Council asks staff for cost analysis after confusion over 3% raises for new hires

Councilors pressed staff about how the city implemented the pay changes approved in last year's budget and how those choices affected employees hired after the payroll cutoff.

During questions following the audit presentation, Council Member (Speaker 6) said the council understood a 3% increase applied to staff who were on payroll at a late-June cutoff, but the pay-grade ranges were not adjusted. "So what it means for our staff is we're less likely to keep them around," the council member said, noting recruits in the fire department and other new hires could be paid below the living-wage aims discussed in recent budget cycles.

Tony McDowell, finance director, and Assistant City Manager Jay Dundas explained that the increases were applied to employees on payroll as of the cutoff; the city did not change pay grades this year. Dundas said staff can analyze how many hires this affects and provide cost estimates for targeted adjustments. "We can certainly go back and provide you all with some numbers," Dundas said, offering scenarios for limiting adjustments (for example, only to new fire recruits) or extending them citywide.

Councilors asked whether adjusting pay for hires since the cutoff would require a mid-year budget amendment and staff confirmed any funded change would need to be reflected in the budget. McDowell cautioned that fund balance constraints — the city ended fiscal 2025 at 14% unassigned — mean that new obligations would require identifying offsets or one-time sources. Staff agreed to return with a breakdown of affected positions, fiscal impacts for limited and broad scenarios, and recommended next steps during the upcoming budget work sessions.

The council did not make an immediate decision; members said the analysis will inform the January budget discussions and any potential mid-year action.