For some City of Nogales employees, a pay raise could be on the horizon – depending on whether the council votes to increase the city’s minimum wage.
Currently, municipal workers earn a minimum of $13 an hour, according to City Manager Edward Dickie. That’s 20 cents higher than the state’s minimum hourly rate of $12.80.
However, amid rising costs of living, Arizona’s minimum wage is expected to rise in 2023. And at a study session held Tuesday afternoon, city leaders discussed the possibility of boosting the city’s minimum wage to $14 or $15 an hour.
The item was placed on Tuesday’s agenda by Mayor Arturo Garino and Councilman Octavio Gradillas, Jr. The latter had requested a feasibility study last month to examine possible salary increases.
“I’m assuming this would make our employees more marketable, help in retention, and (give) them a better starting point,” Gradillas said during the session. “Try and keep them here with the city for longer.”
The council will vote on the matter at its next meeting, according to Deputy City Manager John Kissinger.
The potential salary boost also comes after internal city documents revealed widening wage gaps in the City of Nogales workforce. In June, the mayor and council approved a budget for the current 2022-2023 Fiscal Year, granting pay raises upwards of $13,000 to some employees in leadership positions. Other employees, meanwhile, received relatively minuscule raises, and continue to earn below $30,000.
“I worry about the people at the bottom,” Councilwoman Liza Montiel said when she provided the pay schedule to the NI last month.
According to Dickie, the lowest-earning city employees currently earn about $27,040 per year, which boils down to $13 an hour.
But on Tuesday, the council listened to a feasibility study on raising the minimum annual salary to $29,052 – bringing the minimum hourly wage to nearly $14. That adjustment would affect 43 employees, and would cost the city $58,920, according to the study.
If the council votes in favor, the raise could go into effect by Jan. 1, 2023.
Council members also floated the idea of a more dramatic salary increase: pushing the minimum wage to $15 an hour. That idea was met with more hesitation from city staff.
“For this year I can say yes, I believe we can afford it,” said Finance Director Jean Moehlman. “But if you want to talk sustainability for the future years, I don’t know if this recession’s going to hit us that hard.”
Speaking to council, Moehlman expressed concern that a $15 hourly minimum could prompt layoffs in coming years.
“I wouldn’t want to say, ‘Let’s do it,’ and then next June have to tell all my directors, ‘You have to get rid of five people,’” she explained.
Raising the minimum wage to $15 would affect a larger pool of employees: 85 city workers would see a salary adjustment, according to the study. Altogether, those higher salaries would cost the city $234,500 per year.
But in regard to the smaller raise – to $14 an hour – “I really don’t have a concern,” Moehlman added.
“I think it’s a safe bet,” added Councilman Saulo Bonilla minutes later, referring to the $14 minimum.
A wage gap
While the possibility of a minimum wage hike is still uncertain, the current budget includes significant, five-figure salary increases for some leadership positions.
Among those who received the highest salary hikes were the city’s deputy manager, police chief, human resources director, and several Nogales Fire Department captains.
Kissinger, who serves as deputy city manager, earned a salary of $111,240 in the 2021-2022 Fiscal Year. The new budget, approved in June, brings his salary to $124,300 – a more than $13,000 raise.
Police Chief Roy Bermudez earned an annual salary of $103,297 in Fiscal Year 2021-2022. With the new budget, Bermudez earns $115,427 – a raise of more than $12,000.
Though Montiel voted in favor of the newly approved budget, she also questioned why the council hadn’t taken action sooner on minimum wages.
“Why didn’t we do what we’re doing today, at the very phase one? Why didn’t we get these employees to that range?” she asked Tuesday.
Dickie responded that during the council’s deliberations on the coming budget, there had been consensus to bring employees up to $13 an hour.
But, he added, there hadn’t been a definitive push at the time for a higher minimum salary.
“There was no real direction until afterwards, to say, ‘Hey, staff, why don’t you bring us something to see what (it) would cost the city if we were able to do this?’” he added.
During Tuesday’s session, council members voiced concerns about employee retention – particularly when large corporations are paying workers higher wages.
In fact, Bonilla said, that factored into the city starting employees at $13 an hour for the current fiscal year.
“We weren’t staying competitive with McDonald’s. They were starting their employees at $13.90 an hour,” he added.
And neighboring city governments provide yet another layer of potential competition. According to the City of Tucson’s proposed budget for 2023, the minimum rate sits at $15 an hour. And the City of Sierra Vista’s 2023 pay schedule includes a minimum hourly wage of $14.69.
Other administrators in Santa Cruz County have echoed similar concerns about staying competitive. Speaking last month, Mayra Zuniga, the human resources director at Nogales Unified School District, noted that while the district is well-staffed, she’d been noticing fewer qualified applications for non-teaching positions.
“Sometimes the pay is not as glamorous or as competitive as we would like for it to be,” she said at the time, adding that companies like Starbucks and McDonald’s had raised their compensation since the pandemic began.
And at an Aug. 3 County Board of Supervisors Meeting, the supervisors unanimously approved a six-percent pay raise across the board for employees.
“Especially with fast food, all these other places increasing (wages),” said District 2 Supervisor Rudy Molera. “We have to keep up.”