Florence council moves to strip 'merit' language, weigh across‑the‑board increases and stipends for staff

Florence — Town Manager Bruce Walls told the Town Council on Nov. 17 that the administration recommends removing language that ties pay increases directly to annual performance evaluations and instead present several replacement options for the council to consider.

Walls said the existing policy (Section 606) creates a "halo effect" in supervisor ratings that makes merit pay unfair in practice and risks damaging morale if the system remains linked to compensation. He proposed decoupling evaluations from pay decisions this year and asked council to consider a one‑time increase or an across‑the‑board percent increase while staff fixes evaluation fidelity.

Council members discussed multiple approaches: a permanent across‑the‑board percentage (staff presented 2%, 3%, and 4% scenarios), one‑time stipends that would not carry into future budgets, and step or tiered increases tied to tenure. Finance staff said a 4% across‑the‑board increase as modeled would cost roughly $640,000 annually once fully annualized; the meeting packet showed a seven‑month partial‑year impact in the current fiscal year.

Members split along fiscal and retention concerns. Several council members (including Vice Mayor Adam and Council member Benzina) urged caution given projected declines in shared revenues tied to nearby incorporations and rising insurance premiums, and suggested 3% as a more sustainable alternative. Others argued a higher increase matters to staff facing rising household costs and that targeted pay adjustments for hard‑to‑fill or specialty public‑safety roles may be warranted.

Staff clarified implementation mechanics: council can limit increases to employees employed a set period (Carl, town finance staff, described models that prorate increases by months employed) and use stipends for overscale employees who cannot receive a higher base. The council discussed whether stipends count toward retirement; staff said stipends generally do not increase police/fire pensionable retirement but can be routed into retirement‑eligible accounts by employee election in some cases.

Council members requested additional data — turnover rates by department, how many employees would qualify under a one‑year eligibility rule, and projected impacts on salary as a percentage of the general fund — and directed staff to return a drafted resolution or pay package on Dec. 4. The council did not take a formal vote on pay at the Nov. 17 work session. The packet for the upcoming meeting will show options and an addendum reflecting council direction.

What happens next: Staff will prepare a revised policy/resolution removing the word "merit" from the advertised personnel policy, include options (percent increases, stipends, eligibility rules, and public‑safety adjustments), and provide the financial impact analysis requested by council for the Dec. 4 meeting.