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Staff recommends 3% hybrid pay increase to lift most city employees to living wage
Summary
City staff recommended a hybrid compensation option that would move the most employees above the local living wage, reducing the number of employees below the threshold from about 151 to roughly 84; the recommendation would increase the property tax rate unless one-time FEMA loan funds are used.
City staff recommended a hybrid compensation approach at the Asheville City Council budget work session that they said would lift the largest number of employees above the local living-wage threshold while addressing compression for public-safety pay plans.
Lindsey Spangler summarized the options the city considered: an across-the-board percentage increase, and a hybrid where employees below median pay receive a larger flat adjustment while those above median receive a percentage. Staff recommended the 3% hybrid scenario as the option that would best move lower-paid employees toward the living-wage threshold calculated by Just Economics.
Spangler said the city currently has about 181 employees listed below the Just Economics living-wage figure, but 30 are trainees in police and fire who will move out of that bucket upon graduation, leaving about 151 employees below the threshold. Under the recommended 3% hybrid scenario staff estimated the number below the living-wage threshold would fall to about 84 employees.
Staff also tied the recommended compensation package to the earlier revenue discussion: depending on the compensation package chosen, the tax-rate increase was estimated to range from about 5 to 6 cents; if the city receives the FEMA CDL and applies it to the gap, the corresponding tax-rate impact would fall to an estimated 2.6 to 3.3 cents. Tony McDowell provided the combined tax-rate slides and said staff—s recommended approach would balance living-wage progress with fiscal constraints.
Council members asked for more scenario modeling and noted the community's current economic stress as a factor in weighing tax-rate changes. Several council members signaled preliminary support for the hybrid option but said they would want to review the manager—s proposed budget with final numbers.
Ending: Staff asked for council direction so they could produce the manager—s proposed budget in early May; several council members asked staff to continue looking for additional revenue and to present options that would limit the near-term tax-rate increase while advancing living-wage goals.
