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WATERLOO — A council majority may walk back pay raises previously budgeted for department heads and non-union city employees.

Waterloo City Council members voted 4-3 Monday to delay voting on pay hikes for just under 100 workers whose salaries are not governed by negotiated collective bargaining agreements.

Council members Chris Shimp, Margaret Klein, Steve Schmitt and Bruce Jacobs voted to table action on the proposed 2.75 percent across-the-board raises until June 18 after Shimp requested more time to evaluate the decision.

Council members Jerome Amos Jr., Sharon Juon and Pat Morrissey voted against the move after noting $177,000 to cover the wage increases effective July 1 was included in the budget council members adopted in March.

“We want to be able to attract and retain the best and the brightest employees,” Juon said. “In order to do that we have to be equitable with them; we have to make sure we’re competitive with our wages.

“We have an amazing staff,” she added. “I think we need to reward them for that.”

But Schmitt said the city should freeze nonbargaining salaries in 2018 and reconsider pay rates during next year’s budget talks.

“I find it very hard from a business 101 perspective to talk about giving certain people a raise regardless of whether they deserve it or not — and I would not argue that they don’t — when we already know in fact that we’re going to be taking money out of our reserve fund just to balance our budget,” Schmitt said. “To me that doesn’t make any economic sense whatsoever.”

Human Resources Director Lance Dunn said the 2.75 percent pay increase was the same raise awarded to roughly 400 workers covered under one of the city’s seven collective bargaining agreements.

He said freezing nonbargaining pay could lead to wage compression issues, where some employees make as much or more than their supervisors.

Dunn said his department is currently working on a salary schedule for nonbargaining employees that would set pay ranges and work in concert with a performance review system being set up to start July 1, 2019.

“A salary survey review was conducted a few years ago, and it was determined that the city of Waterloo’s nonbargaining job classifications were undervalued when compared to like positions in Iowa cities of similar size,” Dunn added. “This puts the city of Waterloo at a disadvantage when it pertains to attracting and retaining employees.”

The city traditionally approves the same pay rates for nonbargaining employees that are negotiated with the unions.

However, in 2011 the city approved 1 percent raises for nonbargaining staff when the unions received 3 percent raises. The decision led two employee groups to unionize and prompted city leaders in 2014 to approve 4.8 percent nonbargaining raises when unions were getting 2.9 percent.

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Waterloo City Reporter

Waterloo city reporter for the Courier

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