City finance outlines budget pressures: pension, health costs and SAFER grant uncertainty
June 19, 2025 | St. Cloud, Osceola County, Florida
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St. Cloud — City finance staff presented a budget update that identified several structural pressures going into next year’s budget, including rising pension contribution rates, increasing health-benefit costs, lower sales-tax receipts and a pending SAFER grant for firefighters.
Deputy Finance Director Mark Mula told the council the city’s unassigned fund balance has been reduced substantially from prior levels and staff are seeking to stabilize it. He said sales-tax receipts were down about 5% year-over-year (roughly $700,000) and that revenues the city receives through an OUC interlocal agreement were lower in the most recent reporting year in part because a temporary fuel surcharge had expired (staff estimated an $800,000 difference tied to that prior surcharge).
Mula said the city is budgeting for higher pension costs: police and fire contribution rates moved from roughly 27% several years ago to about 39% in the new projections. Total pension contributions across funds are estimated at about $11.5 million, roughly 13% of the general-fund budget. Staff also told council that health-insurance costs are increasing at approximately 10% year over year and that next year’s general-fund health-benefit expense will exceed $7 million.
On public safety staffing, the city applied for a Federal SAFER (Staffing for Adequate Fire and Emergency Response) grant that would fund up to 48 firefighters; Mula said the total annual cost for 48 firefighters is about $4.8 million, and the city’s share if the grant is awarded would be roughly $1.3 million for the first two years (the city’s share would increase in later years). Staff said they budgeted $2 million from unassigned fund balance in the draft to cover near-term fire staffing if the grant is not awarded.
Council members asked clarifying questions about revenue assumptions and about whether contingencies should be included if the SAFER grant is not received. The city manager and finance director said staff would continue to refine projections and meet individually with council members before a July workshop and formal budget hearings.
No formal budget adoption took place at the meeting; staff scheduled a July 14 workshop to continue the process.
Deputy Finance Director Mark Mula told the council the city’s unassigned fund balance has been reduced substantially from prior levels and staff are seeking to stabilize it. He said sales-tax receipts were down about 5% year-over-year (roughly $700,000) and that revenues the city receives through an OUC interlocal agreement were lower in the most recent reporting year in part because a temporary fuel surcharge had expired (staff estimated an $800,000 difference tied to that prior surcharge).
Mula said the city is budgeting for higher pension costs: police and fire contribution rates moved from roughly 27% several years ago to about 39% in the new projections. Total pension contributions across funds are estimated at about $11.5 million, roughly 13% of the general-fund budget. Staff also told council that health-insurance costs are increasing at approximately 10% year over year and that next year’s general-fund health-benefit expense will exceed $7 million.
On public safety staffing, the city applied for a Federal SAFER (Staffing for Adequate Fire and Emergency Response) grant that would fund up to 48 firefighters; Mula said the total annual cost for 48 firefighters is about $4.8 million, and the city’s share if the grant is awarded would be roughly $1.3 million for the first two years (the city’s share would increase in later years). Staff said they budgeted $2 million from unassigned fund balance in the draft to cover near-term fire staffing if the grant is not awarded.
Council members asked clarifying questions about revenue assumptions and about whether contingencies should be included if the SAFER grant is not received. The city manager and finance director said staff would continue to refine projections and meet individually with council members before a July workshop and formal budget hearings.
No formal budget adoption took place at the meeting; staff scheduled a July 14 workshop to continue the process.
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