During the Abilene City Council Budget Workshop held on July 21, 2025, significant discussions centered around potential changes to the Texas Municipal Retirement System (TMRS) benefit plan for city employees. The primary focus was on the introduction of a non-retroactive cost-of-living adjustment (COLA) option, which could enhance employee retention and recruitment.

Historically, Abilene's retirement plan has not included regular COLAs, opting instead for periodic adjustments intended to address inflation impacts. The proposed non-retroactive COLA would allow for annual adjustments based solely on the previous year's Consumer Price Index (CPI), making it more affordable and easier to manage for the city. This change comes in light of recent legislative amendments that permit cities to adopt this new COLA structure.

The council discussed the financial implications of implementing a 30% repeating COLA, which would increase the employer contribution rate from approximately 11% to 14%. While the overall cost to the city would rise, the immediate impact on the general fund would be about $1.4 million, as the adjustment would not take effect until January 1, 2026. In contrast, a retroactive COLA option would significantly increase costs, raising the employer contribution rate to 16% and adding approximately $4 million to the budget.

City officials expressed confidence in their ability to fund the proposed COLA without altering the current tax rate. They highlighted potential increases in sales tax revenues and property tax estimates as viable funding sources. The council is expected to make a decision on whether to pursue the non-retroactive COLA option in the coming weeks, with further discussions planned regarding the overall budget and tax rate.

This meeting underscored the city's commitment to improving employee benefits while balancing fiscal responsibility, a crucial consideration as Abilene navigates its budgetary priorities in the face of rising inflation and economic pressures.