Citizen Harry commentary: So what’s all the fuss about City employees wages?

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By “Citizen Harry” Gatjens

The City Council Tuesday night will debate and decide what to do about pay raises for city employees. What’s this all about?

The City Council last year decided to hire the compensation consultant to examine the wages paid to its non-union, or non-represented, employees. The object was to be sure that employees were being paid “market” rates and that wages were administered fairly.

City employees have had no cost-of-living increases since 2009 and are also concerned that they’re not being paid commensurate with the city’s represented employees.

The consultant compared Edmonds wages with those of several other cities. As much as they could, they compared each position with similar positions in the other cities. They also compared wages with those in private industry.

Another concern was that the amounts and timing of wage increases were somewhat arbitrary. There was no set system for administering these items.

The consultant recommended “wage bands” for each position and found that the city’s current “bands” were too wide, meaning that there was too much difference between the lowest and highest wage for each position.

They recommended tightening the bands so that there was a maximum of a 35-percent difference between the top and the bottom wage. They further recommended that within each band there be seven “steps” where people’s wages could be set. This will eliminate some of the arbitrary wage amounts and allow for an expectation of the exact amount wages could change each year.

At each review, an employee would have a set of criteria which, if met, would allow them to move up the next “steps” in their wage band. With a 35-percent difference between the top and the bottom, each of these seven “steps” would be for 5 percent. Meaning if you met your goals your wage would increase by 5 percent. This doesn’t mean you would get a 5-percent increase each year as there are only a total of seven “steps” within your wage band before you would have reached the top. Some years you may not take a “step”in the wage would remain flat.

In addition, there has been no cost-of-living increase for employees since 2009. Represented employees, by contract, get a cost-of-living increase each year. So recommended that non-represented employees also get cost-of-living increases. These would be computed by using a governmental consumer price index.

Back to the “steps” in order to use the system all employees wages would need to be adjusted to the next highest “step.” This could be accomplished all at once or over two to three years. The difference being it would be more costly to adjust everyone at one time. Based upon the current census the cost for this adjustment, all at once, would be $61,000. If done over several years the $61,000 would be split over however many years,

Once everyone is established in a particular “step,” future wages would be adjusted by the formula about. The system would eliminate arbitrary wage increases and the potential conflicts such things cause.

It has been argued that this new system would mean that employees would get automatic 5-percent increases each year. This doesn’t seem like sound economics given the current real-world economy. However, employees are not guaranteed to move out a step each year and with only seven steps within each wage band there would quickly be time when employees wages are capped

One potential solution is to increase the number of steps within each wage band. If you go to 10 steps and maintain the same 35-percent difference between the top and bottom of each band, then each step would be an increase of 3.5 percent. The amount of each increase is strictly a mathematical computation of taking the wage band limits and dividing it by the number of steps.

The City’s Human Resource department and the consultants have made this presentation to the City Council as a result of Council’s request for a study. The Council now needs to decide whether or not to act on this study as requested.

Edmonds resident “Citizen Harry” Gatjens provides regular reports and commentary to My Edmonds News on the workings of the Edmonds city government. Gatjens, an accountant, also offers insight into the city budget.

 

4 COMMENTS

  1. Harry, you make large amounts of info very understandable and thanks for the clarity. I really appreciate your civic participation !

  2. Councilmembers should take into consideration that some of the compensation by some of the comparator cities is more theoretical than actual. Because some cities have gotten temporary concessions from employees that have not been sought from our employees. Concessions need to be benchmarked. The consultant has done an excellent job of gathering all of the compensation elements from the comparator cities. City Council should now have him collect the data related to concessions made by the employees of those cities, over the past few years, in order to determine what is appropriate for Edmonds.

    I have been making this plea several times since 2010, but no elected official has done anything with it – even though the Association of Washington Cities (AWC) has referenced the existence of cuts in personnel costs by most cities.

  3. There is one correction I have. Even though represented employees have cost of living increases in their contracts, they do not always get an increase. The raises are based upon the CPI and if it is zero or less, then there is no increase in wages.

    The steps taken by council to fix the non-represented employee wages will still have to have a provision for cost of living increases. Otherwise, in a few years they will find that those wages will again be lower than comparable city wages. Unless all governmental wages everywhere are held steady then somewhere, due to cost of living adjustments, there will be increases. To stop this a wage freeze would have to be declared by the President. Maybe the Governor could do this for our State, but I couldn’t say for certain.

  4. I commend the “step” approach. Especially if the milestones and benchmarks are detailed for each step – if you accomplish this, then you receive this; it appears this process would remove any arbitrary approach to pay increases.

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