Glenwood considers home loans for city employees
Glenwood Springs Correspondent
Vail CO, Colorado
GLENWOOD SPRINGS ” The City of Glenwood Springs is looking at offering home loans and raises to better recruit and retain employees.
Considering those possibilities show the city struggles with the labor market problems that can choke employers in the area in part because of the housing market.
“Recruiting and retaining employees is a big issue, as it is for literally every employer in the valley,” said City Manager Jeff Hecksel,. “We’ve flat out had people deny jobs after they were offered” once applicants became aware of the tight housing market.
If approved in the future, a draft Employee Home Ownership Program would provide a secured, subordinate loan to help eligible employees purchase a first home.
Employees would have to qualify for primary mortgage financing through a reputable lending institution, and subprime, interest-only, negative amortizing, balloon and short-term adjustable rate mortgages wouldn’t be allowed, according to the proposal
“The idea is to help people get into homes,” Hecksel said. “We would basically provide more or less a down payment assistance program for up to about $40,000.”
Hecksel said the Glenwood City Council indicated it wanted to change the interest rate on the loan repayment terms to reflect what the city would earn if the money was in one of the typical investments the city makes. The draft had proposed an interest rate equal to the prime rate as published in the Wall Street Journal plus 1 percent.
The draft also says up to 40 percent of the original principle balance of the loan may be forgiven by the city for homes purchased inside the city limits, if the employee complies with all the requirements for eligibility. That would take place in annual steps, with 40 percent forgiveness possible five years after the loan.
Loans for homes weren’t the only method considered to entice employees.
The city’s human resource department recommended $523,027 in salary and benefit increases. The recommendation was based on data from 14 cities in a Colorado Municipal League survey including cities with similar populations and costs of living.
“The salary survey data indicates that the marketplace has indeed driven up salaries among our competitor cities in Colorado,” human resources director John Angell wrote in a report. “We are recommending salary increases for all full-time employees based on our survey benchmarking, which averages a per-employee increase of 5.88 percent.”
Glenwood Springs Police Chief Terry Wilson told the City Council the proposed increase would certainly help a lot, but wouldn’t give his department a competitive edge.
“We’re basing next year’s salaries on this year’s middle of the road,” he said.
He’s said he’s seen during recruiting trips and job fairs that competitor cities like Vail advertise season ski passes for employees with giant pictures of ski areas and golf courses. That’s tough to beat.