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City staff recommend 2.9% COLA plus step increases; average raise ~4%
Summary
Human-resources presentation recommended a personnel-cost approach that pairs a 2.9% cost‑of‑living adjustment with step increases, producing an average estimated increase of about 4% citywide and a personnel cost of roughly $559,000 for FY‑26.
Randy Boyd presented the city’s compensation analysis and recommended a combined approach—apply the DLG‑recommended COLA of 2.9% and advance employees one step on their pay scale—rather than a full market adjustment or step-only plan.
Boyd said the city’s annual market review, prepared with Hanna Resource Group, shows an average market variance of about 9.9% across job classes. He outlined three options: (1) step-only adjustments (estimated cost about $189,000), (2) COLA (2.9%) plus step (his recommendation; estimated cost about $559,000, or roughly a 2.5% increase over FY‑26 baseline), and (3) a full market adjustment (estimated about $1.4 million).
Boyd recommended option two for sustainability. He explained that a full market adjustment would be “really expensive,” while a step-only approach would risk losing ground in the labor market. Under the recommended plan the average total pay increase would be about 4 percent, with individual adjustments varying by job class and step placement.
Boyd also reviewed other personnel-cost drivers: healthcare renewals (he said the city budgeted a near‑$500,000 increase for medical premiums this year), retirement contribution rates (CRS), overtime demand and FICA and Medicare matches. He cautioned that retirement rates and health costs are variable and must be monitored annually.
Commissioners asked follow-up questions about sustainability; Boyd and city staff said they prefer annual adjustments to avoid a large catch‑up gap and to preserve a “total rewards” package that includes health coverage. The commission did not vote at the meeting; staff said the recommended personnel numbers will be included in the draft budget for further discussion.
Ending: Boyd’s proposal will be included in the draft budget; the commission and staff plan additional review of benefits and revenue before finalizing personnel-related budget items.
