Group considers wages, benefits
FAYETTEVILLE — City officials need to decide if the pay plan for police and firefighters will focus more on wages or total compensation when comparing to other markets, a committee agreed Monday.
The city’s current pay philosophy strives to lead the region in base pay, but compensation includes total rewards, meaning wages and benefits.
The philosophy has a sliding scale, Chief of Staff Don Marr said. If wages for
police and firefighters lie below the market rate, benefits would be extra high. If wages sit at market rate, benefits would have to be high enough to lead the competition. Lower benefits would require higher wages.
The Pay Plan Committee on Monday sorted out which direction it should go in deciding how to pay the city’s uniformed employees. Consultants the Johanson Group led the discussion, focusing on a few key areas.
Early this year, Johanson compared pay rates in 22 other cities in Arkansas and surrounding states to what the city pays its employees. The study found regular city employees fell behind that market by 11.5 percent. Police lagged by 15.6 percent and firefighters came up 12.5 percent short.
City employees are on a merit-based plan. Police and firefighters are on a step plan.
Johanson made recommendations to get each group up to the market rate. The city then adopted the entire Johanson plan for merit employees, which entailed changing their pay range.
However, the city adopted 25 percent of the recommended plan for police and firefighters. The committee was formed to address the discrepancy.
Chief Financial Officer Paul Becker has said fully implementing the Johanson plan for step-based employees would cut deeply into reserves and require unprecedented growth in sales tax revenue.
Capt. Jimmy Vinyard, representing the Fire Department, said he saw the city’s current compensation philosophy, mixing wages and benefits, as being used to lower the wages end.
“To me, the word ‘benefit’ means it is on top of pay,” he said. “It’s a benefit that’s either provided solely by the city versus it’s allowed by the city and paid for by the employee. That’s not a benefit.”
Council Member John La Tour said a total compensation philosophy seemed more rational, since wages are taxable and benefits are not.
“As a CPA, I’ll tell you you’re better off tax-wise if you do get more benefits and less take-home pay,” he said. “It’s still an economic value to you.”
Marr said the committee needs to decide if it wants to prioritize having the highest wages or the most important benefits across the comparable market. A third option would have the committee take a deep dive into everything from shoes to pension and see how the city compares.
Blair Johanson with the consulting firm explained the difficulties in creating a sample market for the city to compare compensation. Benefits can vary wildly, and some cities, such as Rogers and Bentonville, have police and firefighters on a merit system, which skews the numbers.
The committee will hold a work session at its next meeting with the consultants to go over an extensive, bullet-pointed list of items. Topics include what cities to compare with in the study market, a deeper look into wages and benefits, how often to conduct a pay study and any changes to the step plan itself.