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Council keeps merit-based pay and asks staff for new in-house wage study
Summary
Council declined to adopt an automatic annual COLA and requested staff perform another in-house wage and compensation study for FY2027 after staff said external study cost estimates ranged from $11,000 to $60,000.
Council and staff discussed employee compensation policy and whether the city should move from a merit-based increase to an automatic cost-of-living adjustment. Staff noted the current practice provides a 3% annual merit increase for employees who meet performance expectations, while the Employment Cost Index (ECI) for state and local government recently ranged between 3.3% and 5.1%, producing a variable gap between merit increases and measured labor-cost changes.
Staff told the council they had requested external cost estimates for a compensation study from eight other municipalities; the estimates ranged from $11,000 to $60,000. Council members indicated they were not in favor of an automatic annual COLA and asked staff to perform another in-house wage and compensation study in time for FY2027 budget adoption.
Why it matters: compensation policy affects labor costs across the general fund and can influence staff recruitment and retention. Council’s direction means staff will produce updated internal analysis rather than immediately commissioning an external study.
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