City Finance Committee Votes Down 1% Wage Increase for City Employees

OnFocus – At Tuesday’s meeting, the City of Marshfield Finance, Budget, & Personnel Committee did not approve Payroll Resolution No. 2020-16, which would have provided a 1% compensation plan increase effective November 1, 2020 and authorized the subsequent salary adjustments for all non-represented staff.

The increase was first discussed on May 19, at which time committee members expressed concerns on possible impacts of COVID-19 on City finances, and determined that it was then not a good time for wage increases as residents were experiencing job losses/furloughs, and businesses were significantly impacted.

“The City has not experienced a noteworthy drop due to COVID-19,” said City Administrator Steve Barg.

According to Barg, as of August 31, the City has spent about 60% of its 2020 budget.

“This doesn’t account for seasonal fluctuations that may still occur, but it’s definitely a good sign,” he said, noting potential upcoming snowplowing costs. “Expenses can be seasonal.”

The added cost for 2020 resulting from a 1% pay scale increase implemented on November 1 would have been approximately $18,000, of which only about $12,000 would be an increase to general fund expenses, according to Barg.

He added that this increase was sought approval for now because the funds are already in the approved 2020 budget and the proposed 2021 budget will only include step increases with no adjustment to the pay scale.

(The City is facing a challenging budget season. Read more here.)

“Our overall financial situation is tenuous. It’s going to be a tough budget. We do have a structural deficit issue and some debt issues we are facing,” said Barg. “I feel we made a commitment to our employees in 2018. Many people were behind market from where they should be in the pay scale.”

The current City of Marshfield Non-Represented Compensation Plan was implemented on July 1, 2018, following the City’s compensation market study with McGrath Human Resources Group. The compensation plan established a pay range, minimum control point (market rate), and maximum for each job. The strategic plan the City adapted for 2019 included a staff raise, according to Barg, as well as Council’s budget last year.

“We want to be an employer of choice,” said Barg. “We want to be seen in a way that people want to come here and stay here. Without wage adjustments, we will fall behind. It’s not the perfect scenario but a request of serious consideration.”

Alderman Nick Poeschel reiterated the point of not letting City employees fall behind what comparable cities were paying. “I think it’s important we stick with the commitment to the employees that we made. Ultimately it’s a commitment to the citizen, the services we’re providing them,” he said. “It appears we’re not having the shortfall we anticipated.”

“2020 is looking good,” said Finance Director Ron Aumann. “The 2021 budget is the troubling part. We are starting there in a deficit.”

Alderman Pete Hendler expressed concern about the increase.

“I guess I’m not as enthusiastic about this year and the coming year. I understand the employees are anxious and are doing a good job under difficult times, but let’s think about the people in this community that are paying the bill, “said Hendler. “There is rampant unemployment, furloughs, terminations, and there are over 300+ kids that can’t eat without going to the school district to get their lunch.”

“I find it very difficult that we insist on increases without sharing that with others in the community,” he continued. “All forms of government are going to be really impacted next year and I would like to see the administration take the 1% increase off the table, furthermore consider terminations, layoffs – not from the bottom-up, but the top-down. We’re in a real situation, folks, and I’ll do anything to keep the ship afloat. But I think wherever we can, we should consider holding the line and sharing some of the difficulties people have in this community.”

Alderman Ed Wagner asked HR Director Jen Rachu for clarification about City staff pay increase process. Staff raises would continue regardless of the 1% additional increase, under City policy. (The 1% increase would have been an additional increase to put the City on par with the direction established in the 2018 CIP.)

“Even if this weren’t passed and we followed through with the step plan, most employees are going to get between a 1.5% and 2.5% raise anyway,” said Wagner. “I agree with Steve that we want our employees paid well. We also have a responsibility to the community. I have neighbors that have been on furlough or laid off. I know that. I know there are small businesses that were just start-ups and they are struggling. None of our people went on furlough, did they? None of them were laid off, did they? The point is, we’re part of the community and I’m basically agreeing with Mr. Hendler on what he said. I don’t feel it would be appropriate until we know the recovery is well underway that we can do this. At this point, I can’t support this.”

The motion to approve the 1% increase failed 3-2, with Poeschel and Witzel voting “yes” and Wagner, Spiros, and Hendler voting “no.”

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