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Marietta budget preview: staff flags tight FY27, 4% midyear pay assumption and use of self-insurance reserves
Summary
City finance staff told the Finance & Investment Committee the FY27 budget outlook is tight, with a 4% midyear raise assumed for eligible employees, no new full-time headcount, use of roughly $1.0M from self-insurance reserves this year and a 3% BLW transfer to the general fund.
City finance staff presented a preliminary outlook for fiscal year 2027 to the Finance & Investment Committee, stressing constrained revenue growth and several cost pressures that make the coming year “extremely tight.” Patina, the staff presenter introduced by the committee, said the recommended budget will be circulated ahead of the full finance committee meetings later in May.
The draft assumptions include a midyear pay increase of 4% for eligible employees (defined as staff hired on or before July 1 with six months’ service), while headcount remains flat. “We assume ... a midyear salary increase for all employees that are eligible,” Patina said. She emphasized the increase is conditional on eligibility rules and other qualifications.
Health care and self-insurance were a central focus. Patina said employees have not faced higher premium contributions since 2018, but employer-side costs have risen and the city covered the difference. The city drew on its self-insurance reserves this fiscal year to cover property, casualty and health costs; Patina said the original forecast called for using about $2,000,000, but current estimates show the city will use just over $1,000,000.
To manage property and casualty exposure the city moved coverage into a pool with the Georgia Municipal Association (GMA), which staff said provided a rate hold period and cost relief. Patina said this move helped avoid passing additional costs to other city funds.
On the revenue side, staff said most general fund revenue streams are flat or only modestly growing. Patina told the committee the city does not anticipate changing the certified millage rate; staff estimate a roughly 3–3.3% increase in property valuations for the city, lower than a countywide 4% number that is concentrated in commercial property.
Board of Lights and Water (BLW) items: the proposed budget does not include retail rate increases for BLW customers, and the BLW agreed to a 3% transfer to the general fund this year (a CPI-based transfer). Staff warned wholesale supplier moves will affect BLW cost of sales: the city has notice of a 5% wholesale water increase and a 3.5% wastewater increase from suppliers, timing to take effect late in the calendar year or mid fiscal year.
Patina also noted budgeted general fund salary savings of about $1,740,000 tied to natural attrition and position timing, and estimated capital funding at roughly $1,000,000. On tourism-related revenue, she reported hotel/motel collections have declined year over year, while auto rental collections included a one-time audit-related spike of around $170,000 in the prior year; she said a FIFA-related bump in hotel receipts would likely fall outside the FY27 budget window.
The presentation was informational only; committee members asked clarifying questions and staff said they will return with the full recommended budget and supporting budget book at the finance committee meetings later in May.
