Richmond holds first reading of FY2027 budget, proposes 4% employee COLA

The Richmond City Board of Commissioners conducted the first reading of Ordinance 26-23, the proposed fiscal year 2027 budget, and discussed a proposed 4% cost-of-living adjustment (COLA) for city employees.

Sharon read the ordinance as presented, outlining resources and appropriations across the general fund and multiple restricted funds. Staff told the commission that budget scenarios had been prepared for 3%, 4% and 5% increases; staff recommended the 4% scenario as affordable within the proposed budget. One commissioner asked directly, “Can we afford it?” and staff responded that the 4% option fits the presented budget and that it increases the budget’s total cost by approximately $230,000 versus a 3% COLA.

Key points read into the record include a general-fund resource level presented at roughly $71.7 million with appropriations in the $57.4 million range and an estimated ending balance in the low-$14 million range; the clerk read detailed figures for contingency, storm-water, capital projects, health insurance, workers’ compensation, parks project bonds, opioid and downtown funds, debt service and tourism accounts. The city manager highlighted the city’s contingency reserve, noting it had grown to about $31.4 million (roughly 52% of the annual budget), and said the city’s finances are sound while the commission remains cautious about future revenue timing.

Commissioners emphasized workforce retention and benefit stability: the 4% increase was presented as a measure to keep pay competitive and to absorb rising insurance costs so employees do not bear higher premiums. The proposed budget also retains a $50,000 competitive grant pool for local nonprofits and reflects regional partnerships with Madison County and Berea for services such as the airport, emergency medical services and animal shelter support. The commission also decided not to include a $37,500 Commerce Lexington contribution in this budget year.

Because this was the ordinance’s first reading, the board did not take a final vote; commissioners moved and seconded the measure to bring it to the floor for future consideration. Staff said further review and a second reading will precede any final adoption and publication as required by KRS 424.240.

What happens next: Ordinance 26-23 will return for a second reading and formal vote at a subsequent meeting; any adjustments to COLA, fund appropriations or partnership commitments would be resolved before final adoption.