Chapel Hill to consider salary raises for town employees

After a three year salary freeze, Chapel Hill town officials might need to raise pay to stay competitive and retain employees.

In January, Chapel Hill Town Manager Roger Stancil recommended for the town council to adopt a two percent pay raise for all town employees, who have not received a raise since the 2008-2009 fiscal year.

But since then, employees have received an annual bonus of $800. Stancil said at the council meeting that the bonus was two percent of the average employee salary, which slightly exceeds $40,000.

“This meant that obviously employees below that received a higher percentage than two percent and employees above that received a lower percentage than two percent,” he said.

Stancil will present a pay study to the Town Council in April, and they will decide whether to adopt his pay raise recommendation.

UNC School of Government professor William Rivenbark said to retain employees, local governments should adopt competitive salaries.

“I think from a broad overall perspective a competitive salary structure is correlated with retention rates,” he said.

In Chapel Hill, the average salary for the town’s 685 employees is about $41,000, which is lower than the neighboring towns of Hillsborough, Cary and Carrboro.

Cary’s 1,225 employees earn $54,288 on average, for example.

But many factors can impact earnings — Cary employees serve a larger population, and Chapel Hill has more employees in fields such as transit than Hillsborough and Carrboro. Those lower-earning employees can drop averages.

And higher paid employees in Chapel Hill, like the town’s manager and police chief, make more than their counterparts in Hillsborough and Carrboro.

“You can make comparisons between local governments on salaries, but you have to take into account the size of local governments, and you have to take into account the location,” Rivenbark said.

Stancil said it also might be hard to make fair comparisons between towns because of different duties for town employees.

And though it might be worrying officials, Chapel Hill hasn’t been alone in its wage freeze.

In Carrboro, the average salary is $45,258, but employees haven’t received a raise in 3 years — and one isn’t planned for this year.

Desiree White, Carrboro’s human resource director, said despite the lack of pay raises, Carrboro is not experiencing any retention problems.

“There may have been some employees who have left,” she said. “However the salary freeze has not negatively affected our turnover rate.”

White said Carrboro’s current turnover rate of 5.5 percent has remained fairly consistent.

In Hillsborough, the average employee salary is $49,988, and they have also seen similar pay freezes, said Hillsborough Mayor Tom Stevens.

“We are going through a soft freeze,” he said.

Stevens said although town employees won’t receive a broad pay increase this year, individual employees might receive a bonus.

“Sometimes a standard practice is essentially everybody across the board gets a two percent or three percent raise, and it’s generally tied to some kind of cost of living,” he said.

“We are not doing any across-the-board living increases.”

Stevens added that the town board might award merit-based bonuses to town employees.

“We continue to fund staff development and some merit increases, because we think that is very important to people having to work very hard and we need the best performance from our employees,” he said.

“But we have the financial realities of a very tight budget.”

Stevens said the town board might also downsize town positions in the coming fiscal year.

When Stancil makes his recommendation for a pay raise, money to fund it would come from the town’s general funds, he said.

Stancil said he hopes raises will encourage employees to continue working at the same caliber.

“If the economy does continue to improve, we want to position ourselves to continue to attract and retain good employees.”

Staff writer Janie Sircey

contributed reporting.

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