Based on a generally positive performance review, City Manager Eric Swanson will receive an extra $2,775 annually in his retirement account and his vehicle allowance will be increased from $400 to $500 a month.
Swanson's $145,008 salary will remain the same.
Councilors Karen Blair and Eli Matthews voted against the new contract with the city manager.
"The $400 vehicle allowance — I don't see the need," Matthews said, but added that Swanson has done a "great" job.
Councilor Al Densmore voted for the increases along with the five others.
"Eric has done a fine job in his first year as city manager," he said.
The monthly vehicle allowance covers Swanson for his trips within Jackson County. If he travels outside the county, he would be compensated at a mileage rate set by the IRS.
Instead of giving Swanson a pay increase, the council agreed to increase his retirement compensation package by the equivalent of 1.9 percent of his salary.
Councilors commended Swanson for improving relations with Jackson County, his management style, his community involvement, preparation of a strategic plan and quarterly revenue reports.
Performance areas the council asked Swanson to "work on" included:
In other business, the council approved vote a 1.9 percent wage increase for 110 management, supervisors and other positions, amounting to $250,000 in the biennial budget. Blair and Matthews were again in the minority in the 6-2 vote.
This increase is similar to increases received by other city employees.
Councilor Chris Corcoran said he previously had voted for a two-year wage freeze when the economy was faltering, but he said the time had come to give staff a wage hike.
"An 'atta boy' only goes so far," he said. "It's time for us to reward them because of the freeze we had in the past."
Matthews said he felt the city staff was doing a good job but noted the overall salary increases will add up to nearly $1 million in the budget.
"I know a lot of people in Medford who live paycheck to paycheck," he said.
Reach reporter Damian Mann at 541-776-4476 or firstname.lastname@example.org.