Consultant recommends anchoring Newton pay scales to 60th percentile; commission asks for budget options

Newton — Melena Halverson Mays of McGrath Human Resources Group on Thursday presented a final compensation and classification study to the City Commission of Newton, recommending the city anchor its salary schedule to the 60th percentile of comparable jurisdictions, restructure pay grades and standardize longevity and certification pay.

The recommendation matters because the consultant said the changes would make Newton more competitive for recruits and address turnover and compression in the current pay structure. Mays and city staff told the commission they will provide additional budget scenario details at the next budget work session so commissioners can decide how, and whether, to implement the changes.

Mays told commissioners the study reviewed Newton’s classification system (job titles and hierarchy) and compensation system (how salaries are assigned to those titles). She summarized workforce demographics and turnover: the city’s average tenure is 8.4 years (compared with a national local‑government figure cited in her presentation), about 14% of employees are age 55 or older, roughly 50% of the workforce is under 40, and resignations accounted for roughly 62% of turnover in the recent three‑year period while retirements accounted for about 14%.

On structure, Mays recommended keeping a step model that is familiar to employees but updating it. Her proposal would: expand Newton’s pay framework from 17 to 21 pay grades; reduce steps from 15 to 13 while retaining a 3% step value; compress the overall range to about a 43% spread; and anchor the salary schedule to a market reference placed in column/step E. She also proposed placing employees at the nearest step without reducing anyone’s pay, and holding pay for a few employees currently over the proposed maximum until the schedule catches up.

Mays recommended policy changes including: stop using step progression to pay for certifications and instead adopt a limited, organization‑wide certification supplement; standardize longevity pay to a single dollar amount per year of service (her draft recommendation was $50 per year) and consider whether longevity is paid annually or held and paid at multi‑year intervals; and adopt a consistent economic indicator (for example CPI or CPI‑W or a rolling average) and apply it to band adjustments on a recurring basis.

On timing and implementation she told the commission: "Implementation would occur on Aug. 1," and described a placement process meant to avoid involuntary pay cuts. Mays also described an in‑range adjustment formula tied to years in position intended to reduce compression where long‑tenured employees are paid near peers with much less service.

Cost estimates were discussed but presented as multiple figures in the presentation. Mays said a one‑time fiscal cost starting Aug. 1 for the recommended market alignment would be roughly $272,795 in the current fiscal year; she also cited alternative figures later in the presentation. The finance director provided further cost options and told the commission the 2026 payroll baseline (including benefits) was about $25,322,691 in the city’s preliminary estimate. Mays recommended Newton consider a 3% cost‑of‑living adjustment for the next budget year to keep pace with market movement; she told the commission her modeling showed a 3% COLA would add roughly $205,000 to the baseline, and that adopting the consultant’s recommended alignment plus a 3% COLA would increase payroll costs further (figures presented during the meeting included additional amounts in the hundreds of thousands of dollars and a larger scenario stated as $1,300,000 for a broader alignment option). The commission and staff noted the city has already budgeted for a salary study amount (the figure cited in the presentation was approximately $398,495) and that there is a roughly $125,000 margin between that budgeted amount and the lower cost scenario Mays discussed.

Commissioners and staff asked for more targeted budget information before making a decision. Requests included a point‑in‑time calculation showing how the cost figures would change if current vacancies were not filled, a five‑year payroll projection showing the effect of different COLA and alignment choices, and a rolling average of vacancy rates and the budgetary delta caused by vacancies. Staff committed to return with those data at the commission’s next budget work session on the 24th at 5:00 p.m., according to the meeting discussion.

Other consultant recommendations and findings presented to the commission included: - Roughly half of Newton’s benchmarkable positions already align to the market percentile; the other half would require adjustments to reach the target. Mays reported about 50–57% of positions fall at or near market depending on whether minimum, midpoint or maximum comparisons are used. - Incumbent pay analysis showed about half of benchmarks have incumbent wages below their counterparts, which may reflect recent hires who have not progressed within ranges. - The city’s current step separations vary widely; Mays recommended more consistent separations between grades (7–10% between grades in the proposed model) to reduce compression and allow career progression. - Benefits analysis in the final report shows Newton’s PPO plans compare favorably to market benchmarks; Mays identified an opportunity to reconsider employer contributions to the high‑deductible health plan and to evaluate whether to restore or add an employer HSA contribution.

Mays also urged the city to treat “total rewards” — compensation plus benefits, professional development and workplace practices — as part of its strategy to retain and recruit staff. Specific ideas discussed included adding a floating holiday, revisiting the city’s wellness pay program, and offering tuition reimbursement or voluntary retirement contribution matches as longer‑term options.

No formal action or vote was taken at the meeting. Commissioners praised the work and directed staff to provide the additional budget scenarios and vacancy analyses at the next work session so they can consider phased or combined approaches (for example, partial percentage increases combined with COLA adjustments) to reach a competitive market position over multiple budget cycles.

The consultant reiterated that the city can phase toward a higher market position over several budget years, saying it is common to add a percentage point or two above COLA in consecutive years to move the organization toward a chosen percentile. The commission scheduled follow‑up budget work session materials and analysis but made no final decision.

Quotes used in this article come from the meeting transcript and are attributed to the speakers who made them.