Many city staffers are beginning to see a bump in their paychecks — something most have not seen in quite some time.
During the Sedona City Council meeting April 27, council approved a 4% increase in salaries as a way, in essence, to make up for lost time.
“The pandemic had just begun and no one knew what that meant in term of our revenues for Fiscal Year 2021,” City Manager Karen Osburn said, referencing to this time last year. “Out of an abundance of caution, the city was anticipating and planning for a $10 million deficit.”
When the budget was finalized last June, all staff pay increases and hiring of vacancies were frozen unless those hirings were deemed critical.
“As we all know now, we did experience the $10-million deficit,” Osburn said. “In fact, if we look at our revenues for sales and bed tax through February — or the first eight months of the fiscal year, all of which was during the pandemic — we had the strongest and highest collection of sales and bed taxes in the city’s history.”
For the last few years the city has been on a merit-based system when it comes to raises.
This was done to reward the highest performing employees with higher increases than under the prior methodology. But in light of the unusual circumstances this past year, and her desire to provide employees with a cost-of-living increase, Osburn requested that each employee be given a 2.8% raises beginning the first pay period of May. But due to circumstances, the lack of any raises and a way to say thank you to staff, council selected to go with a 4% pay bump.
“I think our staff needs to be definitely rewarded and it seems to me that under normal conditions they would have seen a 4 to 4.5% increase on average,” Councilman Jon Thompson said. “We didn’t have normal conditions, we had better-than-normal conditions.”
After the meeting, Osburn said the 4% will be retroactive to July 1, 2020 but that does not mean all employees will have their salaries adjusted going back to that date.
“Our normal raises coincide with our employees’ anniversaries of their hire dates/annual performance evaluations,” she said. “So those anniversaries will occur throughout the year depending on when they were hired, and the retroactive adjustments will be made only to the date they would have otherwise been reviewed and eligible for a merit adjustment during a normal year.”
She added that those increases will become part of their salaries moving forward so they will continue as long as the employee is with the city and in good standing and won’t terminate at the end of this fiscal year nor June 30, 2022.
The total annual cost of the 4% applied to everyone is $425,000 for Fiscal Year 2021-22. For the current fiscal year, that amount is around $200,000.
The point of the raises is actually twofold. Aside from playing catch-up during the pandemic, Osburn said it’s a way to help reduce a growing trend. Since July 2020, the city has lost 20 employees out of approximately 140 full-time equivalents and continues to struggle with recruitment efforts in all positions.
The current projection for employee turnover for Fiscal Year 2021 is 16% to 17%. These figures do not include retirements or terminations. For comparison, Osburn said the International City Manager’s Association benchmark for turnover for 2016-2018 was 6.8% for all cities and 7.5% for cities under 30,000 population. “That’s really significant,” she said of the turnover rate.
In Fiscal Year 2017, the city lost 15.5% of its staff but those numbers declined to just 5.1% the following year but then increased to 9.5% and 10.9% the two years prior to this one.
“Anecdotally we’ve had a number of positions that we’re struggling, recently, to fill that remain vacant,” Osburn said.
