For the first time in four years, the City of Morgan Hill’s management staff will receive a salary raise.
The 30 employees will receive a net raise of 2 percent of their current salaries, costing the city about $110,000 annually, according to city administrative services director Kevin Riper, who is among those receiving the raise.
The city council unanimously approved the raises at Wednesday’s meeting.
The management and “confidential” employees have not received a raise since 2008, in an effort to provide a “model” for city hall compensation practices in the face of declining revenues and service cuts brought on by the Great Recession, according to city manager Ed Tewes.
The employees will in fact receive a 5 percent raise, but three-fifths of that amount will be offset by a simultaneous action to require the same employees to pick up more of the costs of their benefits, Riper said. Specifically, the 3-percent “giveback” consists of either reduced health insurance flex benefits or reduced contributions by the city to their retirement benefits.
That’s consistent with the council’s long-term employment strategies, Tewes said.
“In this instance, it is modeling the city council policy in having employees pick up a greater share of their benefits,” Tewes said.
The raise was also necessary to retain employees and compete with surrounding cities and agencies, Riper said. Since 2008, the rate of management and confidential staff leaving their employment with the city for voluntary reasons has grown.
“Recent failed recruitments and a voluntary turnover rate significantly higher than the citywide average could be interpreted as evidence the city is falling below ‘a level sufficient to recruit and retain employees,’” according to a staff report written by Riper.
That turnover rate for the last three years has been about 30 percent, compared to about 10 percent for community service officers, and less than 1 percent for police officers, public works, administrative and community services staff, Riper said.
Since 2008, most city employees have received raises, from 8 to 14 percent depending on which bargaining group they are members of. Police officers have received the largest total pay raises in the last four years.
“This is something that has been needed for a while,” council member Larry Carr said. “It’s something we’ll be looking at a lot more in the future in terms of cost sharing of benefits.”
Employees affected by the raise include the city attorney, chief of police, community services director, city engineer, police captain, program administrator, utilities business manager, budget manager, human resources manager, housing manager and others.