(This article has been edited for accuracy.)

SALISBURY — The Salisbury City Council agreed to an increase from 4 to 5 percent in 401(k) contributions for all full-time employees during its Nov. 21 meeting. The council also approved an additional lump-sum bonus for both full-time and part-time city employees hired before July 1.

Several years ago, the Salisbury Fire Department chose not to be involved with the city’s social security plan, but they recently asked council to be a part of it again. Council went ahead and set aside $335,000 to fund their social security for the 2024 budget if the fire department voted to proceed. On Aug. 31, the fire department decided not to. It was then up to council to decide whether to put the money into fund balance or reallocate it.

As of now, Salisbury contributes 4 percent to employee 401(k)s except for sworn police officers who already get 5 percent. Sworn police officers will not be getting an increase in contributions, but all other full-time employees, including the fire department, will be. 

Unlike social security, city employees do not have to match their 401(k) contributions to receive the funds. The reason for this increase is to retain and attract employees as well as provide equity among city staff. Other nearby municipalities already supply 5 percent to their employees’ 401(k) plans. 

“That’s becoming more common for cities and becoming a competitive issue for (Salisbury),” City Manager Jim Greene said. “That will help us from a fairness standpoint within the organization.”

The 401(k) increase will cost almost $216,000. Finance Director Wade Furches said that stormwater and Salisbury-Rowan Utilities have enough funds to absorb some of the costs, totaling just under $57,000. The $335,000 will cover only the general fund and transit portion of the increase. However, Furches advised transit’s budget “is a little tighter,” so $5,744 from the general fund will be transferred to transit to assist them with the additional costs. 

Greene said that this will be a recurring cost for Salisbury going forward. The increase is going to be effective Jan. 12, 2024, which is the first payroll date of the new year.

The remaining $335,000 will be for a one-time, lump-sum 1 percent bonus for employees hired before July 1 of this year. Besides full-time employees, part-time employees who “meet eligibility requirements and receive a minimum bonus pay of $60” are eligible for the bonus, too. There is already a separate bonus distributed on Dec. 1, but that one is going to be given on June 14, 2024.

The bonus will cost just over $222,000. Similar to the 401(k) increase, the $335,000 will go towards the general fund and transit, with stormwater and Salisbury-Rowan Utilities taking on a fragment of the costs. $6,238 is going to be transferred from the general fund to transit. This payment will not be recurring. The bonus was recommended for this fiscal year in order for funds to be available in 2025.