The Roxboro City Council was presented the findings of a pay and job classification study Tuesday night which, if implemented, will cost a little more than $800,000.
David Hill, a management analyst with the Piedmont Triad Regional Council, presented the findings to the council Tuesday.
Hill’s presentation was informational and council did not take action on the findings.
Hill said his study began with identifying the surrounding market competitors, interviewing city employees and department heads, reviewing the city’s organizational structure and having employees complete a 12-page position description questionnaire.
Hill said he defines a mature workforce as an average employee experience between eight and 10 years.
If there is a mature workforce, Hill said all measurables should fall under a bell curve in which two-thirds of employees fall in the middle third of the curve.
Hill said the city’s average years of service is 12.6 years.
Statewide, Hill said he normally sees local governments’ average employees’ service time between six and eight years.
“You have an above average years of service,” Hill said.
However, Hill said the city’s average is higher because it has a “considerable number” of long-serving employees, with the earliest hire date of 1980.
Offsetting that is the fact that one-third of the city’s employees were hired less than five years ago and just less than two-thirds were hired less than a decade ago.
When looking at employee salaries as a percentage above their position’s minimum, Hill said the city’s average is 11.75 percent above the position minimum.
Hill said there is some concern about the salary compression of employees making less than 10 percent above their position’s minimum salary, but there is a well-established distribution for the rest of the employees.
Hill said the “significant number of employees” recently hired explains the compression at or near minimum salaries.
“That’s something that time will take care of,” Hill said.
Using a police officer and fire engineer as examples, Hill said the city’s range between minimum and maximum salaries is lower than surrounding municipalities.
Hill added that the city’s starting salaries for the two positions are also lower than the city’s competitors.
Hill also said his recommendations would account for a conservative three percent increase to the competitors’ salaries.
“I don’t want to give a recommendation to you to place this particular classification in a certain grade based on where everybody currently is – good for you, that catches you up,” Hill said. “What I’m going to give to you tonight are recommendations for salary grade assignments that will put you where I think everybody else will be at the beginning of the next fiscal year.”
Hill’s recommendations included a new pay grade schedule.
The proposed new pay grades would include a flat 45-percent range from minimum to maximum salary, meaning the maximum salary is 45-percent higher than the minimum.
Using Hill’s examples, the police officer and fire engineer positions’ ranges are currently 38.68 percent.
“This is something that happens to pay plans over a number of years when you implement cost of living adjustments – it just depends on how the software rounds up and down,” Hill said. “You may have started off with an exact amount, but year after year it rounds up or rounds down differently so you end up with inconsistent differentials between the grades and inconsistent ranges from minimum to maximum.”
The proposed pay plan would also reset the differentials between grades to five percent.
“This takes your current pay plan and just smooths it out,” Hill said. “It gets rid of all the inconsistencies and establishes a consistent range and consistent differentials from one grade to the next.”
Hill said his recommendations would focus on maintaining the bell curve within the city workforce.
Those recommendations are to assign each city position’s minimum pay grade to the market rate and set each employee’s salary to the same percentage above the minimum as they currently have in order to maintain the distribution.
As some positions are recommended to move up several pay grades, Hill said he is also advising the city to limit the maximum salary adjustment to $7,500 which would impact the employees at the highest levels.
If all of the recommendations were implemented in a single fiscal year, the total cost would be $809,344.
Of that, $647,475 would be purely salary adjustments.
The other $161,869 would be payroll-associated costs like FICA and 401k contributions.
The increase per employee is estimated to be approximately $6,800.
If spread over several years, Hill said the cost usually increases as he factors in a cost of living adjustment between each year.
If implemented over two years, the cost would be $825,638.
If implemented over three years, the cost would be $817,437.
Asked about the downside of spreading the cost out, Hill said a one-year implementation will get done. He said for two-year implementations, the second year gets done most of the time.
For three-year implementations, the first year gets done, the second year almost always gets done and the third year “hardly ever” gets done.
City Manager Brooks Lockhart emphasized the importance of the study.
“This is going to be the biggest challenge in our budget this year,” Lockhart said.
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