The Truth or Consequences City Commission approved a new scheme for compensating employees at the July 23 regular meeting.
The city commission also approved the expenditure of $250,000 throughout the fiscal year to address low pay and “compression” or too little difference in pay among new hires and old hands.
The new pay scheme is based on the study and recommendations made by city-hired Valliant Consulting Group of Albuquerque, which gave a presentation to city commissioners during the meeting.
The $250,000 will only address too-low pay and compression for “nonexempt” employees. Exempt employees’ salaries may not be adjusted until next fiscal year, which starts July 1, 2026.
Exempt employees are exempt from being paid overtime, the Valiant consultant said, explaining that laws control and define which employees may be exempted by the government, giving no further details. A quick Google search shows she was referring to the federal Fair Labor Standards Act. Exempt employees are paid a salary instead of an hourly wage. Exemption is allowed for employment requiring specialized knowledge, management of other employees or projects, exercise of discretion and independent judgement, my search showed.
Nonexempt employees are paid hourly and must be paid overtime.
The city has about 100 employees with 52 hourly or nonexempt employees being paid below market value.
The city had a compensation study done about three years ago, which corrected some of the city’s low pay, but overall it is at 85 percent of market value, the study states. Its implementation did not include “cost of living adjustment” or COLA increases to keep city pay competitive.
The city has long suffered from high turnover, but it has improved lately, under City Manager Gary Whitehead’s leadership, who has been with the city only four months. Whitehead said the city is at 95 percent employment, with about seven open positions.
The last compensation study established seven “steps,” each step representing a yearly raise, not evaluating or rewarding employees who had been with the city longer.
The current study is similar, but instead of steps it establishes “grades” and “ranges” of pay, leaving more discretion to supervisors in determining pay.
City Commissioner Merry Jo Fahl was leery about allowing such discretion, but voted yes to adopting the new pay structure. The consultant said the step system has lost favor among governments as being “too rigid.”
The pay scale, similar to the first study, is based on “market value.” The consultant said they looked at federal , state and local governments, including similarly sized New Mexico cities, comparing pay for similar or like positions.
Whitehead said the city can afford to address the nonexempt employees’ pay and their compression issues this fiscal year, which started July 1 and ends June 30, 2026. That will cost about $250,000, as determined by the Valliant study.
The draft budget, approved last month by the city commission, assumed $100,000 more pay would be needed for each of the “enterprise funds,” Whitehead said, supposedly referring to the electric, water, wastewater and solid waste departments.
The draft budget also assumed 100 percent employment, Whitehead said, and if this isn’t sufficient to cover the $250,000, the city could dip into a $1 million CD.
He warned the city commission and audience and city employees that there is still “a lot of work that needs to be done” to determine how the plan will be “implemented.”
Between now and the Sept. 10 city commission meeting, he and city staff will examine and adjust job descriptions. Whitehead said he’s thinking each employee will automatically get a 1.5 percent raise at their anniversary date, to spread the expenditure throughout the year instead of “taking a big hit in July.”
Then, to ensure the whole pay-scale chart remains current, a cost of living adjustment raise will be given to all employees each year, Whitehead said. Not until the city commission approves this final implementation plan, Sept. 10, will pay increases begin.
But the city commission’s approval of the $250,000 expenditure was necessary to meet the Department of Finance and Administration’s final budget deadline. The final budget will be presented to the city commission “at a special meeting next week,” Whitehead said.