by Judy Frank
posted July 31, 2007
City Council members voted 5-4 Tuesday not to rescind the across-the-board 3 percent pay raise they passed earlier this month.
Ignoring city employees who packed the council meeting room to show their support for adding a dollar to the hourly salary of every employee – in lieu of the 3 percent raise – the council did not discuss the issue.
As they did last week, council members Jack Benson, Leamon Pierce, Duke Franklin and Debbie Gaines voted to rescind the 3 percent raise.
But the remaining five members voted no, killing the proposal.
Council members then moved on to the next item on the agenda, the city’s 2007-2008 budget, which passed by a 5-4 vote.
“This is the first time I can remember that the budget didn’t pass unanimously,” one city official commented.
But Councilman Pierce, noting that the budget included the 3 percent raise he had just voted against, said he just couldn’t support it.
At his request, a Chattanooga Police dispatcher was allowed to briefly address the council before the vote on the pay increase was taken.
“My income does not accommodate what I have to pay out (in ever-larger living expenses),” Sharon Blank told the council. “When the mayor builds his homeless shelter, I might be one of the people applying to live there.”
But her plea changed no minds. Instead, a majority of council members supported Mayor Ron Littlefield’s position that the raise should stand as originally approved.
“It is extremely painful to me that this has become a battle between the lower paid and higher paid (employees),” the mayor said in a lengthy memo to council members circulated before the meeting.
“In politics, it is easy to pick such a fight,” he noted, “but the scars and effects can be long lasting and counterproductive to sound management.”
He said the city has worked hard to make employee salaries more equitable, and to make sure that no workers are paid less than a living wage.
The city has not passed a property tax increase since 2001, the mayor said, but employee salaries have gone up significantly.
Consequently, while salaries totaled just 51 percent of the total city budget in 2001, they now account for a whopping 60 percent.
“The proposed budget includes a 7.44 percent increase in employee compensation – a total of $7,466,339,” according to the mayor’s memo. “Actual payroll costs are projected to rise 5 percent or $3,688,835,and the 3 percent cost of living increase approved to begin July 1, 2007, will require $2,213,301.”
The remaining money set aside for raise will go to correct inequities revealed by the pay study, which is due to be complete this fall, he said.
Here is the full statement from Mayor Littlefield:
As the Council has wrestled with this issue, let me once again stress that we did not arrive at this recommended course of action without considerable effort and pain staking review of alternatives. Mathematically, the other proposals simply do not work and I know of no other practical solution at this time.
At the beginning of this administration, we set about to restore confidence in the city’s pay plan as a true reflection of the job market. As indicated by the attached history of pay increases over the past 10 years, past administrations have taken a variety of actions each year, including steps, percentage increases and bonuses. The last wholesale review and update of our pay system occurred in 1998-99. To retain a sound pay system, it is important to utilize a combination of steps and cost-of-living adjustments – along with regular reviews by an objective outside authority.
In 2001-2002, employees were given a flat $500 plus 2% and no step. The next fiscal year (2002-2003) some employees received a step only, fire and police personnel received a step plus an additional 3% adjustment, those who were topped out received a flat $800 and non-pay plan employees received 4%. (Also, we adjusted lower range pay to establish a “living wage” level – something that has been continued until and including the presently proposed budget.) Following that, in FY 03/04, pay was increased 3% across-the-board. In the 04/05 and 05/06 fiscal years, the city gave steps to all qualified employees and a 3% bonus to those at the top of their range. For the 06/07 year, employees received a 3% increase across-the-board.
The overall effect of these measures has been a 51% increase ($33,769,653) in budgeted salary and benefit expense since the last property tax increase in 2001. Also during that period, Total salaries and benefits rose from 51% to 60% of total budget.
In response to employee complaints about the current pay plan and to address the creeping problem of pay inequity, we embarked on a plan for this fiscal year to utilize a two step method to bring job duties and pay back into line with the realities of the market. Several months ago, with the full knowledge and understanding of the City Council as well as that of employee unions and associations, we prepared specifications, advertised our intentions, and solicited proposals from qualified contractors to undertake our much discussed pay study. We signed a $190,000 contract for the work – again with the blessings of the City Council.
As we prepared for the current budget, we solicited input from employees, collected comparable data on pay from unions and explained to everyone that completion of the pay study is expected in October. Further, we promised to begin to move in the direction of adjusting overall pay to better reflect the market until the deficiencies in the current pay structure can be addressed.
A Two Step Plan:
The budget that has been submitted includes a 7% increase in total benefits including a 5% overall increase in payroll.
The first step in implementing the plan is a 3% cost of living increase to advance the entire existing pay plan toward anticipated true market levels, to cover current employees and to permit pay checks to reflect the appropriate increases beginning with the first day of the new fiscal year. This was presented to the Council in the form of an ordinance and was adopted after two readings.
The remaining 2% in the budget is earmarked to address deficiencies identified by the new pay study. This will be the tough one.
In distributing these additional funds, quite frankly, it is expected that some jobs that are being paid below market will receive more than 2% and others that might be at or above market will receive nothing. In fact, some jobs might be “frozen in place” until the market catches up with the pay level. Such things have happened before. The question is “Which jobs are underpaid and which are overpaid?” and in spite of what we as individuals might think we know, there will be no truly objective information on which such important decisions can be made until the results of the pay study are known. This is never an easy process and, believe me, this will be a much discussed and debated action. We were elected to do a job and sometimes that means doing what is right and not just what is popular at the moment. There will be plenty of opportunity for review and criticism, and the Council will once again be asked for approval.
Let me stress once more that this plan and course of action was laid out in detail months ago. While it might be tempting to try and prejudge the results of the pay study and give graduated pay increases at this time, in all honesty we might be imposing our own personal feelings and preferences on the system – and making matters worse. We have utilized the internet and other sources to try and anticipate where city pay levels might be short. As explained in our past meetings, our preliminary review indicates that we might be behind in skilled job categories and not so much at the high end or the low end of the total spectrum. The 3% across the board increase in the overall pay plan helped to move these categories toward the market and it appears that the city is now more marketable for such skills. However, please remember………
Step two is the most important part of the plan. This is the proper time to address specific deficiencies.
It is extremely painful to me that this has become a battle between the lower paid and higher paid. In politics, it is easy to spark such a fight, but the scars and effects can be long lasting and counterproductive to sound management. As a career public servant and long time city employee, I tend to side with those on the lower end of the pay scale. For this reason, we have taken extraordinary steps to provide free clinics and medications plus improved regular conventional medical coverage for employees. It can be argued that such benefits are more likely to benefit the low-income employee, but we have extended it to all.
The city of Chattanooga is privileged to have some of the most devoted, hard working employees and it is only appropriate that they are compensated fairly. The proposed budget includes a 7.44% increase in employee compensation – a total of $7,466,339. Actual payroll costs are projected to rise 5% or $3,688,835 and the 3% cost of living increase approved to begin July 1, 2007, will require $2,213,301. The remaining $1,475,534 is intended to address deficiencies identified by the pay study.
After all the dust settles, we should once again have our citywide employee pay in step with the market. In fact, total compensation – including the extraordinary health benefits – should be better than that available from most any comparable employer. The great challenge will be extending this level of benefit forward into future fiscal years without raising taxes.
It is our intention – with the Council’s cooperation – to do just that.
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