02. Cost of living adjustment recommendation for 2023 budget

M E M O TO: County Commissioners FROM: Robert W. Wilson DATE: June 1, 2022 SUBJECT: Department Head COLA Recommendation On Wednesday, May 25th County Department Heads recommended a Cost- of-Living Adjustment (COLA) of 8.5% for County employees in 2023. In arriving at this recommendation Department Heads utilized the long-standing practice of adopting a recommendation equal to the April-to-April Consumer Price Index (CPI) figure for upper Midwest cities with populations of 500,000 or less. This CPI is not typical and places substantial pressures on the economy both nationally and in our local workforce. There was serious discussion about whether to remain consistent with past practice and recommend the CPI figure or to make an alternative recommendation. After thoughtful consideration Department Heads voted unanimously to remain consistent and recommend the CPI figure. Several points were raised during that discussion: • The process of Department Heads using the localized CPI figure as a COLA recommendation has been used consistently for budgeting purposes for nearly 20 years. The one exception (applied on several occasions) is when the April to April CPI figure is negative. In those cases, Department Heads have recommended and the Commission adopted a 0% COLA increase. • The County made a significant investment in 2021 to be more competitive in the local labor market. This was needed so the County can continue to recruit and retain a high-quality workforce. Adopting the CPI does not advance the County’s position in the labor market, it simply maintains our position. Commission • The current labor market is extremely tight and as an organization that employs nearly 500 fulltime employees, we must remain competitive. Several Department Heads have said last year’s COLA action by the Commission allowed them to remain competitive in recruitment and hiring talented employees. At the meeting on June 6th the Commission should take action to identify a COLA percentage the Finance Office will use in preparing budget information. The COLA percentage can, at Commission direction, be updated at later points in the budgeting process. SUGGESTED MOTION: Move to adopt an 8.5% COLA for use in developing the 2023 Cass County Budget. County Administrator Robert W. Wilson 701-241-5770 wilsonro@casscountynd.gov PO Box 2806 211 Ninth Street South Fargo, North Dakota 58108 www.casscountynd.gov