Staff photo by C.B. Schmelter / Vehicles drive along the W Road on Monday, Oct. 12, 2020, in Signal Mountain, Tenn.Property taxes could go up next year if the Signal Mountain Town Council decides to implement recommendations made by its personnel committee to give some town employees significant raises.
The committee's recommendations are based on the results of a compensation study conducted by Burris, Thompson and Associates at the town's request to help address issues with attracting and retaining employees, particularly in its fire and police departments.
At a special meeting called Tuesday to discuss the study results, Steve Thompson of Burris, Thompson and Associates told council members that the most concerning finding is that one-quarter of employees are paid less than 82% of market rates.
"That, to me, is the problem," Thompson said. "Unless they were hired yesterday, that's too low."
Market rates are an average of the median rates in the public sector, determined using salary data from 13 Tennessee cities, counties and utilities; and median rates in the private sector, determined using salary data from Hamilton County businesses. Population is also factored in when determining market rates for department heads.
Employees paid below 85% of market rates who have been in their jobs for at least three to four years are considered underpaid, according to the standards applied by Burris, Thompson and Associates when making recommendations to the town.
The consultants created an entirely new pay structure for all employees - approximately 70, not including seasonal part-time workers - with 15 pay steps for each position. Each step increases the employees' pay by 2%, and employees who meet the minimum requirements of their job are moved to the next step each year.
The sixth step is market rate, which is typically reached after five to seven years on the job.
The 2% increase is considered conservative, as the average projected pay increase employers across all industries have budgeted for 2021 is 3.1%, Thompson said.
His recommendations were for the town to raise all employees' salaries by 4%, and then put each employee at the pay step closest (but not lower) to where they need to be. Some employees were moved up additional steps based on tenure.
The town's personnel committee agreed with those recommendations, along with additional step adjustments for 18 employees to reduce pay compression among supervisors and subordinates.
The cost to implement the new pay structure as recommended, plus the cost of benefits, is $330,692. That excludes the amount already earmarked in the budget for step increases employees would receive under the current pay structure.
If nothing is removed from the current proposed budget, a 10-cent property tax rate increase would be required to cover the cost of implementing the recommendations in the coming year.
That would be an increase of 6% over the current certified tax rate of $1.6412 per $100 of assessed value. Property tax on a $300,000 home would go from $1,230.90 to $1,305.90.
The council is holding a special meeting at the town hall Saturday at 8 a.m. to discuss the budget and how to implement the pay structure recommendations.
Councilors Dan Landrum and Vicki Anderson said they would like to implement the personnel committee's recommendations as presented.
"I think we have a responsibility to the employees of the town to do that and to the citizens, because we have people who are doing great jobs who are going to quit," Anderson said.
The first reading of the budget will be at the council's regularly scheduled meeting Monday at 6 p.m.
Contact Emily Crisman at ecrisman@timesfreepress.com or 423-757-6508.