Citing reduced employee turnover, Mayor Joey Hobbs presented during the May 5 Board of Mayor and Aldermen meeting an initial budget plan that includes additional internal incentives and benefits for city employees.

Reading a prepared statement, Hobbs said at the meeting that employee retention has given the city payroll savings. During Fiscal Year 2026, the city reviewed and updated its classification and compensation plan to strengthen employee recruitment and retention.

“The proposed FY27 Operating Budget is balanced, and no tax increase is recommended,” Hobbs said.

During the April Finance Committee meeting, Hobbs did however note that the 2027 budget would pull $1.5 million from city reserves.

For employees, this year’s proposed budget includes 6-8% pay increases to full-time employees. The city will also cover health care expenses that increased 11.2% and contribute up to $270,000 to cover those costs.

Hobbs said in the statement that with the proposed raises this year, “total pay increases will reach 25% over the four years from FY24 through FY27.”

That is in addition to a longevity pay benefit of $1,040 per year for employees after five years of service. In the 2026 budget, this increase will be applied for every additional five years of service. Employees with 20 years of service received an increase last year of $4,160 ($2.00 per hour), according to Hobbs.

“The 2027 Budget takes into account various economic challenges, and that community growth will further the demands for City services. Rising costs due to inflation continue to put pressure on capital projects, labor, and non-labor items across all City Funds. The City’s leadership remains dedicated to cost-effectively delivering these services,” Hobbs said.

The city’s largest revenue sources are sales and property taxes. Revenues are conservatively projected over the next twelve months to increase 3-5%.

No vote was taken during the BOMA meeting regarding the budget.