Citing tough financial times, the City Council decided on Tuesday not to raise the pay of those employees during the fiscal year that begins today.

City of Ashland employees who are underpaid compared to similar workers in other municipalities will not receive pay increases for at least one year.

Citing tough financial times, the City Council decided on Tuesday not to raise the pay of those employees during the fiscal year that begins today.

Although the pay of current employees will be frozen, some new hires will be paid more because pay ranges for the underpaid positions will be shifted higher.

Back in March, City Administrator Martha Bennett recommended that about 70 employees receive raises because a consultant's study on compensation showed they were paid less than the median wage in their field for the public sector.

Almost 30 employees could have had their pay frozen because the study said they are being paid more than the median amount.

Bennett's recommendation for pay raises set off a storm of criticism from many residents, especially because all 10 of the city's top paid employees — who make at least $90,000 annually — would have received raises.

Bennett offered a new recommendation that the council adopt the results of the study, but keep the pay of underpaid city employees frozen for the 2010-2011 fiscal year. The City Council adopted that strategy. The official pay ranges for those employees will increase, but they will not get extra pay.

Bennett and Human Resources Director Tina Gray said the recommendation changed because the city doesn't have enough money to implement the original recommendation.

"We know we don't have the resources to implement any compensation changes," Gray said.

Councilman Eric Navickas said if the economy and the city's finances turn around, there is a possibility that underpaid city workers could receive future pay increases. However, he said that scenario is doubtful, especially because the city has been warned by the state government to expect increases in Public Employee Retirement System costs next fiscal year.

Councilman Greg Lemhouse said if there are any pay raises in the future, those will have to be scrutinized and approved by the Citizens' Budget Committee and the council.

"I'm under no illusion we'll be throwing out raises, and I think it's important for the public to understand that," he said.

Bennett said the study, which looked at employee compensation and classifications of job titles and descriptions, found that Ashland employees' benefits are about in the middle of the range of benefits paid by comparable cities in Oregon.

"We may be right in the middle, but it's not affordable for Ashland," she said, noting that the city must control the costs of its benefit packages.

In 2009, the City Council approved paying $49,105 plus $2,555 in expenses for CPS Human Resource Services to conduct the employee compensation and classification study. The consulting firm is based in Sacramento, Calif., and Washington, D.C.

The council action came after Ashland experienced several years of rapid staff turnover.

The study covered about half of city employees. Firefighter and police officer compensation is governed by different collective bargaining laws, so public safety workers were among employees not included in the study.

Council members Navickas, Lemhouse, Kate Jackson and Carol Voisin voted to adopt the results of the compensation study but to freeze pay for underpaid workers for this fiscal year. Council members David Chapman and Russ Silbiger voted against that action.

They said the study was flawed, and Silbiger faulted the consultant for not comparing city employees' pay and benefits to the compensation of people with similar jobs in the private sector.

Staff writer Vickie Aldous can be reached at 541-479-8199 or vlaldous@yahoo.com.