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Apr 14

City Manager's Message April 13: Manager's Recommended Budget and pay raises

Posted on April 14, 2022 at 12:40 PM by Don Mann

My Manager’s Recommended Budget for Fiscal Year 2023 will be released in full on Friday, but earlier today I presented a preview of the highlights to City Council. As is customary, I am writing you to share the key sections that pertain directly to our City team.


At the beginning of the Fiscal Year 2023 budget process, both City Council and I prioritized needs for this year’s budget. Two things — increasing employee compensation and the reduction of property tax rates — rose to the top.


With regard to employee compensation, we are proposing an across-the-board increase that includes consideration of wage compression; increases for targeted, hard-to-fill civilian positions; adjustments to the public safety wage scales; and, a higher minimum wage (from $11 per hour to $13 per hour). We are also keeping health insurance premiums for employees constant and retaining the existing bonus programs (merit and citizen satisfaction survey bonuses).


Specifically, this budget proposes raises of at least 5% for full-time employees who have been with us for at least a year as of July 6, 2022. We have worked closely to try to match increases in salaries for all of Hampton’s public employees — city and schools and to also ensure that increases in other cities do not put Hampton at a disadvantage for hiring and retention.


For our general civilian workforce, pay increases will range from 5%-6% depending on the amount of base salary (6% for those making less than $50,000; 5.5% for those making $50,000-$100,000; and 5% for those making more than $100,000.


The budget recommends sworn public safety employees and 911 operators receive a 7% pay increase. These are areas where we are experiencing higher-than-normal vacancy rates due to the tight labor market. The proposed 7% pay increase is greater than the increase in the City operating budget.


While I would have liked to have given the same wage increase to all of our hardworking employees, we just could not find a way to make that happen. With a 16% increase in home values this year, we knew we had to reduce the property-tax rate. Therefore, we opted to structure higher increases in areas that face specific job market challenges to ensure we can continue to hire and retain qualified employees.


Taken together these compensation investments total $8.5 million. Additionally, we will be undertaking a major compensation study over the next year to re-examine our salary structure and compensation approach. As more cities in our region have begun to examine step systems and/or other new pay models, it is time for us to do the same. We believe the external review will help position us for further enhancements in the coming months and years.


Speaking of real estate tax rate reductions, the budget proposes to lower our tax rate from $1.24 to $1.18, a 6 cent decrease. We have also planned for the elimination of the local grocery sales tax. Governor Youngkin proposed the elimination of sales tax on groceries, but since the state budget is not yet complete, we do not know whether or not the state will make up for the lost revenue. If the State ultimately covers the loss, we will have funding that Council can allocate to other needs and/or additional tax relief. We have also reduced the personal property tax assessments to provide tax relief for residents on June 5 and Dec. 5, 2022.


There are many other exciting changes in the budget, including but not limited to new staffing for several departments and major new capital projects in each of our strategic investment areas. I hope you take the time to review the budget in full once it is released. In the meantime, I want to thank each and every one of you for your contributions to the city’s successes. I hope you will find this year’s compensation proposals — the highest we have offered in over 15 years — to be a strong sign of our commitment to you!

— Mary


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