St. Cloud mayor plans for city's first raises in four years

City employees could get their first cost-of-living raise in four years. If the mayor's proposed budget passes in December, St. Cloud employees could see raises of 2 percent in January and another 2 percent in July.

Other central Minnesota cities also propose employee raises while cities around the region expect more financial stability in upcoming years.

Gay Wakeman works in the city of St. Cloud's Finance Department performing various office duties, such as helping out with payroll and ordering office supplies. She hasn't received a cost-of-living adjustment since 2008. Yet, Wakeman said, her work responsibilities have expanded since a co-worker's retirement earlier this year.

"I would guess 65 percent of her work came my way. You're supposed to get it done without overtime. And it's not possible to get that much more work done," Wakeman said. "It's not like I wasn't already working."

She said the proposed raise will help, but it isn't the same as if she had been getting regular raises.

"It's difficult to pay for the fuel oil, pay for the taxes, just about impossible to save any money," Wakeman said.

According to state employment data, 31,200 government jobs were lost in Minnesota during the recession.

St. Cloud Mayor Dave Kleis said attrition has reduced city staff by at least 50 employees since 2008, when it instituted a hiring freeze. Raises have been limited to so-called "step increases" based on years of service. Recently, some of the city's bargaining units negotiated for a 1 percent raise, effective July 2012. But for the most part, Kleis said, it has been four years since city employees saw their last cost-of-living raise.

"Service demands actually have increased. We're a growing population... so we've asked our folks to do more with less," Kleis said. "I felt, based on the negotiation that we did going into 2013, that having a cost-of-living increase would make sense."

Kleis' proposed budget for next year is $69.9 million, down from $71.9 million this year. He said the city's levy remains the same in next year's budget. The raises will be paid for from the savings of not hiring new workers and through reserves, he said.

"The recession has hit everyone and as a city we've been very cognizant that the costs we've had to absorb we didn't pass onto property-tax payers, but instead we were able to do things differently," Kleis said.

The proposed raises come as the city expects property values to level out next year and begin increasing in 2014.

Louis Johnston, an economist at the College of St. Benedict and St. John's University, said the raises are a sign the region's economy is at least stabilized and could get better.

"The other thing is if you're going to compete with other cities for people to do economic development, to be police officers and be firefighters, you have to offer competitive wages," Johnston said. "And if say, Rochester or another metro area is doing better than St. Cloud, we're going to be losing people to them unless we have competitive wages."

While there's concern over keeping up the quality of the city's labor force, Johnston said, what St. Cloud offers in terms of proposed raises is competitive right now, even though it is really just covering inflation.

"If you look at wages across most cities, no one is getting big raises, Johnston said. No one's getting 5 percent per year or anything like that. So a 2 percent [raise] in January and a 2 percent in July should be fairly competitive."

Other cities in central Minnesota are also proposing salary increases for employees, such as Avon, Benson and Sartell. The city of Cold Spring is in the last year of a three-year contract that will give employees a 2 percent raise next year.

The city of Becker proposes a 1.5 percent cost-of-living raise for employees in next year's budget, their first since 2009.

Like in St. Cloud, the city of Becker has not replaced employees who have left, said Corey Boyer, Becker city treasurer. .

"From a financial standpoint, we're probably a little better off," Boyer said. "But again, things are just kind of holding steady as far as overall levy, overall revenues."

While the return of raises may mark modest signs of fiscal stability for some cities, many local governments are waiting for property values to turn around before heralding an economic recovery.

Truth in Taxation hearings are for the most part scheduled throughout the state in December.

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