Sep. 27—The Decatur City Council's decision to reject a Personnel Board recommendation that would have increased total annual pay for city workers by $2.9 million, opting instead for a $2 million increase that bumps each employee's wages up 6%, is not sitting well with board members.

With neighboring municipalities also providing cost-of-living raises to their employees, board members say, the end result is that Decatur will remain at a competitive disadvantage in its ability to hire and retain qualified personnel.

The board's recommendation had been for an across-the-board 6% raise, supplemented by adjustments to the pay scales of those jobs in which Decatur pay is significantly lower than that of neighboring municipalities. Those adjustments would have added $900,000 to the annual price tag of the package.

Human Resources Director Richelle Sandlin, who recommended the $2.9 million package to the Personnel Board and the City Council, said her recommendation would have placed the salaries of all city employees in line with what neighboring municipalities pay.

She said at a Personnel Board meeting last week that the slimmed down plan approved by the council means Decatur will "still be at the bottom in a comparison with fellow north Alabama cities despite the cost-of-living increases all Decatur city employees will get when the new fiscal year begins" on Saturday.

Sandlin said it's important that the City Council recognize the public and private sectors work differently when it comes to compensation.

"We struggle against a private-employee mindset when it comes to compensation," Sandlin said. "We're not private employers. Our pay structure is different. We have to operate differently.

"We struggle with perception of employee performance (merit pay) and how a COLA impacts the pay scale and rewards performers and non-performers across the board."

She said there's a "lack of understanding" of the public compensation process among council members so they are "trying to force a private-pay process." She said a private employer can offer sign-on bonuses and other incentives to attract an employee that are not allowed in the public sector.

Personnel Board member Suzie Wiley said the City Council's failure to pass the full plan "is frustrating."

Personnel Board chairman Harold Gilmore said the City Council's method of dealing with employee pay "is unfair." He said the city has to find a way to do the right thing.

Gilmore said the rejection of the $2.9 million package is "discouraging," especially considering how much work Sandlin put into the plan.

"She did everything that was needed to present them that case that would get the city out of this hole," Gilmore said.

Council President Jacob Ladner voted against the Personnel Board's proposed 6% cost-of-living adjustment with pay-grade increases for selected positions, and also voted against the 6% COLA without adjustments that the council majority supported. He said he wanted the council to adopt a 3% COLA and then target those positions the city is struggling to fill.

"If somebody criticizes me for treating government like it's private, I take that as a compliment," Ladner said in response to Sandlin's expressed concerns.

Ladner pointed out that Sandlin recently said the city is only losing 1.5% of its workforce annually plus 1.14% of employees to retirement. These numbers show recruitment "is solid and we're not losing a lot of people," he said.

Sandlin said she originally wanted to recommend a 12% raise but she was told that would never pass.

McMasters, who voted for both proposals, said the 6% raise without market adjustments "was the best compromise we could get. This is the plan we needed to get three votes."

He pointed out that Decatur began falling behind market pay as far back as 2008 and previous councils didn't sustain a series of raises recommended by a consultant in 2018.

"We just approved the largest COLA in city history," McMasters said of the 6% raise. "We didn't get this far behind overnight, and we're not going to catch up overnight."

Sandlin said her plan to bring Decatur closer to market pay anticipated retirement and health insurance rate hikes and neighboring cities giving at least a 4% raise based on the national average.

However, Sandlin said her recommendation did not anticipate Athens approving 5% raises or Florence passing a 6% increase for all employees, plus an additional 6% for public safety personnel.

Hartselle matched her 4% anticipation and Madison's 3% raise is the lowest in the market. Counties weren't in her market study but Madison County's raise is 8.69% and Morgan approved a 5% COLA. While also not in the study, Huntsville also approved a 5% increase.

She said the across-the-board 6% raise fails to address many city jobs that need to be in a different pay grade in order for the city to be competitive.

Her plan would have ensured all Decatur employees are paid at least 95% of the market rate among neighboring municipalities, but the council's vote puts them at 90% of neighboring cities and doubles the number of employees being paid below 90% of market to about 20 employees, she said.

Sandlin said the council asked her and the Personnel Board to "focus on the areas of recruitment that are challenging like police and equipment operators, but that comes with multiple complications." One approach to this would be bringing new employees in at a higher merit level.

Sandlin said this way of adjusting the city pay scale creates issues like salary compression, and could result in some employees making as much or more than a fellow employee with more experience or a supervisor.

For example, she said using the targeted approach on an equipment operator in Environmental Services means "we're bringing in new hires that make more money than seasoned operators with 10 or 20 years of experience."

She said the targeted approach also creates a problem of "public engagement" among employees.

Personnel Board member Pam Werstler said these engagement problems also occur in the private sector. She said compression creates an issue where some employees aren't motivated to become a supervisor.

"They say, 'Why would I want to be a supervisor when, with a little bit of overtime, I can make as much as he does?'" Werstler said.

Ladner said he "finds it ironic" that they're arguing against a targeted approach when last year the board recommended, and the council approved, a targeted approach by giving Police Department employees an increase in addition to passing a COLA for all employees.

Sandlin said she will have a new plan for the Personnel Board and City Council in October and November to deal with merit plan issues and future compensation.

— bayne.hughes@decaturdaily.com or 256-340-2432. Twitter @DD_BayneHughes.