Council Inks Employee Pay Reduction Deal

OCEAN CITY – The tables turned this week as the Mayor and City Council came to a complete agreement on an ordinance to change the pay scale for newly hired town employees.

One of the ordinances proposed last year by the council in an attempt to lower costs for the town was to change newly hired town employees’ pay scale to a salary scheduled based on a 2005 Hendricks Study Chart, with no movement in the cap without approval of Mayor and City Council, excluding returning seasonal employees unless promoted to a higher pay level.

Mayor Rick Meehan vetoed the ordinance after the majority of the council voted it through.

“Although I do support a revised salary structure for new hires, I do not support an arbitrarily across-the-board decrease in salaries of 8.5 percent,” Meehan said.

Ocean City’s pay scales for lower level employees are in line with the market, it is the middle and upper level positions that are above the average, according to Meehan. The mayor suggested a graduated scale instead.

Human Resource Director Wayne Evans and City Manager Dennis Dare returned to the City Council this week with different pay scale scenarios for the council to discuss in public.

Evans explained that a previous survey of Ocean City’s pay ranges compared to market data found that the town’s lower graded positions start rates align with Eastern Shore benchmark survey data, and managerial level rates closely resemble a statewide structure.

The survey indicated that the minimums of the lower graded positions of Ocean City’s general pay ranges can be adjusted up to a decrease of 5 percent and remain to be competitive. The higher graded position pay ranges can be reduced more than a decrease of 5 percent and remain competitive.

“In other words we felt that we’re at or close to the market at some of the lower graded positions and a little high at the higher graded positions,” Evans said. “The most equitable means would be to reduce the lower graded jobs less than the higher graded jobs.”

Evans pointed out that the council needed to decide if minimum only, or starting pay, are to be adjusted, or if the minimum and maximum are to be adjusted. If the council decided the maximums are to be adjusted, it would affect current employee salaries by freezing them at the top of their pay ranges.

Under Scenario A, there was no change in pay grade level one through seven, and then a 1- to 10- percent decrease from grades eight through 22.

Scenario B exemplified a 2-percent decrease in pay grade levels one through six, a 5-percent decrease in levels seven through 14, and an 8-percent decrease in levels 15 through 22.

Scenario C showed a graduated reduction of zero through 8 percent from pay grade level one through 22.

Scenario D demonstrated a percent between all ranges reduced from 8.8 percent to 8.4 percent.

The council’s discussion began with focusing on Scenario A.

Councilman Joe Hall said that keeping pay grade levels one through seven the same in starting salaries is good but, “I don’t think that grade one should grow to $30,000.” He proposed the maximum columns for new hires to be reduced 2 percent.

Council President Jim Hall pointed out that this scenario doesn’t hurt anybody that makes a maximum salary of under $50,000.

Joe Hall referred to the survey findings that concluded the town’s maximum levels in the higher grades would be the more equitable to reduce.

“The problem is in the end wage where you become above the competition in the area especially in those jobs,” he said.

Councilman Doug Cymek said that he would like to see the council not impact anyone who is making under $50,000.

Dare moved the council’s attention to Scenario D.

“It uniformly decreases the starting pay and the maximum pay from grade one up to 22,” he said. “The lower grades…have a small effect and then the higher salaries have more of a full effect of the 8-percent decrease.”

Dare explained that this scenario mirrors what the council has learned over the last year and half — that the town’s starting salaries are close to what it is on the Eastern Shore for the lower paying jobs.

“Nobody gets hurt. You’re adjusting yourself to what the market is here in the Eastern Shore,” he said.

Dare did point out that Scenario D would decrease returning summer employees.

Referring to the Ocean City Beach Patrol, he said, “Somebody who tested last August and was told what the existing pay scale is they would get 34 cents less.”

Dare said that rate is still comparable to what other beach patrols in competitive areas pay.

Councilwoman Mary Knight favored Scenario D.

“I don’t want to take 2 percent away from the lower guys,” she said. “I think that someone who has worked a long time deserves to make almost $50,000.”

Dare pointed out that Scenario D does decrease the maximum salary current employees could earn.

“The current employees are not expecting their cap to be lowered,” Councilwoman Margaret Pillas said.

Council President Jim Hall said that the initial proposed ordinance was for new hires only.
“I promised the present employees I would not mess with their pay,” he said.

Dare suggested Scenario D with two maximum columns. One column would keep current employees maximum salaries the same and the second would decrease maximum salaries for new hires.

Cymek asserted that the pay grade for public safety employees needs to remain competitive with the surrounding areas.

“We’re talking about general employees and part-time seasonal employees,” Dare said. “This has nothing to do with full-time police officers and full-time firefighter and paramedics. They have a contract, until you negotiate something different.”

Councilman Brent Ashley set a motion to except Scenario D for general employees with two different maximums.

“That leaves present employees untouched,” Jim Hall said.

Before the council voted, Meehan asked the council to tentatively agree to the motion because changes are going to be made in health benefits and other costs associates town employees.

“Let’s say we go to a different type of retirement and we will require the employees to pay 9 percent rather than 4 percent,” he said. “Well then that’s an additional 4 percent that he is not taking home.”

Jim Hall said that the council will move to pass the motion in “theory”.

“This is just one piece to the pie,” he said.

The council voted unanimously to accept the motion.

“I think that is the way to come to an end,” Meehan said. “That we know what the end is.”