Archived Story

Council mulls COLA, merit pay

Published 1:24am Thursday, April 25, 2013

Washington’s proposed budget for fiscal year 2013-2014 is a mixed bag of news for city employees.


City Manager Josh Kay’s recommended budget incudes a 3 percent cost-of-living adjustment for city employees, but it also indicates premiums for health insurance likely will increase by 8 percent. City employees last receive a cost-of-living adjustment in 2008.


“There is an 8-percent rate increase for health insurance, and that applies to the city and also applies to those employees that have some level of dependent coverage, whether it be employee spouse, employee children or employee family,” Kay told the City Council during its meeting Monday.


The proposed budget also includes a 2.5 percent increase in merit pay and a 2.5 percent increase in longevity pay. Employees would be eligible for one or the other, not both.


Councilman Doug Mercer weighed in on the matter.


“I’m a firm believer in merit pay, but I don’t think that if we going to go the merit-pay route, we ought to go the COLA route,” Mercer said.


Mercer proposed the cost-of-living adjustment be changed to 2.5 percent because that’s how much the cost-of-living index has increased in the past year or so. Mercer also suggested using a “pool” system to provide merit raises. Under Mercer’s example, a pool would be funded at the rate of 1.75 percent of that specific pool group’s payroll.


“I’m using 1.75 because I’m assuming if you’ve got a spread of 1 to 1.75 to 2.5 that 1.75 is going to be average. … Then you work within that pool. That means if you’ve got 10 employees and you’ve got $17,500, then you know that’s your limit. If you’re going to rate your people, you’re going to rate them if they were in that pool,” said Mercer.


“I don’t disagree with the general premise of a varied merit increase based on a pool, but I don’t think you could take that average logic because that would assume that you have just as many people on one side of the average as the other. Hopefully, we don’t have that many under-performers,” Mayor Archie Jennings said.


Mercer said that some employees would be below average, others would be above average but the majority of employees would fall in the average range, or the 1.75 percent mark.


Councilman Bobby Roberson proposed putting the cost-of-living adjustment at 2.5 percent and setting merit raises at 0.5 percent for a maximum 3 percent increase in employees’ COLA and merit revenue.


Councilman Ed Moultrie said he prefers following Kay’s recommendations on merit pay and the cost-of-living adjustment.


Jennings noted that although the last cost-of-living adjustment came in 2008, there have been merit increases and bonuses paid out since 2008.


Mercer pointed out that including the 3 percent cost-of-living adjustment and merit raises at an average of 1.75 percent in upcoming budget would add $480,000 to the city’s payroll for the next fiscal year, which begins July 1.


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