The City Council directed City Administrator Tom Haglund to
impose a wage freeze at City Hall until June 2010.
The City Council directed City Administrator Tom Haglund to impose a wage freeze at City Hall until June 2010. The council also voted 6-1 Monday night not to take disciplinary action against Haglund for signing off on more than $130,000 in merit pay hikes to city employees in the midst of layoffs and declining city revenues.
Although regular cost of living adjustments, which some city employees received on top of 5 percent merit-based raises, will still be in force due to contractual commitments, merit based raises will be nil.
“There were seven people there who did not want to freeze wages but had to,” Councilman Bob Dillon said of the council’s three-hour closed session on the topics of Haglund’s decision to allow the raises and the consideration of a wage freeze. “If this isn’t a bad year, I don’t know what is.”
According to Director of Human Resources LeeAnn McPhillips, 24 city employees would have been eligible to receive merit-based raises by the end of this fiscal year. In the future, the termination of merit-based raises will affect everyone at City Hall, about 200 employees, councilmembers said.
Reluctant to impose a wage freeze, Dillon said that, on the bright side, he was happy to inform the remaining City Hall employees that they still had jobs.
The more than 60 merit-based raises that have been issued in the last year will not be rescinded, the Council’s decision to impose a wage freeze on merit-based raises was the “next best thing” to revoking the already issued raises, Councilman Perry Woodward said. Rescinding the $130,000 Haglund had already granted could spark a legal battle with unions, Woodward said.
Haglund was scheduled for a review on the one-year anniversary of his hiring date, which will be in two months, but the council voted 5-2, with Councilmembers Cat Tucker and Peter Arellano dissenting, to accelerate the review when they learned Haglund issued what some councilmembers called “outrageous” and “preposterous” raises.
Councilwoman Cat Tucker said the body “thoroughly discussed” the issues and she left confident in their 6-1 decision not to take action against Haglund.
The council’s decision was a confidence vote that the city administrator is doing a “great job,” said Mayor Al Pinheiro. He attributed the blunder to a lapse in communication.
“We don’t throw somebody out the door based on one questionable act,” Pinheiro said.
Though he wished Haglund would have brought the raises before the council, Pinheiro said he wasn’t going to point the finger.
“We cleared up the idea that when we say no raises, we mean no raises, including merit pay,” Pinheiro said. “We need to protect the existing folks working here.”
Councilman Craig Gartman cast the only dissenting vote against the motion not to take action against Haglund, saying he thought “the council should have gone in a different direction.”
The council told Haglund back in October that he needed to reduce the city’s expenses but allowed him to have discretion because “we didn’t want to bind his hands,” Gartman said.
“When I ask someone to look for ways to reduce expenses, I don’t want to see, on the other hand, them adding to expenses,” Gartman said.
Most councilmembers said they wished they had been consulted before Haglund issued the raises.
“The majority of the council realized that Tom didn’t do anything wrong,” Councilman Dion Bracco said. “It’s regrettable that it wasn’t something that we caught on our radar. We should have known just as much as him.”
“The 6-1 vote reflects my view,” Woodward said. “Tom made an honest mistake. He regrets that and we need to move on.”
The council will perform Haglund’s regularly scheduled annual review in the coming months.
Haglund did not return numerous phone calls Tuesday but said previously that he regrets the “frustration” and “ill feelings” generated by the news that dozens of employees received performance-based raises as others have lost their jobs. He said he has merely continued a long-standing practice at City Hall and that vague language in Gilroy’s salary policy makes it unclear whether he actually has the discretion to block merit raises.
The council has indicated it wants to revise Gilroy’s Compensation and Payroll Practices to more explicitly identify Haglund’s authority to deny merit-based raises.
As written now, the merit policy states the city administrator “may authorize” the first merit raise of an employee who is not at the top of their pay grade and has received recommendation from their superior. There is no specific mention of the administrator’s authority when it comes to subsequent raises, which officials calculate using a ratings matrix.
