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Marietta finance staff warns of a tight FY27 budget, recommends mid‑year raises and use of reserves
Summary
City finance staff gave the Finance & Investment Committee a FY26 performance update and an FY27 preview that includes a proposed 4% mid‑year pay increase for eligible employees, no new full‑time headcount, use of roughly $1 million in self‑insurance reserves this year and continued pressure from rising property/casualty and wholesale water/wastewater costs.
Finance staff presented a FY26 financial performance update and a preview of the recommended FY27 budget at a special meeting of the Finance & Investment Committee. The presentation, delivered by city finance staff (speaker 6), emphasized that revenue growth is constrained, several cost drivers are increasing and the budget year will be tight.
Staff said a 4% mid‑year salary increase is assumed for eligible employees (those hired on or before July 1 and employed for six months), while no additional full‑time positions are proposed. “We assume a mid‑year increase of 4% for eligible employees,” the presenter said, noting certain long‑service qualifications apply. The city also built approximately $1.74 million in salary savings from anticipated attrition into the general fund assumptions and set capital funding near $1.0 million.
On benefits, staff noted that employee contributions for health care have not increased since 2018, but employer costs have risen. The city expects to use self‑insurance reserves to cover higher property and casualty premiums this year; staff estimated the FY26 draw would be just over $1.0 million (down from an earlier $2.0 million projection) after switching providers and joining a GMA pool to stabilize premiums.
Utilities and transfers factored into the budget picture: the Board of Lights and Water (BLW) is not proposing retail rate increases in the FY27 budget, but wholesale suppliers have notified the city of potential increases — staff cited an anticipated 5% wholesale water increase and a 3.5% wastewater increase from suppliers. BLW agreed to a 3% general‑fund transfer tied to a CPI calculation for FY27.
Staff also discussed property valuations and taxes, saying the city expects about a 3–3.3% rise in property tax valuations tied primarily to commercial assessments, while noting pending state legislative actions could affect real‑estate tax law and local revenue going forward. Franchise fees tied to telephone and cable services continue to decline because of industry shifts such as streaming.
The finance staff closed by saying the FY27 recommended budget book will be distributed in advance of the May finance committee meetings and that the special briefing required no committee action. The full recommended budget will return to committee later this month.
