Lawrence Budget Research

How Sustainable Are the City’s Personnel Expenses?

The Coalition for Collaborative Governance researched the City’s budget to understand why their costs have outpaced their revenues, and one major reason is because their personnel expenses increased 40%, from $90 million to $126 million, in the last six years.

Why have the City’s personnel costs increased 40 % in the last six years?

More Employees - The City currently has 931 full-time-equivalent (FTE) employees, which is 77 more than it had in 2020.[1] On average, each FTE’s salary and benefits cost the City about $130,000 per year, so 77 additional employees could account for about $10 million in annual costs.

General Wage Adjustments - The City provides raises for its employees each year, called general wage adjustments. These raises have been between 0.5 and 3.0% each year for the past six years, and in 2026, City staff received a 3% wage adjustment.[1] 

Market-Rate Adjustments - In 2018, the City hired an outside consultant to compare City staff salaries with comparable jobs in 14 similar communities throughout Kansas, Missouri, and Oklahoma. They found that 19% of our City’s non-union employees were paid below what the consultants identified as market rate, and they found that another 21% of these employees were paid at the low end of the market rate for their position. This study’s findings prompted the City to increase salaries for many employees in 2022 and 2023 to make staff salaries competitive.

Union Agreements – The City has salary agreements with the unions that represent their fire-medical, police, and sanitation employees. These employees receive an annual wage adjustment like the City’s non-union employees, and they also receive a “step compensation” each year for the first 10 years of their employment if they meet their job expectations. These combined increases mean that most union employees were able to expect salary increases of around 7.5% per year in 2024 and 2025.

All combined, the vast majority of the City’s 250 top-paid, union and non-union, employees received raises of 6% or more each of the last two years, and many received similar increases the previous two years too.

The Federal Reserve aims to keep inflation at 2%, and it has been 3% these last two years. So these City staff salary increases have outpaced inflation by 2 times or more. During these same years, the City has faced significant budget deficits and addressed them by cutting departmental budgets and implementing fees at our community’s recreation facilities.