Covington city employees will receive a 4.5 percent cost-of-living adjustment on Jan. 1 under action taken by city council Tuesday night.
Also during Tuesday night’s meeting at city hall, City Manager Krystal Onaitis briefly updated council on plans to revitalize the downtown area, which is also known as Olde Town Covington.
Onaitis said the city is having a hard time attracting and retaining employees because of its wage scale. She said employees are also being negatively impacted by rising inflation.
“We get some good folks, but as soon as we get them in, they are getting an offer from somewhere else for just a little money and it really makes it hard to retain folks,” Onaitis said.
The city manager said the increase will not negatively impact the city’s fiscal budget or its undesignated fund balance. The fund balance has grown by more than $4 million in recent years.
Onaitis, in her remarks to council Tuesday, recommended a 4 percent COLA.
However, Mayor Tom Sibold said he fears the adjustment will necessitate a tax increase in the next fiscal year, which will take effect July 1.
“I just want to make sure everybody understands that this is going to cost money. We just increased taxes and if we increase payroll, we are going to end up increasing taxes again in the next term,” the mayor said.
Onaitis said the tax increase the city imposed in the current fiscal year will not be used to fund the COLA. She said revenue from the tax increase was earmarked for other services.
But Vice Mayor David Crosier said he could support another tax increase if it would benefit city workers.
“I have no problem with increasing taxes to make sure our employees are taken care of,” Crosier said.
Councilman Lance Carson agreed, saying: “The employees of the city of Covington are the heart of the city.”
Carson added that bonuses and other forms of compensation do not help boost employees’ retirement benefits.
Onaitis said the city has 20 employees who make less than $15 per hour. And she noted that the federal minimum wage will rise over a period of years.
Congress is requiring the national minimum wage to be raised to $15 per hour by 2025.
Onaitis said the centerpiece of the downtown revitalization plan, the Gordmans building on Main Street, continues to be a topic of discussion.
The city has dubbed Gordman’s project “Project Sparkle.” The city’s attorney is now in talks with the Alleghany County/Covington Industrial Development Authority on drafting a real estate option.
“Until this document is made public, we are not discussing any of the details,” the city manager said.
The city is evaluating using American Rescue Plan Act funds to hire a Main Street/small business coordinator to spearhead Olde Town revitalization.
“On Main Street, prior to COVID, the number of empty storefronts was much smaller. We had about four. Post-COVID, that has increased,” Onaitis said.
The option on the Gordmans building may be presented to city council in January.
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