City of Middletown considers employee raises to improve recruitment, retention

City Manager Paul Lolli said a 5% raise is “a step in the right direction.”

City Council heard the ordinance at Tuesday’s meeting and will vote on the emergency legislation at its next meeting Aug. 16.

The total additional cost of the implementation of this change to the city that has 350 employees is about $700,000 annually, according to city documents.

Middletown has seen a drastic increase in the number of employees who have retired or resigned and accepted similar positions in other cities that offer between $5,000 to $20,000 more a year, according to Lolli. During exit interviews, he said, employees have said salary was “a primary reason” for their departure.

The city has seen 74 resignations the last two years: 20 in 2020, 32 in 2021 and 22 as June of this year, according to documents. About 10 senior staff members have left the city this year for various reasons.

“We have to stop the hemorrhaging,” said Lolli, who called the number of resignations “alarming levels.”

Also, it should be noted that during the last three years, Middletown has had three city managers (Doug Adkins, who was fired; Jim Palenick, who signed a separation agreement; and Lolli) and four of the five council members are in their first term.

The city hopes to complete a compensation and benefit study early next year, according to Lolli.

He said the city is in “a better financial position” to compete for employees with neighboring cities.

Recruitment of new employees has been a struggle and comes with a high price tag, he said. Costs associated with hiring a new employee include advertisement, testing costs, background checks, drug screens, psychological evaluations, training, and uniforms, according to the city.

Lolli said 200 people used to apply for openings in the police and fire departments and public works and that number has dropped to 15 to 20.

“We owe our employees this,” council member Rodney Muterspaw said of the raises. “We are training other peoples’ employees.” He called that practice “a horrible business model.”

Lolli added: “It used to be the other way around.”

The city will consider increasing the wages of union members through collective bargaining in the coming weeks, Lolli said.

Earlier this year, every non-union city of Middletown employee received a one-time lump payment of premium pay between $1,000 to $3,000 using some of the city’s American Rescue Plan Act funds.

The cost of the payment was about $386,928, according to city documents.