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Wendy Reuer, Published April 29 2013

Study shows Moorhead city employees make less than regional average

MOORHEAD – City employees here make about 5.7 percent less on average than employees with similar jobs in other cities across the region.

Springsted Inc. – a St. Paul-based consulting group commissioned by the council last July to study staff salaries – found the variances by comparing the salaries to other cities such as Mankato, Minn., Bemidji, Minn., Fargo, East Grand Forks, Minn., and Cass and Clay counties.

On Monday, Sharon Klumpp, senior vice president of Springsted, recommended the city increase salaries in 2014 by 2 percent and allow a 3.12 percent step increase for those eligible to align the city more evenly with the job market.

The study showed that based on 2012 salaries, 207 employees would be within the study’s proposed pay ranges, while 42 employees would still fall below market average.

“You don’t have any employees that are above (proposed market rates), and that’s good,” Klumpp said.

Klumpp said the 2 percent increase in 2014 would cost about $253,779. To increase those eligible for a step raise, it would cost the city an additional $395,894.

The city uses a system of step increases based on experience and performance for raises. The structure of Moorhead’s pay plan is comparable to other cities and counties, Klumpp said. Moorhead’s step increases are 3.12 percent compared to an average step increase of 4 percent, according to the survey.

Finance Director Wanda Wagner said Monday that 69 percent of the salaries that are less than the minimum average are paid for by tax dollars.

“When you get to bringing employees to the next step, about 78 percent are paid by tax dollars,” Wagner said. “So you can definitely see that the bulk of any increases are in tax-supported funds.”

Assistant City Manager Jill Wenger said a significant number of city managers and professionals have not had a step raise in the past five years.

Some of the increased cost could be offset by population growth and Local Government Aid, which the state government determines, Councilman Mark Hintermeyer said. The Minnesota Legislature has not yet finalized its 2014-15 budget.

“There are a number of things competing with salaries in the city, (such as) bond payments, and we have street repairs that have gotten behind,” Councilwoman Nancy Otto said. “I think we’ll have to take a balanced look at the whole picture to make sure we get a complete look.”

The council took no action on the study Monday but plan to discuss it at a May 21 council retreat.

“Our staff members have bent over backwards for us during those tough economic times,” Councilman Mike Hulett said “Even though we may have relatively low turnover, I think we as a council really need to dig in and find a way to reverse these variances.”

The last time the city conducted a similar survey was in 2004; a limited survey was done in 2009.

Readers can reach Forum reporter Wendy Reuer at (701) 241-5530