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Council hears proposed pay plan, 2.5% COLA and TMRS contribution increase
Summary
Staff proposed a two-step compensation approach for FY2526: a 2.5% cost-of-living increase at the start of the fiscal year and a later implementation of a revised step pay plan after a salary survey; staff also recommended increasing TMRS contributions toward 20-year retirement eligibility.
City staff presented a proposed two-phase pay plan for FY2526 that would give all employees a 2.5% cost-of-living increase at the start of the fiscal year, then implement a restructured step pay plan after completion of a salary survey.
"We have a picture of that in a minute. We also have in this proposed budget a 2.5% cost of living increase across the board," Mr. Hemminger said, adding that the COLA is intended to match local CPI and to be effective at the first pay period after Oct. 1. Hemminger said staff will run the salary survey, adjust the pay plan as required and then implement the completed pay plan early next calendar year.
Hemminger described the proposed pay plan as a "defined step pay plan" in which each job title is placed in a pay grade with progressions that create career ladders for employees. He said the plan would standardize job titles and include predetermined performance-based increases tied to annual reviews.
On retirement benefits, staff included a partial step toward the city’s stated goal of 20-year retirement eligibility and a 6% contribution rate to the Texas Municipal Retirement System (TMRS). Hemminger noted TMRS currently offers contribution options of 5%, 6%, 7%, and 8% and said the budget includes a move away from the 5% level to improve competitiveness in recruitment.
The proposal also includes funding for a salary survey and $25,000 each for implementation of the pay plan, the strategic plan and CIP planning. Staff said they will return to the council with detailed pay-grade assignments and implementation timing after the salary survey results are available.
Ending: No formal council action was taken at the workshop; staff requested direction and said they would present the final pay plan for council approval after the salary-survey results are reviewed.
