Lee’s Summit employees are underpaid in wages, but get more generous benefits than their peers in comparable cities, according to a study commissioned by the city.
Over the next couple of months, the Lee’s Summit City Council will decide if it will change that mix.
The Council got a draft report of the compensation study in late June, and its consultant, Springsted, is taking comments from employees before finishing the study and presenting it for approval.
The study says on average Lee’s Summit employees are paid less than the market rate.
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T.L. Cox, a senior vice president with Springsted, told the council that the company surveyed other cities with questions about wages and benefits and job descriptions. It also surveyed Lee’s Summit employees on their responsibilities. Employers surveyed included Blue Springs, the Central Jackson County Fire Protection District, Independence, Johnson County and Consolidated Fire District No. 2 in Johnson County in Kansas, Kansas City, Lenexa, Olathe and Shawnee.
Springsted took the results and made comparisons between job responsibilities and compensation for the city’s full time positions.
Several council members said it was important to have competitive pay.
“I think we’ll have more people retiring than we’ll have people available to work,” said Councilwoman Phyllis Edson. “I think we’re going to have to work at getting those people and keeping them.”
Cox said non-union employees pay is about 9 percent below the market average. The Association of Machinist and Aerospace Workers, Lodge778, which represents custodians, maintenance and equipment operators, is 7 percent behind the market.
Police and fire department salaries are on average below the market, with varying percentages for different ranks, he said.
But to Lee’s Summit employees’ advantage, the city’s benefits are above average.
Lee’s Summit picks up 100 percent of the health care insurance for individual employees and 80 percent of family coverage. The city also provides a retirement plan at no cost to employees. Its contribution to dental and vision coverage is better than average. However, it does not provide retiree health coverage.
“You’ve got a very generous benefits plan,” Cox said.
The study raises several issues the City Council will have to decide. When it set its budget for 2017-18, the council set aside $2 million for adjusting salaries, knowing it had the study underway.
Cox said the company estimates it will take $1.5 million to bring all employees up to the minimum salary it found is average in the market.
An emerging issue is health insurance costs. Lee’s Summit expects a 20 percent hike in its health insurance premium this year, at least partly because it’s had some expensive claims.
The city had budgeted for a 10 percent increase and will have to decide how to make up the difference, said Nick Edwards, director of administration.
One possibility is to ask employees to start paying a share of their insurance, Edwards said. Or it could use some of the $2 million set aside for the adjustments, he said.
Councilman Rob Binney asked if the study took into account the quality of life offered in Lee’s Summit or the city being a good workplace. Cox said that couldn’t be quantified, but added that the employee survey indicated those were important factors to the city’s employees.
The draft call includes a “compensation philosophy” that calls for wages and benefits to be competitive — neither leading or lagging behind other cities, Cox said.
About 93 percent of jobs would have increased minimum pay.
The council also is looking at starting a “step” plan for giving raises. Currently raises are based on a merit increase within a range for each job description. A step plan could put more emphasis on tenure.
“Am I going to choose the one where I see a defined career path and specified increases over time? Absolutely,” Cox said.
A step-scale system can put upward pressure on personnel costs over time.
Kris Presnell, president of International Association of Fire Fighters Local 2195, said employees and the unions are watching the proposals in the study with interest, particularly the salary structure.
He said that while Lee’s Summit’s benefits are superior in some respects, other communities have packages that are better in other ways. He said the city still needs higher wages.
“I don’t feel like it makes up the difference,” Presnell said. “Most new employees will look at salary. It’s what gets them in the door.”
Presnell said a significant issue is how long it takes for fire department employees to move up the pay scale. In a nearby fire district, firefighters move from the starting salary to the top in five years, where in Lee’s Summit it would take 25 years.
Representatives for the machinists lodge and the Lee’s Summit Police Officers Association could not be reached for comment.
The council is expected to discuss the final report this summer and decide on its compensation policy. The city’s intent is to implement the pay adjustments in September for non-union employees. It would begin negotiations with the collective bargaining units.
“I think our biggest challenge as a council is our philosophy and where it’s going to go,” Councilwoman Diane Forte said. “We all have to get on board on what we truly want as a philosophy.”