City manager, HR back hybrid compensation plan to give all staff raises and target market gaps

Emily Proancece, director of human resources, presented four scenarios for allocating $3 million toward employee compensation in FY2026–27 and recommended a hybrid option that combines an immediate modest across-the-board increase with reserved funds for targeted market corrections.

What staff proposed: the recommended plan would give a 2.5% increase to all full-time permanent employees effective in July and reserve roughly three-quarters of a million dollars to address the most significant pay disparities after an early-FY27 salary survey. HR also recommended increasing pay-grade minimums and maximums by 1.5% to maintain classification structure.

Why staff favor it: Proancece and city management said the hybrid preserves a guaranteed raise for every eligible employee while retaining data-driven discretion to address hard-to-fill roles and compression issues. "We would recommend scenario four," staff said, arguing it is "the best of both worlds" because it gives every staff member a raise and sets aside funds for market-based fixes.

Council questions and context: councilors sought more detail on how many employees would remain below the living wage under each scenario and the distribution of impacts between full-time and temporary staff. Staff said scenario one (3.3% across-the-board) would reduce the number of employees below an internally cited living-wage threshold by about eight people, while the flat-dollar scenario two could reduce that number by closer to 100.

Next steps: staff will return with calculations showing how many employees would reach the living-wage threshold under different options and with the tax-impact context needed for council policy decisions.