The city is officially moving forward on giving raises to its top two police officers and studying the salaries of all its employees.

The Austin City Council voted 6-0 Monday with Janet Anderson absent to raise Police Chief Brian Krueger and Capt. Dave McKichan’s salaries by 4 percent, with Krueger’s salary increasing to $109,500 and McKichan’s to $92,900.

The council also voted Monday to move ahead with a compensation and classification study of all employee salaries, duties and roles, a process that could take eight months to a year. The city will begin seeking contractors to complete the study, which could cost an estimated $25,000 to $30,000.

Human Resources Director Tricia Wiechmann will also begin looking at the wages of eight non-union employees to address those more quickly. The effort is all part of a plan to ensure the Austin city employees are being paid equitably and, therefore, won’t leave for better pay in other communities.

All actions were first approved at the council retreat last week before being made official Monday.

Last week, Krueger brought data to council showing how Austin’s wages for himself and McKichan were trailing comparable cities with Krueger making $105,010 to the average $111,484 in Albert Lea, Winona, Owatonna and Faribault, while McKichan was making $89,378 compared to the average $94,123 in those cities.

Seeing the vast differences in salaries, council members opted to take immediate action. But that also led them to support the compensation study, which has been budgeted for several years but not acted on, based on the action of past councils.

The city hasn’t done a large-scale compensation study since the early 1990s, though Wiechmann said the city has done some patchwork to look into some issues over the years as new positions were created or changed.

A big concern is staying competitive in the job market.

Austin’s lead building official just left to be a building inspector in Olmsted County, where he’ll make more money with fewer responsibilities in a lower position.

While city leaders acknowledged Austin can’t compete with Olmsted County’s wages and size, the study should give them the tools to try and stay competitive and retain workers.

Last week, City Administrator Craig Clark argued the city needs to know where it stands before addressing employee wage issues. The compensation study doesn’t just address wages, it also looks at job duties, responsibilities and other factors — many of which vary drastically in different cities.

While Clark said the city will surely face market pressures with employees, he said it’s important to have the tools and knowledge to know how the positions, responsibilities and pay compare. Clark said once one employee’s wage is increased, others will likely come forward with similar concerns.

Director of Administrative Services Tom Dankert has called the need for a compensation study long overdue, but he cautioned council last week that it will require a significant new revenue, depending on how the city decides to right the wages of underpaid employees, to enact the findings of a compensation study.

Mower County is in the midst of a compensation study and budgeted $325,000 to implement the study — meaning it would cost that to bring underpaid employee wages up to par.

If the city’s implementation costs a similar $300,000, staff pay increases make for a change of $600,000 or more in one year when coupled with cost of living increases negotiated into union contracts — if the the city implements the plan all at one time.

While council members acknowledged the hefty wage increases that will stem from a compensation study, they also noted they could face similar challenges from losing employees to better paying jobs.

King argued that Austin has held a hard line on taxes for many years, and is ranked low compared to other cities. However, he argued the city could soon be at risk of losing more employees to neighboring communities.

If the city were to lose someone like Krueger or McKichan to a neighboring community, he questioned what it would cost in resources, job training, relationship building and other intangibles.