Everett Salary Commission

EVERETT SALARY REVIEW COMMISSION MEETING March 16, 2017, 4:00 PM Mayor’s Conference Room Those present: Commission Members: Chris Adams Tony Anthonissen John Dickson Angie Sievers Kevin Sylvester Bobby Thompson Art Thomson City Staff: Bob Bolerjack, Executive Director Sharon DeHaan, Labor Relations/Human Resources Director Joni Siewert, Labor Relations/Human Resources Department, minutes Christina Wiersma, City Attorney’s Office Guest: Susy Haugen, Finance Manager/Treasurer The meeting commenced 4:00 PM. March 9, 2017 Minutes Commission chair Angie Sievers called for a motion to approve the March 9, 2017 minutes. Bobby Thompson so moved, John Dickson seconded. The motion carried. Budget Presentation, Susy Haugen Susy Haugen gave a brief PowerPoint presentation. The first slide was a pie chart of the 2017 City operating budget. She explained General Government takes the largest piece of the pie at 41%. It funds public services such as City Council, Administration, Police, Fire, Municipal Court, Parks, and Library. The second largest piece of the pie is Enterprise Funds, at 38.3% of the overall City budget. The City’s Enterprise Funds are financed and operated like private businesses, and include Water & Sewer, Solid Waste, Transit, and Golf. At 10.3% is Internal Service, which is one department providing billable services to another. Examples include the Motor Vehicles Division and Telecommunications. John Dickson asked where an expense such as sewer replacement would reside. Susy Haugen replied capital projects are budgeted differently and funded separately. Funds are appropriated with a systems ordinance, and are bound by the life of the project rather than an annual budget. Everett Salary Review Commission 1 March 16, 2017 Tony Anthonissen asked about funding for the Mayor’s taskforce on homelessness. Susy Haugen explained it was introduced in the first amendment of 2016 to reallocate funds, and has since been built into the five-year model. Turning to the Five-Year Outlook slide, Susy Haugen explained that each year Council determines the budget appropriation. The forecast for General Government for 2017 is balanced by law, but deficits are projected for the future. She further explained most of the underexpenditures are accomplished with filling employee vacancies at a slow roll. The current assumption is 20 vacancies per year. Looking at the revenue line in the forecast, Susy Haugen said the City has a good handle on the property tax that will be received, and new construction has made a positive impact on the budget lately. Sales tax and B&O tax are more economy driven. She added that aerospace business can swing the budget numbers. Regarding the expenditure line in the forecast, Susy Haugen said it has built-in cost of living increases for employees, and growth in health benefits costs. She reiterated that the source of underexpenditures has been unfilled vacancies. Chris Adams asked if the City is forecasting a recession at this point. Susy Haugen replied no. They see enough indication that the current level of economic activity will continue for the next couple of years. Bobby Thompson asked about department growth. Susy Haugen replied the level is steady. Tony Anthonissen asked about growth in expenses. Susy Haugen replied there is an increase anticipated for pension benefits and health benefits, much higher than what is anticipated for cost of living. She added cost of living is only a portion of labor costs. There being no further questions, Susy Haugen left the meeting at 4:18 PM. Salary Information Sharon DeHaan distributed updated salary information. The chart on comparison of medical premium cost sharing in other cities contained an error, discovered at the last meeting. Bellingham employees pay .3% of their premium, for both single and family coverage. The chart was also expanded to include the dollar amount the employee pays toward the plan. In response to an inquiry by Tony Anthonissen from last week’s meeting, Sharon DeHaan distributed a chart of how many meetings each city councilmember is required to attend in comparable cities. Research reveals that none of the cities has a requirement, but the majority have a rule that more than 3 consecutive unexcused absences can result in removal from the council. Everett Salary Review Commission 2 March 16, 2017 Sharon DeHaan also distributed a sheet showing cost of living increases for the various labor groups at the City of Everett for 2017 and 2018. She added that most of the information is unknown for 2018 due to not yet knowing the cost of living increase, or due to contract openings next year. Kevin Sylvester asked when the cost of living figure will be available. Sharon DeHaan replied the City uses June to June, so it is not available at this time. She added some cities use mid-year, some December, some CPI-U (which the City of Everett uses), some CPI-W. Chris Adams asked if the City is losing employees to other jurisdictions. Sharon DeHaan replied no, but with police officers especially the City is competing with other jurisdictions to attract new recruits. She added the City is losing people to retirement. Elected Officials Salary Discussion Angie Sievers asked for thoughts. Bobby Thompson recalled that part of the discussion two years ago was concern about the highest paid administrative staff person making more than the Mayor. Sharon DeHaan replied in the past it has been true, and referred the Commission members to the handout comparing mayors’ salaries in the region. At the bottom is a chart comparing the salary of the Chief Administrative Assistant (CAA, deputy mayor) to the Mayor’s salary; she observed it is very close, but not as much as it used to be. The chart also shows the Executive Director’s salary, which is right behind the CAA’s. Angie Sievers asked if that gap will close. Sharon DeHaan replied it depends on what the Commission does. She said the City will not consider appointive wages until November. Angie Sievers recalled the Commission increased salaries two years ago. Sharon DeHaan gave the historical information based on the charts that a couple of Salary Commissions ago the members gave 0% to the elected officials and only increased pay for the Judges. That coincided with a huge recession in 2008, when the elected officials came to the Commission and asked for no increase. Chris Adams added a budget deficit was discussed as recently as two years ago. Tony Anthonissen voiced concerned about positions that solicit funds from the outside to get elected. He expressed the opinion that when running for public office candidates are not doing it for the money. He questioned whether they deserve an increase in compensation. Further, he doesn’t see why compensation is tied, for if it is tied in the first place then why is the Commission having this discussion? Angie Sievers replied that in part the City needs to continue to be competitive and attract top talent, as it is faced with great challenges such as growth and homelessness. Tony Anthonissen countered someone would still run if the salary was not changed. He continued that people going into elected positions are showing citizens the benefit of their ideas, and are doing it out of a sense of public goodwill. He said over the rest of the City employees this Commission has little say, but this is the one part of the equation that is the Commission’s responsibility. He concluded by saying if someone doesn’t want to run for Mayor because of the salary, so be it. Chris Adams agreed that getting the highest qualified candidates is the goal, and questioned whether there’s something the Commission controls that attracts the highest quality candidates to Everett Salary Review Commission 3 March 16, 2017 run for public office. A 2% salary shift one way or the other doesn’t determine quality, but he said it was a piece of the equation over a 30 to 50 year period. Tony Anthonissen likened elections to popularity contests, heavily dependent upon how much the candidate can get in front of the public. It relies on being in the right place at the right time with the right message. John Dickson said he was concerned about the budget projection. He recalled that the last Commission talked about keeping the Mayor’s salary above that of the people who report to him. But in light of the fact Council has to balance the budget, he wondered what will happen if the Commission increases salaries. What would the effect be on other salaries, and the number of full-time employees? Art Thomson said it sounds like a lot of the gap is made up by not filling vacancies. Chris Adams expressed discomfort. Already there was a bad economic projection, and discussions of an economic slowdown were giving him concern. Angie Sievers compared historical data, and observed that over the last three years both the Mayor and Council received a substantial pay increase. Chris Adams asked if the Commission has to tie a salary increase to anything. Sharon DeHaan replied no, they can say X%. Chris Adams recalled information that the appointive increase is decided in November, after this Commission meets. He said that, knowing the Commission made up some of the compression issues two years ago, he would be interested in a cost of living standard of some type. Tony Anthonissen asked about the formula in effect now. Sharon DeHaan replied 1.8% was the cost of living percentage last year June to June. Tony Anthonissen stated he would argue for a low percentage, if at all, as a large portion of the Commission feels the economy is going to slow down. Angie Sievers clarified, was he suggesting less than cost of living? Tony Anthonissen agreed. Kevin Sylvester asked about compression. Sharon DeHaan replied that in this context it would only compare the next highest staff person’s salary vs. the Mayor’s salary. Angie Sievers added if two years ago the Commission had not provided an increase, that staff person would have made more money than the Mayor. Sharon DeHaan gave the history that some of the reason was because when there were bad economic times the Mayor and other elected officials asked the Salary Commission to not give a raise, which did cause some of the compression. This was during a time the City was looking at laying off people, and they didn’t want a raise if others were laid off. Chris Adams asked if they could add layoff language to the Commission’s recommendation. Sharon DeHaan clarified that the last layoff was first left up to the departments to determine whether they could reduce expenditures or reduce M&O. Each department determined what was best for it. Therefore it would be difficult to tie a raise to a layoff as it would be difficult to define what a layoff would be. Everett Salary Review Commission 4 March 16, 2017 Kevin Sylvester observed that Everett’s and Seattle’s mayors are close in salary. He would have expected more of a difference. Tony Anthonissen did some calculating, and reported the projected increase in revenue is 1.01%, or 1% rounded. He observed it is less than cost of living, but is about what the City is producing. He said that’s a number he could live with. Timeline Chris Adams asked about the agendas for the next couple of weeks. Christina Wiersma reported that on March 23 and March 30 the Judges are coming to address the Commission. Angie Sievers added she would like them to be asked to keep their presentations to 5 to10 minutes. Christina Wiersma reminded that the Councilmembers have been out of town, so she hasn’t heard from them as to whether they wanted to attend any meetings. Angie Sievers said they are also invited to submit written comments. Bobby Thompson asked what would happen if the Commission came to a decision ahead of its timeline. Christina Wiersma said she hasn’t published the second public hearing in the newspaper, but it is on the website. Angie Sievers said they could potentially have the second hearing April 11. She added they have a general direction going in, and could abbreviate the timeline potentially to a public hearing April 11. She anticipates they will know by the end of the next meeting, but they do need to consider public comments. PUBLIC HEARING #1 Angie Sievers opened the first public hearing at 5:00 PM. There were no guests. While waiting, Chris Adams asked about the percentage of healthcare increase. Sharon DeHaan replied healthcare went up 3%. The Commission waited for 15 minutes to give members of the public an opportunity to arrive for the Public Hearing. There were no guests. Chris Adams made a motion, seconded by Tony Anthonissen, to close the public hearing. The motion carried. Chris Adams made a motion, seconded by Bobby Thompson, to close the meeting. The motion carried. The meeting adjourned 5:15 PM. Respectfully submitted, Joni Siewert Everett Salary Review Commission 5 March 16, 2017