Lynchburg City Council is divided on an across-the-board 5% wage increase for all city employees and, with issues of salary compression and employee retention weighing on councilors’ minds, a majority voted to delay a decision two weeks in the hopes of exploring additional options.
Originally built into the proposed fiscal year 2022 budget was $288,903 targeted to provide raises only for the lowest-paid city employees, an initiative that would affect about 70 people. This initiative continued action based on the citywide salary study and would bring all of these targeted full-time employees up to their market pay rate.
But after a projected increase in city revenues for fiscal year 2022, and a 5% salary increase approved by the state for all state-funded city positions, staff recommended council implement an across-the-board 5% increase instead.
Interim City Manager Reid Wodicka said Tuesday the across-the-board raises would “do the most good for the most number of people.”
Totaling about $3.3 million, he said a 5% salary increase for all employees would keep the city in line with the city schools and surrounding localities, many of which have approved 5% raises, and he said without it, there would be at least three years without a general wage increase for city employees, as the last increase was in 2019.
While At-large Councilwoman Treney Tweedy, Ward III Councilman Sterling Wilder and Vice Mayor Beau Wright were strongly in favor of moving ahead with the 5% across-the-board raises, Ward IV Councilman Chris Faraldi questioned what the third option would be — something between taking no action or moving forward with the 5% raises.
Central to these conversations is the Korn Ferry Pay Study, an $100,000 salary study done in 2018 that found more than $5.1 million was needed to bring all city employees to comparable market salary rates, according to a September 2018 report to city council.
The pay study has been the subject of a recent lawsuit between the city and the Lynchburg Fire Fighters Association, which petitioned Lynchburg General District Court in early April to have the city release the records in accordance with a Freedom of Information Act Request.
FFA representatives, including Fire Capt. Marty Misjuns, spoke before council in April, raising issues surrounding salary compression, staff retention and unfilled positions — something he said there had been a lack of “meaningful policy” to address.
Last week, Wodicka released the pay study to the public and said in a statement that, despite having the Fire Fighters Association’s lawsuit dismissed, he didn’t find it to be a “wise use of resources” to protect a document that is several years old. He said it only provides information the city already knows — that some employees were paid below their market value, that there are market compression issues and other challenges that “were many years in the making.”
In February 2019, the city took its first actions based on the pay study: All employees who were earning less than the minimum of their salary range received salary increases that brought their salaries up to the minimum of those ranges, and recommendations from department directors were implemented to address the biggest pay concerns.
In addition, all employees received a 2% wage increase in July 2019.
At Tuesday’s meeting, Wodicka said there is roughly $3.6 million more that needs to be applied to meet the needs of the pay study. Another phase of the study was meant to be implemented last year ahead of the pandemic, but because of financial challenges related to COVID-19, he said staff had to reconfigure the budget, and a defined plan or methodology never was developed.
Wodicka said currently the 5% wage increase is recommended as the best use for city funds.
One concern, said Wodicka, is implementing the pay study’s recommendations would only affect about half of city employees, and half of city police officers and a third of the firefighters would see no benefit at all, according to the pay study.
“That’s a concern for me; I want to make sure that we are spreading those opportunities as widely as we can,” he said.
Wilder voiced support for the general pay raise, noting the 5% salary increases are being implemented in many surrounding localities. Not enacting the 5% pay raise would mean some funds allocated by the state are “left on the table,” as they are contingent on a local match.
“I don’t want to see our city staff members left behind,” Wilder said.
While he agreed compression is a significant issue in the city, he said he wants to take more time to analyze it and have a larger conversation once council gets through the budget process.
Ward III Councilman Jeff Helgeson disagreed and said fixing compression will cost money, and it would be prudent to create a targeted strategy before spending $3.3 million on a general wage increase.
“Once this money is spent,” he said, “all those problems are still there.”
Ultimately, council voted 4-3 to delay the vote a week and give staff the opportunity to come back with a “third option.” Faraldi, Helgeson, Mayor MaryJane Dolan and At-large Councilman Randy Nelson were in favor of the delay. After the vote, council agreed to give staff an additional week — pushing the conversation to its May 11 meeting.
Wodicka warned council this is not the kind of plan that could be formulated effectively in two weeks, and developing a citywide strategy to address the issues would “take time to do it right.”
“To do good policy recommendations, it’s not two weeks, it’s not one week, we need months to do that and do really good work,” he said.
In an interview Wednesday with The News & Advance, he said staff would return in two weeks with a “general approach” for the next phase of the salary study, and how many employees it would affect as an alternative to the across-the-board wage increase.
He said this was a complex issue, and this would be a “high-level review” of a potential approach that could be done with the funds available, totaling about $3 million.