Special Study Session- Budget

May 23rd, 2024

This is long but worth the read….

The meeting was called to order and the agenda was adopted. A proclamation was made recognizing the students from both White House High School and White House Heritage joining the military.

There were a couple of students missing. All branches of the military were included in the proclamation with exclusion of the Coast Guard. The city thanked them all for their willingness to serve their country.

City administrator Herman spoke to the budget first. He was reading off of a sheet, and I could not follow all that he said. He was introducing the budget and discussing the timeline of how things will be voted on. The first reading of the budget at the board meeting will be in June.

The budget ordinance was opened for discussion and Alderman Matthews began. Before passing this budget he wanted to discuss the pay study that was completed. It was presented to the board, but they didn’t have the final report. He feels that it is important to discuss this. Matthews wants to be sure that the city pays its employees fairly and competitively, but has some concerns with this outside consultant. He reviewed the study and it was not discussed at the budget retreat. Many of the peer cities that were used had much larger populations and very different demographics. Hendersonville was used (64k), Springfield (58k), Lebanon (43k), Fairview, Nolensville, and Dickson to name a few. Lawrenceburg is closer in size to White House, but it was not used. Matthews asked for the raw data from the company and it looks like smaller cities did not respond, and some areas were incomplete in reporting the number of responses. For example, in one area the study reported 11 respondents, but in the raw data there were only 7. The larger cities tended to skew the numbers. (It gets hard to follow here without the study in hand. I do not have the study) The critical factors are the percentiles. The percentiles work fine unless the cities are different. The step program in the study didn’t mention which other cities are using it. The consultants said we are under paying by 20%. However, when Matthews looked at the salary ranges in the study, they had scaled back the spread by 60% and didn’t use the actual salary range. White House is currently on a 30 year step program. Matthews looked at other studies in other cities with 30 year step programs, and the consultants did not recommend the change to a 20 year step in those cases, but did here in White House. He also noticed that ranges weren’t used for some of the positions and some salaries were raised $10k or more out of the salary range. He also found mistakes in the data. The consultants were supposed to look at benefits and salary. The benefits were supposed to be weighted in, but that summary was not provided. White House offers 13.35 hours of accrued vacation a month, the comparison cities only offer 6.4 hours. White House has health insurance for retirees, peer cities do not. The biggest issue is that this study impacts not only this year, but every year going forward. There is no long term financials with this pay increase. The cost of implementing this over the long term has significant reoccurring costs. Compensation is important, but we also have a financial responsibility to the citizens. Mayor Corbitt weighed in. This was the first study the city has ever done. You could probably poke holes in any study. The peer cities are not chosen with just population in mind. We are competing with Hendersonville for employees. We can do this again in 7-8 years if necessary, but this is a good first step. He also called other cities and spoke with their mayors. The board is generally not involved with pay studies. Matthews thinks that is a mistake. Herman added that this isn’t new. The city wants good employees. They felt that the larger cities needed to be included because we compete with them. As soon as we complete this study, Springfield and Gallatin will do one as well. This company does these studies every day, there might be flaws, but when Herman got to the city there wasn’t even a process for this. The quality of the city is good and that is a result of good department heads. We have millions of dollars in programs that they are responsible fore. Should the study have looked at health care differently, maybe? The board was not involved because they didn’t want the board to be in the weeds looking at individual pay raises. There were some questions raised on a few, but they didn’t want to change the formula for each employee. There were credits given for years of service and years with White House. For example, the police chief received a lot of credit for his service. He went to the top with 20 years of service. He moves up faster but that tops out. Next year there might be a cost of living along with the steps, but we are unsure at this point. Overall, we need to accept the plan as given. Matthews responded that he was not going after any particular employee, it’s more that the ranges are the issue. Alderman Spicer added that no one on the board is a compensation expert. We counted on the company and we voted on it. You had an opportunity to ask questions. Matthews responded that he can ask questions whenever he likes. Spicer said you didn’t ask along the process, and we actually compete against Nashville. She doesn’t want a shortage like they have in Nashville, she believes in supporting employees. (this exchange was heated)

Alderman Silver then spoke. She too looked into the study like Matthews. She didn’t ask questions in the budget review until after she saw the numbers. There is an extra $902k in salaries. All department heads have their budgets, but they were all separate. Silver had to look at all 18 budgets to try to find the bottom line. It was either $902k or $1.2 million. We paid $35k for the study and it was useful. When it was presented, she heard numbers such as $125 or $95 for increases. After the pay study was presented, an anonymous letter was sent to the city disappointed that the department heads were getting 25% or more raises, and in his/her department it was one employee getting the raise. Silver looked at the raises, there was a 21% increase for salaries. When she looked at the positions, there are people over 5-20 years. When Silver reached out to HR to explain some of the increases, the explanation was lacking. For example, she questioned one of the salaries that didn’t get enough responses in the study to formulate a range so they used an “internal” scale. HR could not explain where the numbers came from. While yes, our employees could go to Hendersonville, Silver reached out to Evergreen, the consultant company with questions, and then to the city administrator. Herman said the mayor did not want a meeting about this study. As Silver looked deeper, 18 employees got $317k which was 41% of the money for the increase. Two employees didn’t get a raise at all. Some of the increases were 59% and 48%. There were $57l, $31k, and $40k annual increases. That’s every year for the rest of their careers. The top ten people are getting $295k in raises, 33% of the increase. Only 55 employees got a raise, and 48 didn’t. There were recent hires that were hired at market rates, but Silver found an employee with 30 years in the same position and no raise. Another with 14 years, no raise, one with 6 years, no raise. Maybe there were other things taken into account with those employees, but Silver is not sure. One employee getting ready to retire is getting a 28% increase. The other thing Silver found is that Evergreen based all of their numbers on where the market is “trending” not where they are today. We cannot pay based on trends. We did pay for the restructuring, but our benefits package is a lot better than others around us, it is generous. The other issue is that this increase was presented to the employees before the budget was approved. This is not responsible or feasible to fix pay issues in one fiscal year. In over 40 years as a CPA, she has never seen these types of raises. This started as a fire department pay study is what she thought. She wants the employees paid well and wants them to want to work, but this is a big increase and it should be spread out over years. Herman added that the department heads didn’t make the decisions, it came from the study and that the bottom of the pay scales has been moving up for years. To focus on the $1.3 million in pay study when there is $11 million in road projects seems wrong. This study has been stressful. Silver stated she asked for more information. Herman said the budget has to be done by June. Matthews asked if it can be delayed until October. Finance director Barnes said he could look into that. Silver said that the optics on this are not good. Corbitt added that they are in an odd spot now that the employees know. Alderman Wall finally spoke. He has worked or owned four different businesses, and the key is retention. We compete with both the public and private sector. Last year we lost 12%. When you lose employees you lose cohesiveness. He has no problem with the $1.3 million increase. He admires the employees and feels there are more important things to argue about in this big budget. He would like to see all employees stay. Maybe some of the employees that left would have stayed with more money.

Matthews moved on to the new signs in front of the library. He thought there had been discussion on just one sign versus two. Herman said because of how the corner is laid out, the architect said two signs were still warranted. Matthews also said that in the next budget there needs to be more money for paving. We have a $24 million rec center and no extra money to pave the roads. We need to play catch up. Maybe when the census is done. Also, the gaming room at the rec center, it looks like they are slated to spend $125k on equipment. Can costs be reduced there? Spicer said it was discussed at the leisure service board meeting. Corbitt added that repaving needs to be revisited. Herman said they have not been able to keep up. This year there was $500k for repaving. Without adding the new road projects, they could have repaved a lot of roads, but paving costs are up too. There are some serious issues out there and next year the budget will need more money to repave. Matthews asked public works to come up with a number and bring it to the board. Herman added that next year they can identify issues and add the money to the budget. Wall stated that the road impact fees account needs to be built back up. The budget was approved. Corbitt, Spicer, Wall, Yes. Matthews, Silver, No

These are screenshots of the salaries in the proposed budget. I did not include the legal section. They have an employee retiring and are not replacing that position. It will be absorbed into the finance department.

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