With the fiscal year ending this month, the San Juan Bautista City Council discussed a salary increase for city employees at a June 3 budget workshop.

Interim City Manager Ed Tewes said staff received an increase of 2% last January and a 3% increase in July 2018. Staff received a 5% increase on July 1, 2017. Tewes recommended to the council that a 3% increase be included in next fiscal year’s budget.

San Juan resident and member of the San Juan Bautista Community Business Association Bob Quaid said the city should evaluate what a 3%, 5% and 10% increase would cost the city.

“Usually everybody gets a cost-of-living once a year so if we skipped a year then maybe we should make up for it,” Quaid said.

Public Works supervisor Nicholas Bryan agreed with the 5% increase and added that a 3% increase could be considered for the next three years.

“We have a really good group of guys I’d hate to lose a couple of key guys. It would be a huge loss for the city,” Bryan said. “We’re getting them trained. We are investing money into them.”

Mayor Cesar Flores said if the city can afford 5% then it should be done. Councilman John Freeman acknowledged that employee retention is a challenge because the city can’t compete with Santa Clara County compensation packages. He asked to be presented with a salary analysis in order to debate an increase between 3% and 5%.

Tewes told the council he was confident the city could afford a 3% increase and thought that it could also afford 5%.

Before making any official budget recommendation, Tewes said he wanted guidance from the council. He also said many of the city’s contractors have multi-year contracts that include cost-of-living increases.

“Our employees are not unionized so the salaries and compensation they receive are a function of what the City Council approves,” Tewes said. “The question is what do you think should be an appropriate, across-the-board increase for city employees?”

At the budget workshop, Tewes acknowledged that the staff was small but committed, and said they should be recognized as such.

City Clerk Laura Cent said the city has 13 employees.

Responding to Freeman, Tewes said all the salaries are low compared to Hollister for the same positions. He also warned the council that the city could not afford what neighboring cities are paying their employees.

The difference between San Juan Bautista and neighboring cities is the labor market, Tewes said.

“It’s not about considering what other cities are doing because it’s the labor market we should be looking at,” Tewes said. “Because our retiring system is so significantly different from what’s available to others, we are not competing for people who are looking for jobs in Gilroy. We’re competing for people who are looking for jobs in the private sector.”

A decision on raising city employee salaries will be made at a future meeting.