City to pursue salary study of all departments in effort to recruit, retain employees

Published 12:00 am Friday, August 6, 2021

By Natalie Anderson
natalie.anderson@salisburypost.com

SALISBURY — With a nearly 10% vacancy rate across all of its departments, the city plans to move forward with a salary study using funds allocated in the current fiscal year budget to study retention and recruitment issues.

At Tuesday’s City Council meeting, City Manager Lane Bailey talked with council members about compensation challenges in the fire department as well as recruitment and retention issues seen throughout the city’s departments.

“There’s no question that firefighters’ compensation is below market,” Bailey said. “The issue that we have and the challenge that we have is we have revenue challenges, but we also have this issue citywide.”

For the current fiscal year, council members authorized Bailey to use a nearly $1.5 million surplus from the 2020-21 fiscal budget to implement a 6.5% pay increase for sworn police officers, 5% to 15% raises for certain public works positions and an additional $258,000 to further evaluate recruiting and retention issues across the city’s departments. Additionally, the current budget increases the city’s 401(k) match for employees from 3% to 4%, except sworn officers, who receive a 5% match by law. Those 401(k) match increases amounted to more than $130,000 in the general fund, $4,622 in the stormwater fund, $47,145 in the water and sewer fund and $5,071 in the transit fund.

The budget also includes a 2% cost-of-living adjustment increase for all city employees, which will take effect Jan. 1.

Bailey doesn’t need a council vote to move forward with the study. He also is set to retire in December, meaning the to-do list for the next city manager will include solving the challenge. While the city had funds to implement some pay raises because of a surplus, additional raises could require the city to dip into the general fund or raise the tax rate, posing a problem for future years when money is tighter.

Bailey has begun reaching out to the limited number of firms that conduct such studies and estimates a total cost around $8,000. One, he said, wouldn’t be able to begin a study for Salisbury until November since other municipalities across the state are grappling with this same challenge.

Scott Mooneyham of the North Carolina League of Municipalities said both the private and public sectors are experiencing the challenge. Although public sector jobs have historically paid employees less than what the private sector offers, he said, there has always been the appeal of benefits. For that reason, Mooneyham said it’s important to study the benefits being offered to employees as well.

“It’s why the league has fought so hard for pensions,” he said. “It’s a recruiting tool.”

The league reports 80% of all jobs in North Carolina are found within municipal borders, with 75% of all retail sales taking place within those borders.

In addition to consulting services, the league also shares an annual salary survey with participating municipalities so leaders can see whether they’re in line with other cities and towns.

Though there are no vacancies reported among fire personnel at this time, there is still concern among city leaders for their compensation. Fire personnel received a raise in 2018, which included a higher base pay, certification incentives and monthly stipends. In January 2019, the base pay for fire control specialists I and II were raised to a little more than $31,000 and nearly $32,600, respectively. The ranks of lieutenant rose from almost $38,000 to $45,000. Captains received a nearly $6,000 raise. Human Relations Director Ruth Kennerly said some salaries were adjusted after re-evaluating employees’ rank, years of service and education level. Some overtime pay for certain shifts was also implemented.

Kennerly said the challenge with adjusting wages is that surrounding cities are doing the same to remain competitive. Salisbury, she said, once had better compensation for fire personnel than Kannapolis, but now Kannapolis surpasses Salisbury.

Because of a decision made decades ago, firefighters in Salisbury do not pay into the Social Security program. Convincing enough people necessary to opt back into the program, Bailey says, would be difficult because those benefits require at least 10 years of contribution but result in a lower compensation in firefighters’ paychecks. However, Bailey said the city is considering the implementation of a 457 plan, which is an IRS-sanctioned employee retirement plan offered by state and local government agencies along with some nonprofit employers. Bailey says the return on investment for that plan would be more appealing than Social Security benefits, with the exception of the spousal death benefits granted to Social Security recipients.

Mayor Pro Tem Al Heggins told Bailey during Tuesday’s meeting she wishes the city would have conducted a salary study before making the decision to implement pay raises for police and public works employees during the current fiscal year.

“I think that’s a good thing to do but I also think that maybe a pay study should’ve been something that was done on the very front end of this fiscal year budget that we voted on,” Heggins said. “There should’ve been some thinking put into a pay study for the entire city before an issue came out. So I’m just disappointed by that.”

Given the large number of vacancies across both departments, Bailey said the human resources and finance departments felt those positions in particular were too pressing to not act upon.

Of the 81 positions in public works, there are nine vacancies. Those vacancies were most prominent among sanitation and waste collection services.

“Now hopefully, no one in this room will need police or fire services tonight or this week or this year,” Bailey said at Tuesday’s meeting. “But everybody in this room will have their garbage picked up each week, and that is essential.”

In the information technology department, there are two vacancies from the seven total positions, with the recruitment of a network administrator of grave concern, Bailey said, given the last year of virtual meetings and threats to cybersecurity. In the finance and business services department, there are five vacancies out of 20 total positions.

Earlier this week, Salisbury Police Chief Jerry Stokes reported 12 vacancies in the department, with the promise of a few candidates undergoing the hiring process right now.

In total, the city estimates at least 40 vacancies out of the 460 total number of employees.

During the meeting, council member Brian Miller reminded council members of the Fibrant debt set to expire in 2029, which will be reflected in the city’s budget as a nearly 10-cent reduction on the tax rate. For that reason, Miller said council members in future fiscal years may need to invest in the workforce via the fund balance because of the guaranteed savings from the debt’s retirement.

Heggins said she had a concern that the city may lose firefighters if the study takes too long, but Miller said doing anything without the objective findings from the study isn’t ideal.

Contact reporter Natalie Anderson at 704-797-4246.