Gilroy
– The city’s top administrator and mayor said it is
”
offensive
”
and a sign of
”
distrust
”
in public employees to suggest that a new pay system for city
managers could undermine the best interests of taxpayers.
Gilroy – The city’s top administrator and mayor said it is “offensive” and a sign of “distrust” in public employees to suggest that a new pay system for city managers could undermine the best interests of taxpayers.
Under new “salary schedules” approved by city council Monday night, Gilroy’s roughly 40 nonunion managers – ranging from police captains and the fire chief to the planning director – must always earn 15 percent more than the employees they supervise. Those same managers often represent the city in labor talks with their unionized subordinates.
On Monday night, Councilman Craig Gartman, the sole dissenting vote on the controversial new salary schedule, questioned the wisdom of placing managers in a position where they stand to benefit by ceding ground in salary negotiations.
“The issue of it being a conflict of interest is offensive, because the management employees that sit in on these talks are of the highest integrity and professionalism,” City Administrator Jay Baksa said Tuesday. “It would never enter their minds that they would act in their own self-interest versus that of the city’s.”
Mayor Al Pinheiro pointed out that many managers rose through the ranks and, in the course of their careers, likely found themselves on both sides of the bargaining table during labor negotiations.
“We need to have respect and you need to trust the people that you’ve got working under you, that they’re there to do a job and that includes looking out for the city,” Pinheiro said. “If we ever find it’s an issue, this council has the ability to bring in outside individuals to deal with it. But we also have to deal with the professionalism of people working for us. Let’s not start off with distrust.”
Gilroy is not the only place that links managers’ pay to that of their subordinates, according to Gilroy Human Resources Director LeeAnn McPhillips.
Citing information from Jeff Rothman, a consultant hired to survey pay standards in nearby cities, she pointed to Menlo Park, Richmond, Santa Cruz, and the counties of San Francisco and San Joaquin as examples of governments that also seek to keep a buffer between the salaries of bosses and subordinates. She could not say, however, if any of those agencies had adopted a formal policy calling for a specific percentage difference between pay levels. Salary differences range from 5 percent up to as much as 30 percent, McPhillips said.
The policy adopted Monday night has been criticized for its potential to balloon the city’s payroll expenses, which already eat up more than 70 percent of Gilroy’s $35 million annual operating budget. Under the system, all nonunionized managers are entitled to the highest raise negotiated by any of the city’s three labor unions. For instance, a 10 percent pay raise afforded to the fire union’s members means a similar wage hike not only for the fire chief, but for the city’s finance director, planning manager, information technology director and other department heads. In other words, salary changes at the bottom of the command chain will cascade upward and horizontally – across all departments – any time the gap between supervisor and subordinate dips below 15 percent.
“I don’t want any percentages in there,” Councilman Gartman said Tuesday. “If you can’t hire somebody because your salaries are too low, you adjust the salary, not everything arbitrarily across the board.”
But McPhillips said that the new policy does not trigger ongoing, monthly adjustments based on changes in any individual or union pay rates. Instead, she and Baksa said the policy sets a standard for periodic council review, and that all salary changes remain the final prerogative of council.
“This is a policy we’re shooting for in how we set compensation, but my vision is that any time we’re going to change management salaries as a result of negotiations, it’s not something that’s going to happen automatically,” McPhillips said. “We’re going to be bringing these to council for further review.”
The plan, which also calls for manager’s salaries to stand 10 percent higher than their counterparts in nearby cities, was criticized by Gartman.
The new pay system was negotiated on behalf of council by Baksa and was presented to elected leaders in recent weeks during a series of closed-session meetings.
The new “salary schedules” will cost the city $102,000 for the first six months of the fiscal year. Annually, the city would be on the hook for an additional $206,000 in salary and benefit payments, with the potential for up to $383,000 in yearly costs once all managers max out their earning potential. Those figures do not reflect additional costs that could result from pay bumps linked to union-negotiated raises.
Baksa placed the final salary recommendations on the “consent calendar” for a final vote Monday. During the consent portion of a council agenda, officials typically approve items en masse without public debate, though often council members pluck individual items from the list for discussion.
Baksa said the city has always handled salary adjustments as a consent calendar item. On Monday, Gartman pulled the salary schedules off the consent calendar for additional debate.
The 5-1-1 vote on Monday constitutes a final approval. It could only return for a second vote if one of the members who voted in favor called for a reconsideration vote. Councilman Roland Velasco, who is married to a city employee affected by the new pay system, recused himself due to a financial conflict of interest.
Councilman Russ Valiquette voted in favor of the pay raise despite several reservations. For instance, the councilman disliked the idea of paying a finance director the same as a fire chief, since the latter often makes “life-and-death” decisions. He also shared Gartman’s concerns about the potential budget effects of the pay system. As for the ability of managers who negotiate on behalf of the city, he took a middle ground, saying the burden is now on council to trust its employees but “take what they say with a grain of salt.”
Despite his concerns, Valiquette resisted the urge to oppose or revamp the new pay system.
“This is an exercise on paper in abstract until a few budget years go by and you can see the impact of it,” Valiquette said. “Then we may say, ‘Oh, OK, maybe we need to tweak this.’ ”
