Ninety-three city employees of San Luis Obispo have received a one-time, lump-sum raise of $2,000 each to help cover rising health care costs from this past January through June 2018. The bonus was approved Tuesday by the City Council.
The compensation increases total $186,000.
The bonus was designed to make up for an inequity with city contributions to health care costs. The city provided a similar percentage increase to employees represented by the San Luis Obispo City Employees Association.
Nickole Sutter, a human resources analyst, wrote in a staff report that the employees affected are two appointed officials, nine department heads and 82 other management employees. They include supervisors, senior planners, engineers, analysts and other professionals who are not represented by a union.
The council opted to approve a one-time pay increase instead of permanent salary increases that would increase pension costs.
The increases were approved as the city faces upcoming cost-cutting challenges.
In February, the city announced that it’s facing sharply rising pension costs and lower-than-anticipated tax revenues, projecting a budget shortfall of more than $5 million by the 2021-22 fiscal year if no changes are made in current spending patterns.
In the short term, the council opted to limit hiring to personnel deemed essential to its operations, restrict travel and/or defer discretionary training. The city also has been tasked with reviewing capital improvement projects and other one-time projects that can be deferred or dropped. The city didn’t plan any immediate cuts to department spending or staffing.