire-inspection fee adjustments, appraisal-district reassessments and downtown corporate savings), and he offered council choices on applying those dollars to reduce the tax rate or to prioritize spending (streets, fleet, buildings). He reminded council of procedural deadlines: a near-term decision point to set the proposed tax rate for public hearing on Sept. 9 and subsequent votes later in the month.
