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Minnetrista council debates 2026 market adjustment as payroll gains compound
Summary
Council members weighed a staff‑recommended 3% market adjustment for 2026 against proposals to scale back to 2%, citing about $200,000 in annual payroll growth (excluding new hires) and concerns about retaining long‑tenured staff who have reached top steps.
Council members spent the bulk of a Minnetrista City work session debating the city’s non‑union pay plan and how large a market adjustment to include in the 2026 budget.
Jasper Krugal, a city staff member, reviewed the 2022 grade‑and‑step pay plan used for non‑union employees and explained how the council‑adopted market adjustment (commonly called a COLA) shifts every grade and step. “In 2022 when the plan was adopted we were at 103% ... in 2025 we’re at 102%,” Jasper said, describing the city’s position relative to comparable communities.
Council member Kathleen Refkin pressed the long‑term fiscal implications. She said pay increases built into the step schedule and annual market adjustments will add roughly $200,000 per year to payroll without adding staff, and that compounding raises could approach nearly $1 million by 2028 if the pattern continues. “If we do the 3% … it’s compounding,” Refkin said, noting that some long‑tenured employees already exceed market maxima for comparable positions.
Other council members struck a balance between fiscal caution and retention. Peter Vickery agreed the city responded to recent inflation and said the council should avoid pricing itself “out of the market” for new hires. Several council members supported keeping employees competitive for recruitment and retention; one said the city has “a fabulous staff” and urged preserving quality while reassessing step structure.
Council members discussed alternatives to a straight 3% market adjustment: lowering the January market adjustment to 2%, modifying step timing or stretching step increases over more years to reduce compounding, or keeping the 3% for 2026 because it was already budgeted but directing personnel to craft structural changes for long‑term sustainability. The council asked staff to return to the personnel committee with options for addressing wage compression (particularly in police ranks) and for proposals that preserve long‑tenured employees’ pay without unsustainable budget growth.
No final policy vote on the COLA occurred during the work session; council members signaled competing preferences and directed staff to bring detailed scenarios and a personnel‑committee review as the budget moves toward adoption.
