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AGENDA ITEM REVIEW FORM |
7.D.
Regular City Council Meeting
- Meeting Date:
- 11/12/2025
- Department Head:
- Roula Encinas
- Submitted By:
- Roula Encinas, Director of Finance, Finance Department
Action Requested:
Motion
ITEM:
Discussion and possible action on any and all matters regarding the review of a potential one-time Cost-of-Living Adjustment (COLA) for City employees, as directed by the City Council during the October 22, 2025, meeting. (Roula Encinas, Director of Finance)
SUMMARY:
During the City Council meeting held on October 22, 2025, as part of the Employee Recognition Event presentation, the Council approved a $35,000 budget transfer from the City Council Contingency account to the Human Resources Department. The purpose of this transfer was to provide flexibility for staff to organize the employee recognition event, taking into account vendor quotes and logistical feasibility.
Additionally, as part of the same motion, the Council further instructed staff to evaluate whether this event funding could also be linked to a potential one-time Cost-of-Living Adjustment (COLA) for employees, subject to available budget capacity derived primarily from vacant positions across multiple departments.
In response to this direction, the Finance Department has analyzed three (3) potential one-time COLA scenarios for consideration, to be funded through the previously approved $35,000 transfer and additional savings from salary vacancies. All scenarios are based on gross-to-net estimates and may vary depending on individual employee withholding taxes.
In addition, part-time employees may receive a one-time payment of $500 under Option 1, $300 under Option 2, or $100 under Option 3.
Under each scenario, the total funding would combine:
Additionally, as part of the same motion, the Council further instructed staff to evaluate whether this event funding could also be linked to a potential one-time Cost-of-Living Adjustment (COLA) for employees, subject to available budget capacity derived primarily from vacant positions across multiple departments.
In response to this direction, the Finance Department has analyzed three (3) potential one-time COLA scenarios for consideration, to be funded through the previously approved $35,000 transfer and additional savings from salary vacancies. All scenarios are based on gross-to-net estimates and may vary depending on individual employee withholding taxes.
| Scenario | Gross COLA per FT Employee | Approx. Net Take-Home | Estimated Total City Wide Cost | Budget Transfer Required |
| Option 1 | $1,000 | $800 | $430,000 | $185,000 |
| Option 2 | $800 | $640 | $345,000 | $155,000 |
| Option 3 | $600 | $480 | $260,000 | $120,000 |
In addition, part-time employees may receive a one-time payment of $500 under Option 1, $300 under Option 2, or $100 under Option 3.
Under each scenario, the total funding would combine:
- $35,000 from the Human Resources department (transfer already approved), and
- Remaining balance from salary savings due to vacancies within the current fiscal year.
RECOMMENDATION / SUGGESTED MOTION:
I MOVE TO APPROVE OPTION ______ FOR A ONE-TIME COLA FOR CLASSIFIED AND CONTRACTED EMPLOYEES AS PRESENTED, DIRECT STAFF TO COMPLETE THE NECESSARY BUDGET TRANSFERS FROM THE HUMAN RESOURCES APPROVED BUDGET FOR THE EMPLOYEE RECOGNITION EVENT AND FROM SALARY SAVINGS DUE TO VACANCIES.
Fiscal Impact
- IS THERE FISCAL IMPACT ASSOCIATED WITH THIS ITEM:
- YES
- CITY/STATE/FEDERAL FUNDS:
- YES
- TOTAL:
- The estimated total cost of the one-time COLA ranges from approximately $260,000 to $430,000.
- BUDGETED AMOUNT:
- NO
- AVAILABLE AMOUNT TO TRANSFER:
- YES
- ACCT NAME & GL#/REMAINING BALANCE BEFORE PURCHASE:
- XXX.XXX.50000 & 100-125-80005
FISCAL IMPACT STATEMENT (IF THIS IS A BUDGET TRANSFER, YOU MUST ATTACH THE BUDGET ADJUSTMENT FORM):
This item was not originally included in the Fiscal Year 2026 Budget; however, funding capacity is available through a combination of (1) the Human Resources Department’s approved budget for the Employee Recognition Event, and (2) salary savings resulting from vacant positions across multiple departments.
If City Council approves a one-time COLA adjustment, staff will process the necessary budget transfers from these available sources to the departments requiring funds to cover the COLA and any related payroll adjustments.