City staff are proposing a 2.5% wage increase for all city employees in 2027, plus step increases for some, backed by a wage study a consultant presented to city commissioners Tuesday.
“The fiscal impact to the city is approximately $2.4 million for all employee groups across all funds for a general wage adjustment of 2.5%, and approximately $2.7 million for all employee groups across all funds for a step increase,” according to the agenda item report.
Staff didn’t add the employee compensation study to the agenda until Monday night. The commission took no action on the proposals or the study Tuesday. They will consider the proposals during holistic 2027 budget discussions.
Shakeva Christian, director of human resources, said the city contracted a compensation study from McGrath Human Resources Group in 2018 that found rates for city employees in Lawrence weren’t keeping up with market standards. The study also identified internal inequities, like wage compression, where newer employees or those with less experience make closer to what experienced employees make.
Ultimately, that study, plus a 2021 check-in with McGrath, led to the city spending an additional $5 million on employee compensation in 2022, plus $4 million more in 2023. Christian said those totals accounted for wage and pay rate adjustments and converting the pay plan.
Victoria McGrath, CEO of McGrath Human Resources Group, said Tuesday that this year’s study was fairly limited in scope.
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“It was just really to address the current compensation system and look at the external market and determine whether or not those salary ranges have remained competitive, and if there are any positions that need to be moved into different pay grades based upon market conditions,” McGrath said.
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She said they spoke with unions — fire and police — as well as the city’s two groups represented by Teamsters, while also looking at non-union staff. She said the city has maintained recommended salary increases.
“I’ve got to applaud the city, you guys have done a phenomenal job there,” McGrath said.
McGrath said 16% of positions were under average market standard, and 8% were under median market standard. The market that she compared Lawrence to includes cities such as Kansas City and Columbia in Missouri and Leawood, Manhattan, Overland Park, Topeka and Wichita in Kansas.
Commissioner Kristine Polian said “these comps are all over the place.” She pointed to locations like Wichita and Lenexa, and said they’re different from Lawrence.
McGrath said the comps were selected in 2018 and can be places that the city loses staff to, where they want to recruit from and what’s within driving distance. She also wanted to compare Lawrence to other university towns.
McGrath felt that her calculations kept outliers from skewing the results too drastically.
“I never really worried too much about if a city paid higher or lower, because we used our formula that eliminated those outliers. You know, I’ve said this for 26 years — employees want me to always include the highest-paying municipalities, and elected officials want me to use the lowest-paying municipalities,“ McGrath said.
McGrath said the proposed 2.5% pay increase in 2027 would push most staff up to a market rate, but made specific recommendations to increase the pay grade, or steps, for positions such as police officers, firefighters and paramedics, the animal control officer, the deputy city clerk and more.
McGrath told the city to “continue to put an increase on the salary schedule as much as possible.”
She also recommended that the city group employees by “job families.” For example, she said, there could be a skilled labor classification, an administrative classification, a professional/technical classification and managerial classification.
“That way, as things change in the market, you’re really only concerned with changing what’s in that family versus changing the entire compensation system,” McGrath said.
Mayor Brad Finkeldei asked if some salaries should be decreased. McGrath said she didn’t think any positions were overpaid.
“Typically we don’t do that,” she said. “It’s something that usually doesn’t sell very well with employees.”
Multiple public commenters pushed back on raising staff wages, while one person was in support.
Holly Krebs, of the Coalition for Collaborative Governance, said that the group understands the city needs to support employees with fair compensation and benefits. However, they’re concerned that wages “are increasing at rates that outpace expected revenue growth.”
Finkeldei acknowledged that staff pay increases could impact city services, as the budget is a game of tradeoffs.
“So, yes, in isolation, one way to solve the budget problems is not giving one raises,” he said. “I mean, we can do that, that’s one solution. Another solution is taxes, another solution is growth, another solution is cutting services, and those are all things we have to continue to grapple with and try to find that right balance.”
Christian also said staff will recommend the city increase its contribution to the staff health and wellness fund by $19,000 per person. Simultaneously, employees would have a 20% contribution increase. That is proposed as part of the 2027 preliminary budget.
See more coverage of the city budget at this link and in the articles linked below.
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Wulfe Wulfemeyer (they/them), reporter and news editor, has worked with The Lawrence Times since May 2025. They can be reached at [email protected].
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