2025.12.15 CC Packet - Laserfiche WebLink

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14669 Fitzgerald Avenue North, Hugo, MN 55038 • (651) 762-6300 • www.ci.hugo.mn.us TO: Honorable Mayor Tom Weidt and Members of the City Council FROM: Bryan Bear, City Administrator SUBJECT: 2026 Salary Resolution DATE: For the City Council Meeting of December 15, 2025 DESIRED COUNCIL ACTION Adoption of Resolution Setting 2026 Salaries and Employee Reimbursement Levels CITY COUNCIL DIRECTION At the September 15, 2025 Mid-Year Budget Review Workshop, the Finance Department suggested that the City’s salary matrix be adjusted by 4.44% and that employees who had not yet reached their paygrade maximums be granted step increases. After comparing our salary matrix to those of other comparable metro cities, staff found that our salaries were below average. As a result, staff recommended a 3% cost-of-living increase, along with a 1% market adjustment to the matrix, to bring our salary structure more in line with the comparable cities. Staff also recommended adjusting the matrix by 0.44% to help employees absorb the mandated Minnesota Paid Leave premiums. During the 2026 budget process the City Council indicated their willingness to include these adjustments in the 2026 budget. Council approved the 2026 budget containing these adjustments at their December 1, 2025 Council Meeting. After consulting with Department Heads, and with the assistance of the Finance Department, the City Administrator hereby submits the attached salary resolution for City Council consideration. SALARY ADJUSTMENTS The proposed resolution incorporates the Council’s previous actions and direction to staff as stated above. Ten (10) of the City’s twenty-seven (27) full-time employees will receive step increases. The overall net aggregate dollar increase due to the 4.44% adjustment, including step increases, equals $154,708, of which $130,710 is contained in the general fund budget. The remainder is included in the water and sewer operating fund. The overall budget for employee wages will increase by 5.4%. It is worth noting that the Community Development Assistant position is currently vacant and therefore, this position appears on the salary resolution at the corresponding pay grade minimum. FIRE DEPARTMENT OFFICER SALARIES The Fire Chief requested that Captain and Engineer salaries be increased to from $3,481 to $5,662, and that Lieutenant salaries be increased from $2,821 to $4,144. Due to the size of these adjustments, staff recommended implementing the increases over a two-year period. The 2026 salary matrix sets Captain and Engineer salaries at $4,572, and Lieutenant salaries at $3,483. FIRE DEPARTMENT RETENTION PLAN Twelve years ago, the Fire Department implemented a retention program designed to provide an incentive for firefighters to remain in the department for at least ten years. This program increased the hourly rate of pay by $0.50 for each firefighter that completed at least 5 years of service. The hourly rate of pay for those that qualified would increase an additional $0.50 per hour, each year, until years of service reached ten. The program has been successful and in 2023 the Fire Chief has asked that the hourly rate of pay for those who qualify be increased by an additional $0.50 per hour. The salary resolution contains a provision whereby firefighters who have completed at least 5 years of