While 48 full-time city employees were pleading for and
eventually losing their jobs, City Administrator Tom Haglund doled
out $96,000 in raises to 23 workers, according to city figures.
This included an $8,000 raise for Gilroy’s human resources chief,
which bumped her annual salary including benefits to $171,408.
While 48 full-time city employees were pleading for and eventually losing their jobs, City Administrator Tom Haglund doled out $96,000 in raises to 23 workers, according to city figures. This included an $8,000 raise for Gilroy’s human resources chief, which bumped her annual salary including benefits to $171,408.
Human Resources Director LeeAnn McPhillips was one of six employees who received a total of $23,200 in discretionary raises in January, according to city figures. Since September 2008, when whispers of layoffs began circulating City Hall, Haglund has approved nearly $100,000 in performance-based pay bumps for 23 employees – five of whom were ultimately laid off – on top of the pre-approved cost of living adjustments, or COLAs, that the city’s fire and municipal employees received Jan. 1 and will again receive July 1.
“It’s just in bad taste that the HR director, in the month of January when she is completing the paperwork to layoff 40-plus people, received a 5 percent increase in her salary,” Councilman Craig Gartman said.
“It not only looks bad – it’s troubling,” Councilman Perry Woodward added. “These are discretionary raises, and that’s not how I would have used that discretion.”
The raises occurred as council members continually directed Haglund to cut costs at all levels, but the city’s boss defended the raises as well within his job description and as appropriate dues to well-performing employees who deserved morale boosters amid such uncertain times.
“This is a process we have continued notwithstanding the layoff situation … We still have to be concerned with the services we provide this community,” Haglund said, adding that “across-the-board COLAs are significantly more expensive than working to retain individuals by recognizing their performance.” Furthermore, merit-based raises are limited because employees can only receive them until they reach the top of their pay grades, Haglund said.
McPhillips still has another $7,000 to go to the top, but former Community Development Director Wendie Rooney, who left for a public job in Los Gatos earlier this month, maxed out her pay grade last December when she received a nearly $3,000 raise, pushing her annual salary to $174,300 including benefits, according to city figures.
Woodward called Haglund’s morale-booster argument “mind boggling” and “a little preposterous” and said, “If anyone had asked me, I would’ve said no.” He also echoed the sentiments of Councilman Craig Gartman, who has spent the last 1.5 weeks asking Haglund about the scope of the raises and why they were not deferred amid the council’s direction to curb spending.
“I was thinking that the message we sent to our city administrator would be carried out,” Gartman said of the council’s orders since October to cut costs on all levels to combat the general fund deficit – which now stands at $3.8 million, according to the latest city projections.
Mayor Al Pinheiro, who brought up the fact that council members pay 50 cents for sodas on the dais, defended Haglund as “doing a great job (in general),” but he admitted that news of the raises also raised his eyebrows.
“I was surprised,” he said. “The council needs to have a conversation about this even though (Haglund has) got full discretion.”
According to the city’s payroll practices, Haglund can evaluate employees on their performance after six months or a year – depending on their tenure or last raise – as long as a department head recommends them. In the case of a department head, such as McPhillips, Haglund recommends them himself.
That also includes Finance Director Christina Turner, who received a 5-percent – or $6,800 – raise in December, bringing her annual salary to $144,132 including benefits, according to city figures. Councilman Peter Arellano said Haglund’s authority deserves a review, but he said finance folks such as Turner deserved raises because they have worked “all kinds of hours” continually re-evaluating the city’s finances and offering recommendations in response to mercurial economic conditions.
“Could (Haglund) have used more discretion to hand out these raises? I think so, but I need to sit down and talk to him,” Arellano said.
Gartman argued that this would have never happened in the private sector, and he compared the city raises with bonuses Wall Street companies doled out to top executives after receiving taxpayer bailouts.
“In the private sector, you don’t hand out merit raises while you’re handing out pink slips,” Gartman said. “I think we need to go back and re-examine some of the direction the council has given our city administrator … If we didn’t give out a bunch of these merit raises, maybe there was someone we didn’t have to lay off.”
Monday, the council will hold a closed session to discuss the Police Officers’ Association’s latest union contract, and Gartman – like many of his colleagues – said he will look for concessions from the unions to cut down on costs.
Woodward considered past raises as “water under the bridge,” but as for the future of merit-based pay bumps, he said the council will weigh in.
“These aren’t happy times, and some of that unhappiness is going to have to be spread around,” Woodward said.
