As part of West Fargo’s 2027 budget process, we preliminarily set the cost-of-living adjustment (COLA) for city employees at 2.5%. As we move toward finalizing the budget, I anticipate supporting an increase to 3%.
I believe there are several practical reasons for doing so.
First, inflation continues to put pressure on household budgets. Our employees face the same rising costs as everyone else. A cost-of-living adjustment helps ensure their compensation keeps pace with those increases.
Second, we need to remain competitive. Both Fargo and Cass County are planning 3% adjustments. West Fargo competes with these jurisdictions for talented employees, and we need to be mindful of that reality.
Third, retaining good employees is fiscally responsible. Losing an experienced police officer, firefighter, or other city employee comes with significant costs. Recruiting, hiring, training, and getting a replacement up to speed can cost far more than a modest adjustment in compensation. There’s also a cost to losing the experience and institutional knowledge those employees bring to our community.
What About Step Increases?
One argument against a 3% COLA is that most employees will also receive a step increase, resulting in a larger overall compensation adjustment.
I understand that concern, but I believe it’s important to distinguish between the two.
Our current step system was established following a compensation study in 2018. Step increases are designed to recognize progression within an established pay structure. A COLA serves a different purpose: adjusting compensation in response to changes in the cost of living.
These are two separate components of our compensation system, and I believe they should be evaluated separately.
That doesn’t mean our overall compensation structure shouldn’t be reviewed. In fact, after eight years, I think it’s reasonable for us to evaluate changes, but as I’ve said since the election, that needs to be completed on a timeline for next year’s budget process. Making changes to that structure deserves a thoughtful, comprehensive review, not a quick adjustment during the final stages of the budget process.
Balancing Fiscal Responsibility and Employee Retention
I’ve consistently emphasized the importance of fiscal responsibility and sustainable city budgets. That hasn’t changed.
But fiscal responsibility isn’t simply about spending less. It’s about making decisions that deliver the best long-term value for taxpayers.
We ask a lot of our city employees. They keep our neighborhoods safe, maintain our infrastructure, respond to emergencies, and deliver the services residents depend on every day.
We need to compensate them fairly while continuing to carefully manage taxpayer dollars.
For those reasons, I expect to support moving the 2027 COLA from 2.5% to 3%, while also supporting a more comprehensive review of our compensation system in the future.