Title
Resolution to Amend the Fiscal Year 2026 Council Approved Budget to Appropriate $300,000 from General Fund Committed Fund Balance - Budget Savings to Fund a Portion of a 1.5% One-Time Bonus
Purpose
PURPOSE/BACKGROUND:
As part of the recently adopted State budget, the Virginia General Assembly authorized a one-time 1.5% salary bonus for all constitutional officers and their employees, as well as for employees of local departments of social services and electoral boards. This bonus is mandated to be distributed by the end of July and is funded by the State. However, the budget language stipulates that the full 1.5% must be applied to the Compensation Board-assigned salary, regardless of any local supplements.
Providing this bonus only to select employee groups would create an inequity within the organization and could negatively impact morale among the broader CIty workforce. To address this issue, the City Manager recommends we extend the 1.5% bonus to all of the City's permanent full-time employees. Funding will be provided through a combination of departmental end-of-year savings funds, from the General Fund Committed Fund Balance - Budget Savings account, that was originally allocated in the adopted FY26 budget for performance-based (merit) bonuses, and the appropriation of an additional $300,000 from the Committed Fund Balance - Budget Savings account. The Committed Fund Balance - Budget Savings account is generated by allocating a portion of year end savings generated by departments to fund things like bonuses and other initiatives that support the needs of departments. This funding will also cover the cost of any differential between the Compensation Board- assigned salary for the employees covered by the state and their actual salaries.
This approach supports internal equity, reinforces the City’s commitment to its workforce, and helps address recruitment and retention concerns - particularly in departments experiencing high vacancy rates. The bonus will be distributed by the end of July in accordance with State guidelines.
Discussion:
City Council approval is required to appropriate funds from the General Fund Committed Fund Balance - Budget Savings to support the one-time bonus.
Impact:
$300,000
Recommendation:
Rec
Approve the Resolution
Body
WHEREAS, the Virginia General Assembly authorized a one-time 1.5% salary bonus for all constitutional officers and their employees, as well as for employees of local departments of social services and electoral boards; and
WHEREAS, the City Manager proposed a means to use City funds to expand the one-time 1.5% salary bonus to all permanent full-time City employees by using a combination of previously appropriated funds from Committed Fund Balance - Budget Savings allocated for performance-based (merit) bonuses; as well as an additional $300,000 from the Committed Fund Balance - Budget Savings that has not yet been appropriated.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hampton, Virginia that the Fiscal Year 2026 Council Approved Budget be amended and an appropriation of $300,000 be made from the General Fund Committed Fund Balance - Budget Savings to partially fund a one-time bonus for all permanent full-time City employees.
BE IT FURTHER RESOLVED that the City Council authorizes the City Manager, or her designee, to take any and all actions necessary for implementation of the intent of this resolution.