Proposed pay plan uses internet tax to boost all Cape employees' wages

City of Cape Girardeau employees may see pay raises as soon as July.

In an effort to maintain current city staff and attract new employees, city officials proposed a plan Monday to boost employee pay.

All city employees will receive a 5.5% general wage increase at the start of the city's next fiscal year in July. In July 2023, the city will institute a 6.2% general wage increase.

The proposed plan will also introduce a step program that will allow general employees to receive a 5% step pay increase after every five years of their employment with the city. Public safety employees will see a step increase every four years.

"We believe this plan represents a bold message of hope, optimism, sustainability and vision for the future," city manager Kenny Haskin said at Monday's City Council meeting.

According to Dustin Ziebold, director of finance for the City of Cape Girardeau, the new pay proposal is a complete overhaul of its current pay plan.

"The primary focus of this plan is to bring our front-line and mid-level employees up into a competitive salary range," Ziebold said.

Raising employee pay to competitive levels has been an issue for Cape Girardeau government for years.

In 2014, the city contracted CBIZ, a financial advising company, to assess the city's pay plan.

The city's benefits package was found comparable and exceeded the market in some areas.

However, the study revealed most employee pay rates were significantly below market.

As of Monday night, the city's website listed 22 employee vacancies, not including the police and fire departments.

Cape Girardeau Police Department has 14 openings for officers, eight openings for jailers and two vacant dispatch positions, according to Police Chief Wes Blair.

"It's good to start getting those salaries up so we can start retaining officers," Blair said.

Pay plan funding

City officials have long been vocal that use-tax funds would be appropriated for employee pay and retention.

"We're going to put our money where our mouth was and give [use-tax funds] to our employees," Mayor Bob Fox said.

The city's use tax, often called an internet tax, applies a 2.75% sales tax to online purchases.

Cape Girardeau voters approved a use tax in the November special election with a 61.52% "yes" vote.

Funding for the proposed pay plan will derive from salary savings and use-tax revenue.

How much the city may receive in the first year of use-tax collection is unclear.

The city recently received a notice from the Missouri Department of Revenue that use tax collection will begin in 2022 for "merchants with a self-reported and established nexus in the state of Missouri."

According to Ziebold, the city will use whatever use-tax revenue it may collect next year to fund the first phase of the pay plan beginning in July. Money from budgeted but unfilled positions will be used as a cushion.

"We're confident that with the salary savings we have from this year, we're going to be able to accomplish this plan," Ziebold said. "If the use tax happens to come in higher, we could utilize those salary savings elsewhere as needed."

In other action

• With a unanimous vote, council approve an ordinance to execute a cost-share partnership with the Missouri Department of Transportation to construct a right-in/right-out only intersection along the westbound traffic lane off Highway 74.
• Council approved an ordinance authorizing the city manager to execute an agreement with the Missouri Department of Transportation. The agreement permits the start of a traffic engineering study along a section of Broadway from North Clark Avenue to North Sprigg Street.
• Council appointed Jason Coalter, Britnie Unterreiner, Brenda Kluesner, Cynthia McCormick and Dalton Buehler to the Bloomfield Crossing Community Improvement District Board of Directors.