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Council weighs 3% COLA plus step increases as staff warn of retention risks and long‑term payroll growth
Summary
City staff proposed a combined pay package — 3% cost‑of‑living adjustment plus step increases for eligible employees — intended to catch up on last year's missed increases and improve retention; council members asked about alternatives (flat supplements) and the long‑term fiscal impact.
City staff presented a compensation proposal that combines a 3% cost‑of‑living adjustment (COLA) with the existing step plan for employees, saying the move is designed to restore competitiveness after prior reductions and recruitment challenges.
The City Manager said the combined approach would "move the whole scale up 3%" and, when combined with step increases for eligible employees, would effectively raise many workers' pay by as much as 6% relative to last year. Staff said a new compensation study is under way to refine market placements for FY2027 and that the FY2026 proposal is intended to prevent further erosion of the city's competitiveness for public‑safety and other positions.
Arguments and concerns: Several council members and a business owner questioned whether repeated percentage increases would compound payroll costs over multiple years and asked whether a flat supplement (for example, a $1,000 uniform payment) might be more equitable for lower‑paid employees. One council member said repeated 6% increases over four years could amount to roughly a 24% payroll growth and asked how the city would justify that to residents. Staff responded that steps are merit‑based and that COLA is a market adjustment to keep base pay competitive with neighboring jurisdictions and private employers.
Public safety and training costs: Police and fire leaders told the council that retention is particularly important for public safety because of training time and the cost of certification. The Police Chief noted recurring contractual costs (body cameras, dispatch systems) and training obligations; the Fire Chief described multi‑year training and equipment costs and said investments in experienced staff reduce complaints and litigation risk.
Next steps: Staff said implementation timing would follow the budget calendar and that the compensation study will provide additional detail for next year. Council members asked staff to return with more precise long‑range projections of payroll growth and retention metrics before final action.
