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City budgeting for 3% COLA

Public Works seeks to add position
The Solon City Council and Mayor Steve Stange began work on preparing the 2017-18 budget in cooperation with city staff at a meeting Jan. 4. Council member Steve Duncan (pictured on monitor) participated via digital communication. Council members will be trying to include a 3 percent cost of living adjustment for city employees. (photo by Doug Lindner)

By Doug Lindner
Solon Economist
SOLON– After some lean years, the City of Solon is going to try and make up some lost ground for its employees.
At a Jan. 4 meeting, council members directed City Administrator Cami Rasmussen to include a 3 percent cost of living adjustment (COLA) for city staff in the upcoming fiscal year budget.
In addition, council members and Mayor Steve Stange spoke in favor of an added full-time position requested by Public Works Director Scott Kleppe for his department, and began planning for a future city hall staffer.
It was a meeting dominated by financial reports as the city began its work on the 2017-18 budget, which goes into effect July 1.
Updates on the current budget and the end of the 2015-16 fiscal year were sandwiched by the Parks and Recreation Department’s 2017-18 request and a general overview of numbers impacting planning.
It was during the overview that Stange and council members addressed city wages.
“Typically, this is where council gives me some feedback as to how to calculate the salaries and wages of the budget,” Rasmussen explained to council members.
The U.S. Consumer Price Index (CPI) is at 1.5 percent, while the Midwest CPI is 1.1 percent, she reported. Last year, the city implemented a 1.5 percent COLA and up to 3 percent merit raises when the CIP was zero.
While council member Mark Prentice spoke in favor of 1.5 percent, the discussion quickly trended upward.
“We’re not adjusting it for what really the cost of living is in this town and county,” Stange said, recalling a discussion earlier in the meeting when council members approved a pay hike for Public Works Specialist Kris Richardson.
Council member Shawn Mercer agreed wages should mirror the cost to live in Solon, which is higher than the state as a whole.
Council member Steve Duncan, participating by digital video connection, suggested a 2.5 and then 3 percent increase.
“That’s where my mind was,” Stange said.
“I’m at three,” Mercer added.
Prentice agreed with the idea of keeping quality employees, but noted as a point of reference that most county and state employees were likely getting less.
Stange countered there were several years when the city provided no COLA to its employees.
“A couple of years in a row, we did zero,” he said. “It was tight for a couple of years there.”
“I would be more comfortable with two,” council member Lynn Morris said, citing concerns about the increased cost of health insurance and the potential for adding a new full time employee to the Public Works Department.
During the presentation of the Parks and Recreation Department’s budget request at the beginning of the meeting, Kleppe had explained a move to reclassify wages for activities director Mike Reeve. While the recreation budget only pays for 35 percent of the position, Kleppe said, programming takes up about 80 percent of Reeve’s time.
“Part of my reasoning with trying to shift some of Mike’s salary back into the recreation budget where he’s being expended is to make room for an added staff member in the other budget,” Kleppe said. “I’m trying to add a position.”
The position has not been defined yet, Rasmussen noted, adding that while city hall staff (Rasmussen and City Clerk Susie Siddell) are holding their own, an extra employee is likely in the future there as well.
Once the city’s website is able to accept water payments, she said, it may lessen the traffic at the city office.
“However, just the amount of activity going on in town right now with all the interest in Solon, it’s going to force us to reevaluate the city office staff,” Rasmussen said. “Not in the immediate future, but in the very next near-future following that.”
She acknowledged the money for new employees would have to come from somewhere, and the COLA approved by the council would have an impact on how the city manages the move.
The city’s health insurance premiums are expected to increase 15 percent, Rasmussen said. The city pays the cost of a single individual policy, while the employee makes up the difference for family coverage.
Prentice softened his position, noting he was not opposed to a 3 percent COLA, but would be more comfortable with 2.5 percent. “It’s not make or break,” he added.
Morris said she would recommend 2.5 but would not oppose 3 percent.
“I really want additional staff,” Morris said. “Does this pot of money have any impact on being able to hire that person?”
Prentice asked for a ballpark figure of how much a half of a percentage point would cost the city, but Rasmussen said it was a complex equation.
“I could bring that back at the next meeting,” she said.
Duncan and Mercer held firm to the 3 percent figure.
“That 3 percent is an investment in the folks who work for the city, and that money’s going to be reinvested in the city,” Mercer argued. “Employees that live here also spend their money here.”
“Nicely done,” Morris said, conceding the point. “I’ll go with three.”
With the COLA set, Stange directed the council’s human resources committee to meet with the goal of planning for the expansion in staff.
“I think Scott’s position is more of a no-brainer,” Stange said. “He needs a body to help do the daily stuff.”
The office position will require more long-range thought to define, he said.