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Council debates TMRS cost-of-living adjustment window after $1M buy-down; timing drives urgency
Summary
Staff explained a proposal to adopt a 30%-of-CPI cost-of-living adjustment (COLA) for TMRS retirees, enabled by a $1,000,000 buy-down of plan liability. Councilors asked about funding implications, catch-up options for retirees, and timing tied to a state window; transcript shows motions to take action but does not include a clear final roll-call on the COLA decision.
Staff briefed council on the town's retirement participation in the Texas Municipal Retirement System (TMRS) and presented a narrow proposal: adopt a 30%-of-CPI COLA option now that would apply going forward and take advantage of a state allowance closing at the end of the year. The presenter said a prior $1,000,000 liability buy-down (from salary savings and pandemic funds) reduced the town's employer contribution and created fiscal room to add a modest COLA without a large immediate cost.
Councilors asked practical questions such as whether the town would need to "catch up" existing retirees and how the additional benefit would affect the plan's funding ratio. Staff explained the 30% option would not require full retroactive catch-up and characterized the change as a first-step approach that could be increased to 50% or 70% in future budgets if funding allows. As one councilor clarified, "It's 30% of what the CPI is annually," which staff confirmed and illustrated with an example: 6% inflation would yield a 1.8% increase under a 30% factor.
The transcript records a motion to approve the COLA item and a second; the record also includes discussion urging a cautious, phased approach and a request to show briefing dates on regular agenda items so the public can track prior review. The transcript does not include an explicit roll-call result for final passage in the excerpt available; this article therefore reports the discussion, the council motion and the deadline-driven urgency but does not claim final adoption.
If the council finalizes a change in TMRS elections, staff said it will be incorporated into the 2025 retirement year and reported in future budget documents. The presenter and finance staff noted the town's funding ratio was in the low-100s and the proposed change would keep it in a strong funded position by their packet estimates.
