Commission Meeting Minutes

Discussion regarding pay increases for non-union Town employees

Commissioner Hannan asked Town Manager Lawrence if he knows of any employees who have complained about their salaries. The Town Manager said there have been complaints but not from department heads.

Mayor Rietz recalled the meeting when the minimum wage was raised to $15 per hour and those who earned close to that amount were also given increases. He mistakenly thought that was considered compression. The current issue has to do with new employees with the same skill set being hired at a similar salary to those who have been employed with the Town for many years.

Commissioner Kussard said she agonized over this issue adding that the Town has excellent employees, and they all need to be treated fairly. Previously, raises totaling 5% were agreed upon by the Commission but she thinks that adding a 2% merit raise, increasing the total possible increase to 7%, is appropriate. Commissioner Kussard discussed the matter with Finance Director Winegardner who assured her that the budget could accommodate the increase. She also compared union employees to non-union employees to explain the differences in wages; in the past, non-union employees received the same percentage increase as the union employees.

Commissioner Holden said as far as step raises go, he does not see any need for them after a few years of employment because increases should be based on skill level not longevity. There should be equal pay for the same job category regardless of tenure. He added that he worked in both union and non-union positions.

Commissioner Freeman gave an example of a dump truck driver who makes $30 per hour. If a new driver comes in with the same experience, he should also receive $30 per hour. If an employee does not like that scenario, it is the employee’s fault, not the employer’s.

Town Manager Lawrence said that the amount previously budgeted for raises was 5% but with inflation expected to rise above 9%, the Commission decided to revisit the issue. The discussion should be whether the increase will stay at 5% or whether inflation should be factored in.

Commissioner Hannan asked if salaries will be reduced when inflation comes down. He said the issue should be discussed every year. The Town Manager said that will be discussed during next year’s budget workshops.

Finance Director Winegardner said she does not want to punish an employee for longevity. If an employee has been doing a good job for many years, that person might be insulted by a new employee earning the same wage. New employees are unknowns; you do not know how they are going to perform.

Mayor Rietz asked if there are department heads earning close to or less than new hires in their department. She answered in the affirmative noting one case in particular.

The Finance Director said employees have always started at the bottom of the range but there were some department heads that were kept at a low salary.

Commissioner Freeman stated that the Commission just voted on a balanced budget. Would the additional 2% unbalance it? The answer was that it would not and that no expenses would need to be cut either. There is $1.5 million left over in the General Fund and another $200,000-$300,000 left over in the water and sewer Enterprise Fund; that money is available for discretionary spending by the Commission. Ad-valorem revenue does not need to be touched.

Mayor Rietz said they are addressing FY 2022/23 raises but if there are other inequities, those should also be addressed.

Commissioner Holden commented that if one employee has been on the job for five years and another employee has been on the same job for 20 years, the one who has been there for twenty years is not being punished.

Mayor Rietz said department heads should be making a certain percentage more than those who report to them. Town Manager Lawrence said those pay differentials will be taken care of when the budget is passed.

Commissioner Freeman said he is in favor the 5% raise plus the 2% merit increase suggested by Commissioner Kussard. Commissioner Holden was also in favor of the plan.

Commissioner Hannan said he is in favor of the plan as long as the merit increase of 2% does not carry over every year. He does not want the 2% to be compounded. Commissioner Holden agreed.

The Finance Director said raises have always been compounded and the following years’ raises are determined by that compounded amount. There was an exception one year when a bonus was given to employees. She then asked if the percentage increase would also be given to the Commissioners and the Town Manager’s salaries (there was no answer to that question).

Commissioners Hannan and Holden agreed that merit increases should not be compounded. They would like the merit increase removed and replaced by a bonus that is for FY 2022-23 only and not include the 2% in next year’s budget. The bonus would be for this year only. Commissioner Kussard said if an employee does not do well, that person would get neither a merit increase nor a bonus. Mayor Rietz added that the 2% increase should not be given if an employee is underperforming. Commissioner Freeman did not see compounding being an issue.

Town Manager Lawrence said he has been in government for 35 years and has never known a government employee to get a bonus. Computing bonuses then removing them for the following year would be a nightmare for payroll. He is not in favor of calling the merit increase a bonus. Giving an employee an increase and then taking it away is something he has never seen before.

Mayor Rietz said he is in favor of the 5% raise and the 2% performance raise totaling 7%.

Commissioner Holden said the Commission is right back where they started. He still likes the idea of a bonus so that it is not added to the total salary and compounded annually.

Commissioner Freeman said this will be addressed again next year and following years and they can make the decisions regarding future increases at that time.

The consensus was for the employees to receive a 5% raise and a 2% merit raise.