The city’s unions appear to be gearing up to protest the City
Council’s recent decision to freeze merit-based wages, but council
members have indicated they will take a hard line to help balance
Gilroy’s budget.
The city’s unions appear to be gearing up to protest the City Council’s recent decision to freeze merit-based wages, but council members have indicated they will take a hard line to help balance Gilroy’s budget.
In a closed session Monday night, the council directed City Administrator Tom Haglund to impose a wage freeze at City Hall through June 2010, which means the 24 employees who were in line for their merit-based raises this fiscal year will go without, and so will next year’s eligible round. All told, the move will save Gilroy about $350,000, according to historical figures.
The Council also voted 6-1 not to take disciplinary action against Haglund for signing off on more than $130,000 in merit pay hikes for 31 city employees since September, when declining city revenues spurred talk that resulted in 48 layoffs. Those employees who already received raises will keep them, according to Human Resources Director LeeAnn McPhillips, who earlier this month returned her $8,000 merit raise from January.
Councilman Craig Gartman cast the only dissenting vote. He said he wanted to hold Haglund, who attended Monday’s meeting, more accountable, but his colleagues voted to move on.
“I certainly appreciate the support of the council,” said Haglund, who was scheduled for a review on his one-year anniversary in May until the council voted 5-2 earlier this month, with Councilmembers Cat Tucker and Peter Arellano dissenting, to accelerate the review after learning the city’s boss issued what some called “outrageous” and “preposterous” raises.
All full-time employees can receive merit raises – also known as “step increases” that typically come in 5-percent increments – until they reach their positions’ pay ceiling. The raises are in addition to regular cost of living adjustments that most employees receive based on union-negotiated contracts. These are the only two types of raises at City Hall, according to union leaders and city officials.
For merit raises, Gilroy’s four department heads, who do not belong to a union, recommend their eligible rank-and-file and managerial employees for yearly merit review. This is a long-standing practice here and at public agencies throughout the Bay Area, according to administrators here and in nearby municipalities.
Haglund has said he was merely perpetuating Gilroy’s policy despite hard economic times at the city. After Monday’s meeting, council members, who have repeatedly directed Haglund to cut expenses and first approved layoffs in November, said they wished they had been consulted before Haglund issued the raises, but they also said they felt comfortable he did not knowingly disobey them in what many described as a gross miscommunication.
“The majority of the council realized that Tom didn’t do anything wrong,” Councilman Dion Bracco said after the meeting. “It’s regrettable that it wasn’t something that we caught on our radar. We should have known just as much as him.”
“There’s no longer any misunderstanding, and I was relieved that we voted definitively to stop this practice,” Councilman Perry Woodward said. “I certainly thought about the fact that the unions wouldn’t be happy about this, but the community was outraged by the notion that members of unions were still getting discretionary raises when others were being laid off, so they need to recognize this council is serious about balancing the budget, and they can help.”
Police Officers’ Association President Mitch Madruga acknowledged the city’s bleak financial outlook, but he said it would be irresponsible of the union to give up traditional merit evaluations and raises when members have not heard exactly what the council wants.
“The council has held three closed sessions so far to speak about wages and benefits, but we haven’t heard word one,” Madruga said. “We would be stupid to blindly start giving things up without knowing where we’re at.”
Madruga added that news of the merit-based raises should not have surprised anyone, though he said the POA is forming a committee to respond and work with the council to move forward.
“The council’s decision didn’t come as a complete shock, but I thought cooler heads would have prevailed,” Madruga said of the freeze. “There are rules that are in place at City Hall that everybody approved … We’re willing to sit down and come up with something new, but we were never given that opportunity.”
Tina Acree, business agent for the local chapter of the American Federation of State, County and Municipal Employees – which represents the majority of employees who received merit raises – called the freeze “appalling” and said the council should have met with unions rather than just skip the negotiation step.
“The appropriate and legal thing to do is to meet and confer and follow the law with your bargaining groups,” Acree said.
Fire Local 2805 Representative Jim Buessing remained reticent about that union’s next step, but he said any changes to wages, hours and working conditions would trigger a meet and confer. Until that happens, it’s too early to comment on the union’s position, he said.
On the staff level, Haglund said wage freezes will continue through any union talks, and he said staff would also work to revise vague language in Gilroy’s Compensation and Payroll Practices that he has argued makes it unclear whether he actually has the discretion to block merit 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.
“Certainly over the course of the next year we will be working on potential revisions,” Haglund said.
