Council passes city pay grid change in split vote

It was a split vote Tuesday evening as the Sidney City Council approved 4-1 to modify the pay grid for city employees to reflect changes to minimum wage and keep the city comparable to surrounding area employers.

The modification was brought before council as an action item during their regular meeting this week, and was recommended by the city's wage and comparability consultant, Paul Essman with Capital City Concepts LLC. City Manager Ed Sadler presented the agenda item to the council.

Sadler said the minimum wage changing to $9 an hour at the start of 2016 spurred administration to propose modifying the existing grid.

The existing grid, which was approved by council nearly three years ago, has the lowest starting salary set at $7.70 an hour, more than $1 lower than the current minimum wage standard.

"We're recommending taking off the bottom three grades, one through three," he said. "All of those start at below $9, so we're not really going to pay steps one through three."

Sadler said the consultant also recommended that, in order for the City of Sidney be more comparable to the salaries of surrounding areas, removing an additional pay grade level that started employees at a salary that was too low to be competitive.

"So we merged compliance with the minimum range with the recommendation of your consultant," he said.

Sadler also recommended that they not renumber the pay grid.

"That just causes all sorts of paperwork, trying to convert people from 'Grade A - Step 13' to now move it back three," he said. "It makes people feel like they got demoted, and it doesn't do necessarily well for yourself, either."

The proposed pay grid also added three new levels to the system, which Sadler said gives the grid the same span of salaries as the previous grid.

"And not end up compressing your pay," he said. "Because then the next time they raise the minimum wage, you'd end up taking off another one, and eventually you'd end up compressing your pay grades."

Sadler said with the new grid, the philosophy has not changed, with raises on the lower end set at 5 percent, and on the higher end at 2.5 percent.

"And that has been a philosophy that you've implemented for some time, and we saw no reason to venture from that, if you will," he said.

Jo Houser, the city's human resources director, said any changes in steps typically take effect at the beginning of the fiscal year.

"You still have to have a successful evaluation," Sadler said regarding any step increase on the pay grid.

Councilor Chris Gay asked what happens once an employee reaches the end of the grid.

"You're maxed out except for cost of living (adjustments)," Sadler said. "Just because you've been here 40 years doesn't mean there's a 'Step 40.' The job still has a maximum value for you."

Houser said the pay grid is standard to other municipalities in the area.

"In fact, when they do comparability studies, they ask for our pay scale, and they ask for our job descriptions," she said. "And when we do it, we do the same thing."

Sadler said the comparison is part of the reason administration is recommending removing that additional pay grade level.

Councilor Joe Arterburn asked Sadler "as a practical matter" what would happen if the City of Sidney did not modify the pay grid.

"We still won't start anybody at the first three pay grades because it's minimum wage," Sadler said. "We may well, depending on experience, start them at 'Step B' or 'Step C.'

"We've been told to be competitive, and to start them at 'Step A' puts us somewhat behind the surrounding communities. That's why we're recommending it, but we will have to pay what we will have to pay to get qualified people."

Arterburn said most of the salaries in 'Step A,' the step administration was recommending be eliminated, was above the minimum wage level. Sadler said they are, but are low when compared to the same positions in the surrounding area municipalities.

Gay said that in practice, employees do not start out at that level anyways.

"Not for the most part," Sadler said. "There's some, probably."

"So why change it?" Artburn asked.

"We just don't need it," Councilor Roger Gallaway replied.

Sadler said when advertising for positions, it is done usually with a range for the salary.

"If we're really not going to pay that, then we really shouldn't advertise it," he said. "We would like this to reflect what we're really going to pay people, and with a pay scale that is applicable. Anything under $9 isn't going to happen."

Mayor Mark Nienhueser then asked for a motion regarding the item. Gallaway moved to approve the modification to the pay grid, and Gay seconded. The motion passed 4-1, with Arterburn voting against the modification.

"I don't think it makes it any easier to understand," Arterburn said regarding the modification.

"But it more accurately reflects what we are doing," Gallaway replied.