Kalispell Council favors changes in pay scales

Kalispell City Council members on Monday generally favored a plan to alter the city’s salary matrix and to increase the salaries paid non-union members if raises are negotiated for union members in any given year.

City Manager Jane Howington was directed to tweak her proposal somewhat and bring it back to the council in September.

Howington pitched the changes for two reasons.

One is that as a cost-savings measure, council members had frozen salaries for non-union employees in the last several years. That has resulted in a compression problem in salaries between union and non-union employees.

The second was an imbalance of internal equity and the misplacement of positions within the current employee classification system.

Howington suggested revisions to the classification matrix and salary schedule to consolidate grades, place like positions in all city departments into the same grade and narrow the salary ranges in each grade.

It’s time for the city to take these steps, she said, because issues with union pay have been resolved and the city’s reserve fund balance has greatly improved. She expects it to reach $1.5 million by June 30, 2012, the end of the current fiscal year.

“Now’s the time to see all of our employees are fairly and equitably treated,” Howington said.

She views adjusting salaries in the same light as the city building up its capital improvement fund. “This is the same thing, it’s a personnel improvement plan.”

As salaries have become more compressed, Howington said the current city pay scale has very little difference from the low end of the pay scale to the high end. That makes it difficult to promote employees from within, she said, and difficult to fill supervisory positions. When that occurs, the city loses institutional memory and history.

“There are very few people from within willing to take a pay cut and take on more responsibility,” she said.

The situation developed in part because council members in the past had not adjusted entire band scales upward, but rather had adjusted only the top end, Howington said.

Department managers had been allowed to reclassify employees, create new job descriptions and move employees up in the pay scale. That has resulted in administrative assistants now being spread over seven pay grades in the city’s current 19-grade scale. She’s suggested a new six-grade scale.

“I’m trying to put back that equity,” Howington said, “so it’s not how popular you are, but where you are.”

The first step the city needs to take, Howington said, is to consolidate the number of pay grades and to “move people back in grades as appropriate.”

At the same time, the salary ranges for the grades should be consolidated.

Theoretically, city employees would begin their job at grade 1 and advance to grade 6, she said.

New employees typically would be hired at the low end of the wage grade, she said, but some exceptions are likely to be made for some types of experience.

“But we’re shooting ourselves in the foot if we bring everyone in at the upper end of the grade,” she said.

Howington’s proposed consolidated annual salary range for grade 1 is between $38,500 and $51,800. Grade 3 has a range of $50,600 to $68,300. Grade 6 has a range of from $65,400 to $102,500.

Grade 1 employees would include legal secretaries, office coordinators and GIS specialists. Grade 3 includes senior civil engineers, department superintendents, senior planners and the building official. Grade 6 includes the city clerk, municipal judge, city attorney, fire and police chiefs and department directors.

Council member Tim Kluesner disagreed with the pay grade amounts. “Some need to be adjusted downward. One-quarter of them are way out of what the private sector is paying,” he said.

After the matrix is changed, it’s incumbent on city leaders to always move the matrix to align with union salary increases, Howington said.

If the new matrix is implemented this fiscal year, it would cost the city an additional $36,600 in pay for non-union employees to match raises given to union workers. If the city adopts the six-grade matrix plan this year, it would cost about $19,000 to adjust pay.

Employees who are now paid more than they would earn after the new plan is implemented wouldn’t face a pay cut, Howington said. But they would be frozen at their current pay. If one of those positions becomes open, the position could be reclassified and the new employee hired for a wage at the bottom of the salary band, Howington said.

Council member Kari Gabriel said if an employee is being overpaid, his or her pay should be cut. If that’s not possible, the city should “at least freeze them from” any salary increase, including cost-of-living adjustments, she said.

“Everybody should be compensated for their performance, period,” Gabriel said.

Phase 2 of Howington’s plan is to narrow the bands of the pay grades. The goal is a 5 percent spread between the grades. That gives employees incentive to jump ahead, she said. Her recommendation is to implement that over five years for a total cost of $79,000.

Phase 3 would be to alter the method of employee evaluations so they can be used to reward people with raises and in developing employee and department work plans.

Howington favors the concept of giving employees raises based on merit rather than cost-of-living adjustments. Merit increases recognize effort and success, whereas cost-of-living increases reward people for living and breathing, she said.

Council member Bob Hafferman said he realized there are pay inequities among city employees that should be rectified.

But, now isn’t the time, he said, because “no matter what we’re doing we’re talking about money, raises. We’re not cutting pay for anyone.”

Hafferman said unemployment remains high and too many “bad signs still prevail.” Many Kalispell residents are barely getting by financially, Hafferman said, and the council should take their morale into consideration as it discusses salary increases for city employees.

There should be “no pay increases until we’re on sound footing and the economy looks good,” Hafferman said.

Reporter Shelley Ridenour may be reached at 758-4439 or sridenour@dailyinterlake.com.