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Montgomery staff outline FY2027 budget with merit raises, insurance hikes and park funding trade-offs
Summary
City staff presented the FY2027 draft budget, proposing a 3% cost-of-living adjustment, a targeted merit program funded at about 50–80% depending on council direction, an estimated 8% health insurance premium rise, and a potential $700,000–$800,000 park project funded from surplus or grants.
City staff presented the draft FY2027 budget at the Montgomery City Council workshop on July 13, laying out pay adjustments, benefit cost increases and proposed uses of surplus funds.
Mary Anne, city budget staff, told council the draft includes a 3% cost-of-living adjustment and a 5% merit pool that is currently modeled as funded at roughly 80% (an effective 4% in practice). "This budget does currently have a 3% cost of living adjustment," Mary Anne said, and she cautioned that merit funding may be adjusted before adoption to balance other priorities.
Staff noted benefit costs are rising: Mary Anne said the base premium in the modeling shows an 8% increase for health insurance and that the average exposure across plans is near 11%. "The premium itself has gone up 8%," she said, adding that final rates will be available at the end of August or beginning of September and could require changes to the adopted budget.
Council discussed options for balancing merit funding against a proposed park project. Staff said they have budgeted $800,000 for the park but offered that the scope can be scaled back to $700,000 to free roughly $100,000 toward merit funding. A presenter said grant applications are in play but warned "don't gamble on that" when relying on grant awards.
On personnel questions, staff said an IT/technical-manager position is still being priced and is not yet included in the current draft; the city is weighing hiring a full-time manager (estimated $80,000–$90,000) against contracted support.
Revenue assumptions were presented as conservative. Staff said certified property values and sales-tax timing create uncertainty; a new large grocer may boost sales tax receipts when it begins operations, but the timing and payment cadence (monthly vs. quarterly) mean any benefit may arrive later in the fiscal year.
The workshop did not adopt formal budget actions; staff said they will return with final insurance rates and refined figures before adoption and that departments (including CCPD) will present their specific line-item budgets for comparison. The council adjourned at 7:56 p.m.
The next procedural step: staff will update the draft with finalized insurance numbers and present department-level budgets and a guaranteed maximum price update for the new city hall in August.
