Lincoln City Council
Aldermen consider implementing a “CPI plus two” plan for wage increase for non-union employees

 

[January 30, 2025] 

At the Tuesday evening Committee of the Whole meeting of the Lincoln City Council, aldermen once again took up a discussion on compensation for non-union employees.

This is to be an ongoing discussion possibly for another C.O.W. meeting or more, with a goal of having a solid plan by the time the council’s budget committee sets to work on outlining a budget for the 2025-26 fiscal year.

At the last C.O.W. the discussion focused on rewarding non-union employees for years of service with a plan noted as being “Longevity Pay,” introduced by alderman Kevin Bateman. It was a starting point for the conversation and one that was not all that well received by some of the aldermen. But, as the conversation of that meeting proceeded, it was agreed that the council needed to come up with a structure that would address pay scales according to job descriptions and merit.

In the past, Bateman had noted, the discussions became more focused on individuals instead of jobs or positions within the city structure. Coming up with a structured plan would help eliminate that singling out of particular people.

This week, Bateman began the conversation but quickly turned it over to Mayor Tracy Welch, who had presented an alternative plan that was more focused on job description and merit than longevity.

Welch said his suggestion was being called an Annual Salary Increase Policy for Non-union Employees. He said he would run through the high points then open the floor for discussion.

Welch said the policy would begin with a call for performance reviews for employees. He said he liked this not just for the non-union employees but for all employees of the city. He said that evaluations such as this gave employees an idea of where they stand and makes them aware if they are considered to be excelling in their positions, or are lacking and need to do better.

The outcome of an evaluation can also be helpful to the department heads if they are partially basing wage increases on merit.

Welch said the basis of the wage and salary for employees would be determined and then annual raises could be led by the Consumer Price Index (CPI). He explained that using the CPI seemed reasonable because that is an official percentage that indicates how much the cost of consumable products has risen over the past year. This includes food, rent, utilities and much more, which basically is what employees have to pay for with their paychecks.

Welch said he had gone to the Bureau of Labor Statistics website to find the CPI as of the first of the year and came away with a figure of 3.2%. Welch said he had exchanged emails with Alderwoman Wanda Lee Rohlfs who using a different source said the CPI in the Springfield area for the first of the year is at 2.7%. Welch said there would be a decision to be made as to where to get the information, and then it would stay consistent.

Welch said along with the CPI he would propose a “plus two” that would add up to 2% to the increase based on merit. Therefore based on his 3.2 figure plus the two percent, the potential increase for an employee would be $5.2%. Welch said that the council had talked about giving the department heads the ability to implement pay raises to their individual staff members based on job performance. Therefore the 5.2% would be the amount entered into the budget, but the department heads could determine the actual increases.

This would enable lighter increases for adequate employees and heavier increases for those who were excelling or working above and beyond their job descriptions.

While the department heads could determine the raises, Welch said it would draw a line that no employee would be given less than the annual CPI.

Welch noted that with a plan such as this, the council would get away from talking about specific employees. He noted that has been the case in the past and that the employees did not appreciate it.

Welch said that he was providing a spreadsheet to go along with his recommendation that would illustrate the increases in the specific budget lines department heads would use to determine wages paid and the CPI plus two plan. The council would then have the task of approving the line item and the department heads would distribute the increases.

Welch went on to say that he felt this was fitting. The department heads are entrusted with their share of the budget, they are the supervisors of their employees, and they should be empowered to do the evaluations and implement increases without the policing of the city council.

Another recommendation from Welch was that a wage range be established for each job description for the starting wages. He said there could be a low figure and high figure for starting pay then the job could be offered at a specific amount within the range based on the applicants resume’.

When Welch invited comments Bateman was the first to speak saying he could agree with everything but had one suggestion. He feels the new policy should include a cap. He said with the CPI plus two plan, the CPI which fluctuates could go high like eight percent or more, then add two percent on to that is quite a lot. He suggested that the increases include a cap of for example “not to exceed 5 percent.”

Bateman also suggested there was an issue for employees of a lack of job security because they are working for elected officials. He noted that when Peggy Bateman was elected to City Clerk, two employees stayed, and two employees did not.

Welch said there are some issues there that are maybe part of a separate discussion. He said for example some employees are hired at the will of the department heads while some are hired at the recommendation of the mayor. He said he didn’t feel the mayor should be hiring for the departments.

He said there is language that does need to be cleaned up regarding terms of employment running concurrent with terms of office. He said he didn’t believe employees should have to worry about job security. He went on to say that the discussion at hand was not concerning this situation and he wanted to keep it clean by talking only about compensation.

Discussions went on to the CPI and the fluctuation of that number from year to year. City Treasurer Chuck Conzo said it was possible for the CPI to exceed five percent. If it did, what would the city then do would they add two percent onto that? Welch said that was an issue that perhaps would have to be addressed. He said his suggestion for now was to take on the CPI plus two with a cap of five percent and try that for a year or two and see how it works out. He added that the goal is to make sure that no employees fall backward because then when those salaries drop below comparable wages in the region it is a big job to get the wages caught up. So yes, if the CPI was greater than the total cap of 5 percent, that would need to be looked at.

Rohlfs noted that the CPI information she had reflected the cost of living in the Springfield area. She said this was important because Springfield along with Bloomington are the locations where Lincoln employees could be looking for jobs that pay better. So if the CPI plus two is initiated that gives the employees a promise of at least a minimum annual increase. She acknowledged that the figure she came up with was lower than Welch’s and asked if the council could see a comparison of what impact the 3.2 versus 2.7 would have on individual salaries. Otherwise, she said she felt the plan was good and would benefit the city and the employees.

Alderman Craig Eimer noted that the plan includes a cap at five percent but that it was also possible that several employees would receive that full five percent. He asked Conzo if the city could afford those kind of raises. Conzo said that in past years he would have been concerned, but he is seeing the city going in the right direction with its budget and the economy and as of right now feels the city can afford to implement an up to five percent increase for non-union employees. It was also noted by Welch that this policy would now extend to department heads who are non-union as well.

Alderman Steve Parrott spoke of the very long term impact of a five percent annual increase. He said an employee starting at $36,000 per year over 27 years would earn increases that came to an annual salary of $128,000. He said the city should decide on a salary cap for the job description.

Welch said that was the reason he would recommend a salary range for a job description. He said a compensation study gathering regional information about wages per job description would be helpful in determining caps for Lincoln.

Discussion of the CPI plus two plan will carry over to the next Committee of the Whole meeting. While several aldermen expressed they felt the plan was solid and good, there are additional facts and figures that will be presented, and tweaking of the language including setting in the language the official source for the CPI percentage.

At the end of the night, Welch said he felt that the plan was a positive step forward with a few benefits. He said that the plan was going to be empowering for department heads and appropriate that those people should be able to make salary decisions. In addition, he said that in the last few years there has been a lack of confidence in the council on the part of some employees, because of the way wage and salary increases were addressed. He said he felt that adopting a plan and putting it in writing would help increase trust with the employees in their employer.

Welch said he would like to see the topic settled at the next C.O.W. so it can go to vote and be in place before March 1st when the budget committee generally starts working on the budget for the new fiscal year.

[Nila Smith]