City Hall’s best-paid administrators were passed over for raises
Monday night in the latest round of pay hikes approved by City
Council, a move that could spare councilmen headed toward a fall
election from a second political tussle over a controversial salary
package approved earlier in the year.
Gilroy – City Hall’s best-paid administrators were passed over for raises Monday night in the latest round of pay hikes approved by City Council, a move that could spare councilmen headed toward a fall election from a second political tussle over a controversial salary package approved earlier in the year.
With two councilmen absent and one having recused himself Monday night, the council voted 4-0-3 that the city’s 10 highest-paid positions will not receive a 3-percent “cost of living adjustment,” while the raise will be afforded to 22 lower-level managers and analysts under a policy aimed at ensuring bosses at City Hall earn more than their subordinates.
The COLA adjustments, as they are commonly known, will help keep salaries for those 22 employees in step with inflation and other city employees who receive such pay bumps every few years. Councilman Craig Gartman said, however, that they postpone a politically harmful budget crisis before City Administrator Jay Baksa’s planned retirement later this year.
“After Jay (Baksa) walks out the door, this council is going to have to make up this 3 percent if they are to go with the intent of the new policy, so there’s going to be bigger increases next year,” said Gartman, referring to the revised pay structure for the “exempt group” made up of 42 non-union employees who range from Gilroy’s budget analyst to its police chief.
Gartman was the lone dissenter in April when the council approved a plan calling for top city administrators to earn 15 percent more than those they supervise and 10 percent more than comparable positions in surrounding cities. Councilmen Peter Arellano and Paul Correa were absent Monday for personal reasons.
The salary program was approved in response to some Gilroy Police sergeants earning as much as their captains since they could negotiate raises as members of a union and also work overtime, whereas chiefs and captains in the exempt group can do neither, according to Baksa. The sergeant-captain gulf is called the “trigger classification,” Baksa added, because when this salary gap drops below 15 percent, that’s when officials will respond, unlike in years past.
“The exempt group was getting smaller raises than everybody else, and how are you going to recruit a manager when you can get more money staying in a job that requires less responsibility?” asked Councilman Dion Bracco, who supported the new pay plan and whose council term expires in 2009. “Sometimes you have to put aside what the public has to say…We’re elected to make tough decisions.”
City officials say the “compaction” issue – when employee salaries creep too close to those of their bosses – stems from a cycle of union-negotiated contracts along with merit-based pay hikes and regular COLA adjustments. The pay of unionized employees has grown faster than that of the 42 top-level, non-unionized administrators, Baksa said, because the city’s three unions negotiate new contracts with the city every two to three years.
Sworn police officers, for example, have received a 36.5 percent raise since 2000 but the exempt group has only received a 31.5 percent raise in that same time period, and since union employees can also work overtime, their salaries have risen even faster than their superiors’.
“This causes a problem with morale,” said Baksa, referring to disgruntled police captains and other city managers whose salaries have hovered close to their employees’. “That’s what we’re trying to fix.”
Councilmen are also trying to fix the public perception of the new plan.
“We didn’t go out and give everyone raises,” said Mayor Al Pinheiro. “We’re trying to treat everyone as fair as we can, but we come off looking like fools.”
Since Baksa reported the exempt group’s case to the City Council during a closed meeting Aug. 2, he said he dissolved the part of his contract that awards him whatever raises those employees received to avoid any conflict of interest.
As the city’s representative who merely reported the exempt group’s terms and conditions, Baksa was allowed to attend the closed meeting and said maintaining the 15 and 10 percent thresholds will not be difficult since the city merely has to continue the levels by awarding the exempt group raises in tow with union-negotiated pay hikes.
When the council raised pay ceilings in April to accomplish these percentage standards, Human Resources Director LeeAnn McPhillips and Finance Director Cindy Murphy each got $13,789 raises. Officials said those abrupt upward shifts in pay were unusual and due to the fact that McPhillips and Murphy were reclassified as high-level managers after years of lagging behind their subordinates’ pay raises, according to Bracco.
These high-level manager positions are among the 10 that didn’t receive the 3-percent COLA after a closed Council meeting Aug. 2. Included in this group are Baksa, City Clerk Shawna Freels, Assistant City Administrator Anna Jatczak, Fire Chief Dale Foster, and Police Chief Gregg Giusiana.
This means that they now make 12 percent more than the middle managers who are also prohibited from working overtime, and these middle managers, in turn, make 15 percent more than their employees, according to Baksa. Every city employee earns 10 percent more than their colleagues in nearby cities that are surveyed every five to seven years.
“The exempt group has no union, so police, fire, and municipal workers kept going up in their pay scale, and all we did was take a survey of like cities around the area, and try to bring our exempt group up to industry standards for pay rate,” said Councilman Russ Valiquette. “We may find out that 15 percent is too high. It is the industry standard, but it’s set up so we can look at it again in the future.”
While top city officials will not necessarily reap the highest union negotiations, Baksa said they can rest assured that their 15 percent comfort zone will remain.
“If police get a 3 percent raise, fire another 3, and the AFSCME 5, that doesn’t necessarily mean that all top managers will get a 5 percent increase, but it does mean that they will see an increase in salary that ensures they remain at that 15 percent level,” Baksa said, referring to the American Federation of State, County, and Municipal Employees. “In this case, the 3-percent raise is exactly what the police and fire unions got, so AFSMCE could get higher than this and it wouldn’t matter because there is no AFSCME position that would jeopardize the 15 percent between supervisor and subordinate.”
Gartman remains unconvinced, though.
“This council is just going to have to deal with this exact same issue again,” Gartman warned. “Let’s remember this is an election year. They have just taken a little bit out of the sail to make sure that it does not make this a campaign issue.”
Baksa and Pinheiro contend that the shrinking salary gulf has left managerial positions empty at the engineering and fire departments, and Pinheiro characterized the boss-subordinate gap as the only fair way for all city employees to shoulder the budget deficit.
“We’re not going to take care of the deficit on just the managers’ backs, but everyone’s back,” Pinheiro said, referring to the council’s unwillingness to watch managers forego raises to help replenish city coffers.
Paying police and firefighters 10 percent more than those in Hollister, Monterey, Morgan Hill, Santa Cruz, and Watsonville is worth it, Baksa added, because it cuts training costs that he said “far exceed” the 10-percent pay difference.
“This keeps us in competition with other cities,” Baksa said. “The employees that transfer laterally (from other cities) come here and hit the ground running.”
But it remains to be seen whether the new changes are sustainable, Gartman said. “They’re just delaying the bad news.”
