Bozeman City Hall

Bozeman City Hall on Rouse Avenue in 2017.

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Most city of Bozeman employees will see a raise under the city’s proposed budget.

The budget under review by city commissioners includes wage increases, though city spokesperson Melody Mileur said the increase may be tied to union contracts for some of the city’s 477 employees. The proposed budget also includes an increased contribution from the city to employees’ health care plans.

The city is hoping it will become a more competitive employer as it is hit with similar workforce challenges facing other industries.

“We’re having a tough time keeping employees and actually an even tougher time recruiting employees,” City Manager Jeff Mihelich said during a city commission meeting this week. “I call this the year of taking care of our own, because we are losing people.”

In total, the personnel costs in the proposed budget, including wage and benefits costs, is more than $3 million higher than last year, a 7.5% increase.

The city is making an additional 5% contribution to employees’ health insurance over last year, Mileur said, which results in a $210,000 estimated increase in health benefit costs.

Personnel costs account for $44 million in spending, which is 29% of the proposed budget.

The proposed budget also includes additional full-time employees including several for the Public Safety Center, positions scheduled to start sometime in 2022.

Besides wage and benefits increases, Mileur said other factors leading to the increase are added positions or new staff that may be more or less qualified than the people who previously held the job, which puts them at a different wage on the city’s pay scale.

The city is working with market data on wages from 20 other cities in the region. Mileur said the data compared job duties and authorities and other factors to determine an average wage for a given position, which the city is using as the market wage.

The city’s wage system puts positions with similar skill sets, authority and responsibility into the same pay group, Mileur said.

There isn’t a standard increase for employees, Mileur said, as some “needed greater increases than others for the City to remain competitive for the position.”

The city is bargaining with unions in some cases. Mileur said the compensation study resulted in an average wage increase of more than 8% for those in teamster jobs, which includes parks and cemetery workers.

The city plans to have the wage reviews done in the next year.

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Nora Shelly can be reached at nshelly@dailychronicle.com or 406-582-2607.

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