Group con­sid­ers wages, ben­e­fits

Northwest Arkansas Democrat-Gazette - - NORTHWEST ARKANSAS - STACY RYBURN

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.

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