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Raises coming for Lebanon city employees

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1.5 percent for all, higher minimum wage and bonus

To keep good employees working for the City of Lebanon, the proposed $25 million city budget for the upcoming fiscal year contains three types of raises - an across-the-board 1.5 percent pay increase; a minimum starting wage of $11 per hour for new full-time employees; and a $200 hike in the year-end annual bonus for all city workers, from $300 to $500.

There's even a slight, $120 per-month increase for Lebanon City Council members, from the current $630 to a proposed $750.

Included in the first City of Lebanon budget in years that's "in the black" -taking in more revenue than it spends - the raises create "a win-win-win situation," Ward 3 Councilor Rob Cesternino commented at the budget work session Thursday night where City Finance Commissioner Robert Springer and Human Resources Director Sylvia Reichle unveiled the proposed raises.

The budget will be balanced for the 2015-16 fiscal year because city department heads have cut the city's overall spending by 5.3 percent while revenues from sales taxes and other sources are expected to increase by about 3.5 percent, Mayor Philip Craighead said - and those favorable cash flows will make the proposed raises possible.

City pay 'next to last' in study

The raises are needed, Reichle said, because a study she conducted shows that the City of Lebanon ranks 10th among 11 of its closest neighbors, coming in next to the lowest for both its average department heads' salaries and its average employee salaries, excluding those of department heads.

According to Reichle's study, the average department head in Lebanon makes $76,538 per year, compared to Murfreesboro's average of $105,043, Brentwood's average of $103,067, Hendersonville's average of $101,375 and Franklin's average of $101,161 - the four top-paying cities in the survey.

Only Shelbyville, at $70,210, has a lower average department head pay than Lebanon does, Reichle's study indicates (for ease of reading, these figures have been rounded to the nearest dollar).

Lebanon's mayoral salary, at $81,785.60, is roughly $36,300 lower than the average for all 11 cities, which is $118,578. The mayor is the third highest paid administrator in the City of Lebanon, trailing the city attorney's $102,315.20 and the public works commissioner's $86,944 per year, according to the study.

However, even those salaries trail those of the 11 cities in Reichle's study, which pay their city attorneys $105,642 on average and their public works commissioners $93,622.

Lebanon workers average $37,889

Among average salaries for city employees excluding department heads, Lebanon's $37,889 only trails Shelbyville's $37,832, placing Lebanon employee salaries about 22 percent lower than the area average for comparable cities, Reichle told the council.

Put another way, Lebanon ranks 10th out of 11 cities, "and we're only $60 away from being number 11," Cesternino said.

The four top-paying cities in Reichle's study for employees other than department heads are Smyrna, averaging $55,280; Hendersonville, averaging $53,580; Brentwood, averaging $49,575; and Murfreesboro, averaging $49,199.

'Lower than Mt. Juliet'

In Wilson County, the City of Mt. Juliet pays department heads an average of $86,656 - or about $10,118 more than Lebanon pays - and pays its other employees an average of $47,095, or about $9,025 more than Lebanon does, Reichle's study indicates.

In answer to a question from Ward 6 Councilor Kathy Warmath, Reichle said she selected the cities for her study based on their proximity to Lebanon, and she also tried to select cities with comparable populations, using data from the 2014 compensation survey conducted by the Metropolitan Technical Advisory Service (MTAS) at the University of Tennessee - plus additional data from the cities' websites.

Murfreesboro, with a population of 117,044 compared to Lebanon's 28,408, was included in Reichle's study because it's so close to Lebanon, but Nashville Metro was excluded because it's incomparably larger than Lebanon, she added.

"I picked the ones that are our competition for talent," Reichle explained. "If somebody's underpaid here, and they're looking for a job, who would they be looking to go work with?"

The smallest city in her study is Goodlettsville, with 16,813 residents, and the second largest after Murfreesboro is Franklin, with 68,886.

Shelbyville, closely trailing Lebanon in the averages, has nearly 8,000 fewer people than Lebanon does, and Mt. Juliet - with 28,222 - is almost the same size as the Wilson County seat. The entire list of studied cities includes Brentwood, Cookeville, Franklin, Gallatin, Goodlettsville, Hendersonville, Lebanon, Mt. Juliet, Murfreesboro, Shelbyville and Smyrna.

A few high points from Thursday's budget work session include:

  • No major changes in the donations budget, but $5,000 was added for the Pickett's Chapel restoration fund at the request of Ward 2 Councilor Fred Burton, and $5,000 for Prospect, Inc., at the suggestion of Mayor Philip Craighead.

  • The proposed donations budget already included a $1,500 increase to $2,000 for the Beautification Commission and $7,500 to fuel the Eternal Flame at the Wilson County Veterans Plaza.

  • $45,000 is included to purchase an SUV for the Mayor's Office.

  • $81,121 is budgeted to start repaying the liquor taxes that the city was required by state law to share with the local school district but - like many other cities and counties in the state - overlooked.

  • The budget calls for an administrative surcharge of 1½ cents per gallon when other government agencies such as school districts and the Mid-Cumberland Human Resources Agency (MCHRA) purchase gasoline from the city, which it currently is selling at cost.

  • An increase in the one-time business license fee from the $15 that has been charged for decades to $40 for new businesses expecting to hire 50 employees or fewer, and $75 for new businesses expecting to hire more than 50.

'Lower pay hurts retention'

But the salary comparisons are not simply interesting trivia. The city's lower pay scales pose a threat to the quality of service that city residents get for their tax dollars, Reichle told the city council.

Reading from her study, Reichle said, "It negatively impacts employee job satisfaction and work performance as well as recruiting efforts to bring in top talent and the city's ability to retain top talent."

It costs 20 to 30 percent of an employee's annual salary to replace that employee, she added, due to a variety of costs ranging from advertising, background checks, drug testing and pre-employment physicals to training.

"We recently lost a very good employee to Carthage," Springer noted, and Warmath added, "I know we've lost a lot of law enforcement to the county."

The proposed pay increases to deal with the city's retention problem have not been approved by the city council yet, which heard about them for the first time at Thursday's work session, which will be the last one addressing the budget, Springer said.

Raises 'already built in'

But the pay increases are already built into the proposed budget that the council has been discussing - and to approve them, councilors will simply have to approve the budget in the three readings that a city budget must undergo, according to state law, before the current fiscal year ends June 30.

"It's already in the budget, and the budget's in the black, and these changes are included in it," Springer told the council.

Some of the increases overlap, however, he said. The $1 increase in the minimum starting wage for new hourly employees - from $10 to $11 an hour - is really a raise to $10.84 per hour that, together with the 1.5 percent across-the-board increase, will come to $11, Springer explained: "The two dovetail together."

The $200 increase in the year-end bonus for all employees will compensate for the lesser impact that a percentage raise has on lower-paid workers, Springer added. The higher bonus won't mean as much for higher-paid employees, he said, but "we're trying to look after those folks who have a lower rate per hour. This would have a larger impact for them."

Higher pay is incentive now

One way the city has become able to improve its pay scale is that through various tweaks, it has cut its health insurance costs by $960,000 - and insurance costs had become burdensome, according to Springer. But "it's a two-pronged deal," necessitating better pay to make up for the insurance changes, Springer added.

"If you don't, you're not going to remain competitive, and you're not going to be able to keep outstanding people," he explained to the council. "In the '90s, it made sense to tell people, we're not going to pay you so well, but we're going to give you outstanding health insurance. The only trouble is, we kept doing it even after it stopped making sense - after insurance costs skyrocketed."

"A lot of work went into this," Cesternino responded, adding, "and I want to give Fred credit," referring to Ward 2 Councilor Fred Burton. "This was Fred's recommendation that got the starting wage up to $11 an hour."

Mayor Craighead, likewise, seemed pleased with the proposed balanced budget. "People are saying we're going wild and spending money like crazy," he told the council. "You can say, we've reduced the budget even with all we're doing."

Writer Connie Esh can be reached at

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#Government, budget, department heads, employees, Lebanon, mayor, Mt. Juliet, raises, taxes, Wilson County
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