By Leilani Haywood
The City of Lee’s Summit Interim Human Resources Director Jackie McCormick gave a presentation about employee pay and benefits at the City Council Budget and Finance Committee meeting on March 12, 2018. Mayor Pro Tem Rob Binney was the chairman of the meeting with Councilwoman Phyllis Edson and Councilman Fred Demoro attending as an alternate. Committee members not present include Councilmembers Craig Faith and Dave Mosby.
“For FY 2018 you adopted a budget with $45.8 million that goes to personnel specifically,” McCormick told the committee. “This is a basic overview of not just the pay or salaries that our employees receive but also the hidden benefits they receive.” McCormick presented three scenarios for a police officer, fireman and city staff starting at 2018 salaries. The three scenarios were set at starting at 25-years-old and married, then at 10 years and retirement with no promotions, no overtime and two percent raises.
Benefit packages include: health, dental and vision insurance, short-term and long-term disability, fully funded retirement, optional 457(b) investment opportunity, vacation and sick leave, life insurance paid by the City. “We have generous vacation and sick leave opportunities,” said McCormick. “We automatically pay for life insurance equal to one year’s salary of the employee.”
The City pays 100% of an employee’s base premium for their health, dental or vision insurance and 80% or more of the premium for an employee and their family. The city also pays 100% of the premium for long-term or short-term disability that covers 80% of the employee’s salary. Employees receive from one week paid vacation to up to five weeks depending on their length of service.
Councilwoman Edson asked if the 2% pay increase was based on a Cost of Living Adjustment. McCormick answered that according to city charter, pay raises were based on merit. “It’s based on performance evaluations from needs improvement to distinguished performance,” said McCormick. “The average is 2%, but some people receive 1% or 3% raises.”
Councilwoman Edson replied that having a merit-pay increase instead of COLA “may be one of the places we’re falling down.” McCormick replied, “We’re required to pay by merit according to charter.” According to the presentation, a first-year firefighter would earn $43,626.54 per year and have employer-paid benefits of $22,434.93 per year with a total compensation package of $65971.47 that includes a $6,000 stipend for Paramedic Certification.
At 10 years of service, the firefighter would be earning $52,137 per year with a total compensation package of $75,617.49. The same firefighter with no promotion would hypothetically retire at 55 with a salary of $77,473.76 with LAGERs retirement monthly benefits of $3724.80 per month. Councilwoman Edson pointed out that assuming the employee received the 2% pay increase every year, their pay increased $3 an hour in 10 years of service.
“The complaint has been that no one has been able to achieve these salaries,” said Edson. “I know that the conversation has been that the salaries haven’t grown as quickly in general as other employers or even with the rate of inflation and that would take something beyond just our merit pay increase probably in order to do that,” said Steve Arbo, city manager. “Our current merit pay program is not cost of living and it’s just for performance and it’s rare that we ever see opportunities where we’re giving like a four to eight percent pay increase in one year. We’ve had those especially when our big shopping malls came online we saw substantial growth in our sales tax and we were able to have a six percent pool and have anything from four to eight percent pay increases. I would say since 2008 we’ve been lucky to get or to provide a two percent to three percent pool which we all know is really not moving anyone ahead of the market.”
McCormick said more than half of the employees receive the two percent raise and the other half receive a higher raise while a smaller percentage receive under two percent. Arbo cited a survey conducted by the City of Lee’s Summit asking employees about the importance of pay versus benefits. He explained that younger workers said pay was more important while older workers valued benefits.
“Why we’re presenting this is that it’s going to be difficult for us to be both…to have great benefit program and pay that outpaces other employers,” said Arbo. “When we look at our pay programs and step plans and other types of things that will address the known problem that we’re not at market and we have the potential to lose mid-tenured people, let’s say five to 10 years, that it’s more than just the dollars to the payroll.”
Arbo added that if take-home pay is more valuable to employees then benefits then maybe the benefits package needs to be evaluated. “Mathematically we have to look at how do we make that equation worked if these benefits aren’t being valued and it’s more on pay,” he said. “Maybe look at benefits side and taking some of these costs and reassigning them to pay with existing revenue source we have.”
The committee didn’t make any decisions but discussed going through the budget for salaries and benefits by line item. The committee also discussed the possibility of opening a health clinic in partnership with local hospitals following the example of Lee’s Summit School District’s employee health clinic in collaboration with CareHere.