Boise City Council proposes 2.6% employee compensation increase amid PERSI cost concerns

During the Boise City Council's recent budget workshop, a significant focus was placed on employee compensation and the rising costs associated with the Public Employee Retirement System of Idaho (PERSI). Council members discussed the proposed 2.6% base salary increase for city employees, emphasizing the need to retain talent and stabilize the workforce in the wake of challenges posed by the COVID-19 pandemic.

City officials highlighted that the largest expense for the city is its workforce, making even slight adjustments in compensation impactful for future flexibility. The proposed changes also include a reduction in the forecast for future one-time compensation from 3% to 2.5%, which aims to balance current needs with long-term financial health.

Concerns were raised about the increasing PERSI costs, attributed to factors such as market fluctuations and a growing number of retirees drawing benefits compared to those contributing to the system. Council members expressed the importance of understanding these dynamics as they plan for future budgets.

Additionally, discussions touched on health insurance contributions, which are projected to decrease from 4.5% to 3%. This adjustment aims to maintain flexibility in the budget while signaling potential changes in health care plans for employees.

The council's approach reflects a commitment to evaluating compensation annually, ensuring that adjustments align with market trends and the city's financial capabilities. As the council navigates these budgetary decisions, the focus remains on providing competitive compensation while safeguarding the city's long-term financial stability.