Council debates formal pay policy for nonunion staff; leans toward CPI-based formula with merit pool

Alderman Matt Bateman and Mayor Tracy Welch led a lengthy discussion on Jan. 28 about a proposed annual salary-increase policy for nonunion (noncontract) city employees intended to provide more predictable, merit-based pay adjustments.

Bateman said the goal is a transparent policy that sets a baseline cost-of-living adjustment and gives department heads a small, fixed pool to award merit increases. He proposed using the Consumer Price Index (CPI) as the baseline and adding a fixed “plus” percentage (he suggested 2 percent as a starting point) that department heads could distribute based on performance reviews.

Key elements discussed: - CPI source and timing: Council members discussed using the Illinois CPI (or IDOR data) versus the Bureau of Labor Statistics national CPI and agreed the policy should lock in whichever source the council chooses so results are consistent. - Fixed merit pool: Bateman proposed adding a fixed percent (example: CPI + 2%) available to department heads to reward individual merit without reducing other employees below CPI. Several council members suggested capping the total increase (CPI plus the merit pool) at 5 percent to limit year-to-year budget swings. - Performance reviews and schedule: The draft calls for a performance-evaluation process and a March 1 deadline for completion; the council agreed department heads should complete evaluations and allocate merit funds, with the council approving budget line items rather than individual employee percentages. - Compensation study: Council discussed commissioning a market compensation study (estimated cost in past work ~ $7,000) to establish salary ranges and better starting/top-out pay bands; the committee suggested that study be considered next year as a one-time expense.

Budget impact: Bateman presented sample calculations showing that a 2.7 percent baseline increase across the identified nonunion line items would increase personnel costs by approximately $30,000 for 17 employees; using a 3.2 percent baseline would increase costs by about $36,000. Council members discussed capping the total at 5 percent in higher CPI scenarios.

Outcome and next steps: Council members generally favored adopting a CPI-based baseline plus a fixed merit percentage (the committee discussed IDOR CPI + 2% with a 5% cap) and asked staff and the city attorney to draft final policy language. Department heads will implement performance reviews and return with budget line-item numbers in time for budget hearings. The council directed staff to return a revised policy for formal consideration.