More than half of Colorado Springs city employees make too much money to qualify for a pay raise under the new salary schedule.
If they hustle, some employees on the lowest end of the pay scale could get a merit pay raise in 2014, if the City Council approves Mayor Steve Bach's 2014 budget, which is expected to include a 3 percent increase for raises. Bach will release his proposed budget Monday. But even those city civilian employees who get a raise could take home less money in their paychecks because of higher medical premiums.
"It's painful, there is no question about it," Bach told council members in the hours before they discussed the new pay schedule at the Sept. 24 council meeting. "Hopefully, we can provide other reasons why people would want to stay."
The council on Tuesday is expected to finalize the new salary schedule for the city's 1,184 civilian employees. The council approved the salary schedule in September in a first reading.
Under the new salary schedule, 46 employees will get a raise this November, retroactive to April, to bring up their salaries to the new minimum starting points for their job descriptions.
About 370 employees will get a raise taking into account their experience on the job so that new, incoming employees don't make more than they do. The raises cost $400,000, which the council will pay for using $288,500 from the city's rainy-day fund and $111,500 from other funds including the airport enterprise, fleet fund and office services fund.
The new salary schedule redefines the minimum salary, the market average and the maximum salary for more than 300 city job descriptions. Before, employees would typically start in the 55th percentile of the market and work toward the 90th percentile - meaning at the top of the city's pay scale, 10 percent of people in the market working the same job made more money. The city scaled back the starting point to the 25th percentile and set the maximum at the 63rd percentile - meaning 37 percent of the people in the market working the same job make more money.
City Councilman Merv Bennett said he worries that setting the top of the pay scale at the 63rd percentile of the market could affect recruiting and retaining young professionals.
But Bach told council members it's not an arbitrary cap, it's just what the city budget can afford.
Next year, the salary ranges will shift up by 2 percent. But officials estimate that more than half the city's employees make more than the market average and likely will not be eligible for a raise.
"No hope for a raise would not be the right term, but slim hope would be," said Laura Neumann, city chief of staff.
The new salary schedule has caused concern among city employees, who have sent emails to staff and council members; but only one employee spoke publicly against the proposal at a recent council meeting. Beginning in November, city employees can appeal their job description and new pay range.
Next year, for the first time in five years, the city's budget is expected to include a 3 percent increase for pay raises. The raises will be for employees who make below the market average. And raises will not be automatic. They will be awarded based on performance.
"You could get zero, or you could get 4 percent," said City Councilman Don Knight, a member of the council's budget committee.
The change in pay ranges and shift from across-the-board raises to merit raises is the result of a nearly two-year study on city salaries. City officials set out to measure Colorado Springs city salaries against other cities and the private sector. They found that, on average, Colorado Springs employees were paid about 1 percent less than the market average.
The changes in salary ranges are the first since 2008. Mike Sullivan, Colorado Springs human resources director, said the city ought to re-examine the market at least every three or four years. The expectation is that if the economy improves, salaries will, too.
Like trends in the private sector, city employees can expect to pay more next year in health care premiums. The city will offer two health care plans. One plan could cost an employee, insuring a family of four, $2,000 more a year in premiums; a second plan could save that employee $850 a year by offering lower premiums but higher costs for doctor visits.
"When you combine pay and health costs, most employees will lose ground," Councilwoman Jan Martin said. "Their pay will be less than it was in a previous year. They will start out with less. They will be even further behind then they were before."