Page 77 - FY 2021-22 ADOPTED BUDGET

OPERATING FUNDS BUDGET PROPOSAL

The 2025-26 Budget adequately provides for meeting the operational demands of the City. Operating Fund
expenditures, transfers, and use of reserves for 2025-26 in the amount of $27,796,779 are $269,538 less than
expenditures and transfers budgeted for 2024-25 in the amount of $28,066,317. The 2024-25 budget includes
$300,000 in transfers from the General Fund; the 2025-26 Budget includes the transfer of $600,000.

SALARY ADJUSTMENT AND FRINGE BENEFIT INCREASES

COST-OF-LIVING INCREASE

The 2025-26 Budget includes funds for a 2.0 percent cost-of-living adjustment for all employees due to inflation.

MERIT INCREASES FOR ELIGIBLE EMPLOYEES
Employees who are at steps one through six are eligible for a five percent or one-step merit increase on the
employee’s anniversary date. Merit increases are based on job performance and are implemented following an
evaluation by the employee's supervisor; funds for merit increases are included in the 2025-26 Budget.

FRINGE BENEFIT ENHANCEMENTS

The 2025-26 Budget includes funds to finance an up-to twenty percent increase in employee health, dental, and
life insurance premiums, subsidies, and reimbursements. Through negotiations with the City’s current providers
for group health, dental, and life insurance for renewals effective November 1, 2024, the City expects to continue
funding the entire employee premium; to adjust the subsidy for dependent health insurance to cover the increase
in these costs; and to enhance the reimbursement program for out-patient procedure, surgery, and hospitalization
co-payments.

All full-time employees contribute seven percent of salary to the Texas Municipal Retirement System (TMRS). The
City matches these contributions on a two-to-one basis. TMRS informed the City that the City’s rate is scheduled
to increase from the current rate of 17.42 percent to 17.47 percent on January 1, 2026.

PERSONNEL CHANGES

POSITIONS
The are no personnel changes in the 2025-26 Budget.

CAPITAL OUTLAY AND EQUIPMENT PURCHASES

The Budget includes the transfer of $550,000 from unrestricted General Fund reserves to the Capital Asset
Replacement Fund for future capital outlay purchases. Also, a transfer of $50,000 to the IT/Facilities Fund for
possible use with the construction of the new municipal complex. The re-building of these funds allows the City
flexibility in future years to purchase costly capital items.

63