The recent news that 30 employees at City Hall are getting a raise is troubling on several fronts.
First, it sends the wrong message and second, it avoids the tough decision.
The management and “confidential” employees have not received a raise since 2008, in an effort to provide a “model” for city hall compensation practices in the face of declining revenues and service cuts brought on by the Great Recession, according to City Manager Ed Tewes.
Now, the employees will receive a 5 percent raise, but three-fifths of that amount will be offset by a simultaneous action to require the same employees to pick up more of the costs of their benefits. Specifically, the 3-percent “giveback” consists of either reduced health insurance flex benefits or reduced contributions by the city to their retirement benefits. That’s consistent with the council’s long-term employment strategies, Tewes said.
In this economy, giving raises does send the wrong message when much of the private sector continues to suffer.
According to Fortune magazine, Wall Street could eliminate nearly 21,000 jobs from their securities divisions in New York alone. Worldwide cuts could be even larger. Recruiters say big banks are in the process of finalizing their downsizing plans, and that layoffs could start soon.
And, last month, Yahoo Inc. announced it will slash 2,000 employees, or 14 percent of its workforce – the deepest cuts in its 18-year history.
So, the message in Morgan Hill is that the recession is over and everything’s back to normal?
During the debate over the outdoor smoking ordinance, Councilman Larry Carr said exempting the Outdoor Sports Center is the “absolute opposite” of what the outdoor smoking ordinance was meant to achieve. “It sends the wrong message for Morgan Hill, for our kids and what we’re trying to achieve,” Carr said.
Apparently, that message is important, but sending a message about fiscal responsibility is not.
And, the approval avoids the really tough decision. It’s long past time to force employees to pay more toward their retirement and benefit package, without getting a raise to offset the increase.
City staff pointed out that the raise was also necessary to retain employees and compete with surrounding cities and agencies. Since 2008, the rate of management and confidential staff leaving their employment with the city for voluntary reasons has grown to about 30 percent. So what. The candidate pool is greater than ever, and here’s betting the city can find someone competent to do just about any job at City Hall.
Giving raises can be accomplished if they are tied to economic triggers that show a steady and continued increase in revenues, and those salaries should be lowered when sales tax and other revenue fall.
It’s long past time to get creative. If the city is flush with cash, then let’s fix potholes, add a police officer or two, fix the city’s infrastructure and get any delayed projects moving.
That would send the correct message.
