Lebanon city employees may have a pay raise coming down the pipe this year, but just how large an increase remains to be seen.
The Lebanon City Council is currently evaluating a pay increase between 1.5% and 3% for full-time, part-time and seasonal employees.
As the budget workshops get underway, the city’s councilors are meeting with department heads to identify the most pressing issues facing Lebanon and how to address those with budgetary allocations.
Head of Human Resources Sylvia Reichle presented findings from the city’s latest pay study recommending to the council that raises be distributed basically evenly across the city at a rate of 3%, except for police officers and dispatch personnel who got raises in October.
Reichle said that dispatchers were paid less those in comparable communities, so the city opted to bring up those wages up by an average of 7.7%. Police officers’ wages were increased by an average of 1.6%.
In the previous fiscal year, Lebanon gave no cost of living raise. Although, the year before a 2% increase was implemented and in 2017 a 1.5% increase was implemented.
Reichle pointed to Lebanon’s population growth and current unemployment numbers.
”With an unemployment rate well below 5%, Lebanon is experiencing a competitive labor market, which makes attracting and retaining talent difficult,” she said.
After concluding the pay study, recommendations for Lebanon included increasing the pay grade structure by 3% for all grades and positions. This recommendation also suggested another increase in police and dispatch wages of 1.5%.
Lebanon Mayor Rick Bell said that he just didn’t see a way that the city could afford the 3% increase and hire the additional personnel that departments have requested. Bell said that he was opting for a 1.5% increase which would leave enough in the budget to make the requested hires.
Reichle expressed concern that the adjustment would position the city “below market” averages going forward and urged the city council to address this disparity with a cost of living adjustment in the next budget year or she fears the pay issues could compound over time.
The recommendation for increasing the pay raise also included information about the positions in Lebanon that were low compared to market counterparts. Sanitation, accounting and customer service were some of the positions mentioned that need to move up a pay grade in order to align the range with appropriate market value.
Another issue of concern regards the manner in which some city employees are paid for call back instances. Several departments require that employees be on stand by around the clock, in the event of emergencies. Employees are compensated for this time as well as for a “call back,” which occurs when they are apprised of a situation and actually clock back in to go address it.
Current call back policy allows for an overtime premium earning when no overtime has been worked. Call back pay generated an additional overtime premium expense of $188,000 in 2020 alone. Reichle believes this is an opportunity to trim unnecessary expenses.
She suggests that the best practice for call back would be “to pay overtime premium earning only when actual overtime is worked.”
This way the city can apply those funds directly to employee wages.
“The correct way to pay employees is by ensuring a proper wage rate, not improperly inflating earnings,” Reichle said.
This recommendation is supported by Lebanon’s Municipal Technical Advisory Service consultant. MTAS is an agency that provides consulting and training services to municipal leaders and elected officials.
Additional consultation was sought from Steve Thompson of Burris, Thompson and Associates, a compensation and talent management company in Nashville that specializes in municipality studies like these. Thompson also supports the recommendation.
Reichle said that as recently as 2018, the city had utilized the firm’s help in adjusting pay plans. That year, per Burris, Thompson and Associates’ recommendation, the city adopted another pay correction for $700,000.
Also, in 2016, per the consultants’ recommendation, Lebanon adopted a $1.8 million pay correction which included substantial service adjustments for many employees with seniority.