Our View: Pay freeze has long-term impact

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Editorial Board, Sept. 25, 2011, to January 2012

  • Scott Stanford, general manager
  • Brent Boyer, editor
  • Tom Ross, reporter

Contact the editorial board at 970-871-4221 or editor@SteamboatToday.com. Would you like to be a member of the board? Fill out a letter of interest now.

— December’s recently released sales tax revenue report for Steamboat Springs put an exclamation point on another year of better-than-budgeted revenues for the city, which finished the year 4.3 percent ahead of 2010’s sales tax revenues and a whopping 16 percent ahead of what was budgeted for 2011.

City government leaders deserve continued praise for their fiscal prudence during the four years of economic struggles both locally and nationally. But as it enters the fourth year of employee furloughs and pay freezes, the city must be wary of the long-term impact staff compensation issues can have on morale, retention and the ability to attract top-tier candidates.

The city is in the midst of a salary survey update that, when complete, is expected to provide a plan for staff pay for the 2013 budget. The last salary survey conducted by the city was in 2008 and revealed that 48 percent of city employees were paid below the minimum recommended range for their position.

Faced with a downward-spiraling economy, the city enacted pay freezes in 2009 in addition to mandatory furloughs that reduced employees’ hours, and pay, by 10 percent. Those furloughs remain in effect, though the city has provided bonuses to its employees the past three years. Also important is that longtime Steamboat Springs Human Resources Director John Thrasher, who retired last week, said the city’s benefits package remains competitive in the marketplace. He also said a recent staff survey indicated that employees would be reluctant to return to 40-hour work weeks. Most city employees work four nine-hour days and have Fridays off.

So where does the city go from here?

It has reduced the number of employees from 306 to 254 since 2008. Given the economic conditions, decreasing workloads in some departments and the fact that services for constituents don’t seem to have been compromised, the staff cutbacks were appropriate.

But like any good employer, the city can’t keep pay flat forever. City leaders soon will have to figure out how to restore base pay increases for deserving employees, not only because it’s the right thing to do but also because the city risks becoming less competitive in the job market.

Comments

Scott Wedel 2 years, 2 months ago

So a study four years ago that said city staff was underpaid which was then followed by 4 years of pay freezes and furloughs without yet causing issues of retention is not to be regarded as having been proven false?

The only hint of a retention issue that I see are people retiring. I doubt we want to commit to paying people so richly that retirement and collecting relatively generous public pensions is an unattractive option.

It is not very accurate to compare salaries with "comparable" cities. Those sort of studies are almost always is used to justify substantial pay hikes. The far more relevant test of salary scale is to look at the quality of applicants for open positions and to look at what skilled employees are doing when leaving. If applications for open positions are few and are not or are minimally qualified then the pay scale may be too low. If skilled employees are leaving to take lower ranking jobs at local businesses then there would be a pay scale issue.

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sledneck 2 years, 2 months ago

I agree with Scotts statement. I would add that this 4 year period might serve as a study of it's own. Pay can (and should) be kept flat for whatever perion that trend remanis for the private sector. Not many private-sector workers are getting raises right now and there is a line of unemployed citizens who would love to have a City job stretching all the way down the block.

Furthermore, I really wish the Steamboat Pilot would, at least occaisionally, approach these matters from a more libertarian point of view. Why must we always discuss a 5%-11% revenue surplus in such Pavlovian terms as allowing or excusing more expenditure, even when there is no substantive evidence of such a need?

Why can't we discuss this from a perspective that perhaps the taxpayers have been "overcharged" 5%-11% and hence we could reduce the tax burden accordingly? Maybe this is an opportunity to reduce the burden on struggling families? Seriously, can we at least once-in-a-while approach it from that perspective, Pilot???

Or, must every discussion start from an ASSUMED BASELINE that someone else knows better how to spend taxpayers' hard-earned money than they do; even that which is above and beyond proven, legitimate expenses????

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Scott Wedel 2 years, 2 months ago

YVB, Even progressives that believe in government power being used for public good do not believe in overpaying government employees. Progressives would want to have more money available for other progressive programs.

The people that want to generously pay government employees are government employees and those that are too naive to question government employee surveys saying that government employees should be paid more.

What is disappointing in the editorial is a newspaper with no skepticism when given self serving studies from local organizations. The newspaper believes Chamber, MainStreet, ski area, city and county government, sheriff's dept, ACET and so on without question.

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ybul 2 years, 2 months ago

While yes the fed has been printing money, the velocity of money has been collapsing which is deflationary, which in order to prevent a deflationary depression the fed is trying everything it can to stop that from happening.

The common belief that people should get a pay raise every year is based on the inflation caused by the increases in monetary and credit supplies. If that did not occur then annual pay increases would not need to happen to maintain the same quality of consumption.

The "fed's" hidden tax on the destruction of the purchasing power of the dollar is a major issue that most do not even think about. They just assume that prices are going to rise over time - which does not need to occur.

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BeCoolHoneyBunny 2 years, 2 months ago

Inflation rate for 2011 was over 3%. City employees received a 1.5% COLA one-time payment at the beginning of 2012. So, wages are not flat, with inflation they have decreased by more than 1.5% in the last year.

Inflation was 1.64% in 2010, -0.34% in 2009 and 3.85% in 2008

http://inflationdata.com/inflation/inflation_rate/currentinflation.asp

I do also agree with sledneck's and Scott W.'s points.

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cindy constantine 2 years, 2 months ago

Ahhh to be employed by the City, County or even Worldwest Limited Liability Co. (owner of the paper). As a couple owning a business how about some actual expenses. First, the luxuries: $12,000 annual IRA contributions, $7,150 Health Savings Account annual contribution, $11,600 annual Health Insurance premiums (with $10,000 deductible). The "luxuries" are never guaranteed because we have the REQUIRED expenses of owning a business, rent, payroll, utilities, inventory, taxes, etc, etc etc. This is the look of many of our local residents who put in 50 to 60 hours a week to try and just stay afloat much less to fund the "luxuries". And there is no price to be put on the risk of doing business everyday!! Is it too much to ask our local paper to try and have a REALITY DOSE about their community?????

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cindy constantine 2 years, 2 months ago

And further, there are no "chain stores" on old town Lincoln, Yampa or Oak Streets so hundreds of small business' have the same "luxuries" to fund as we do. What is wrong with you people living the 40 hour (or less) "cubicle" life telling us taxpayers who do not have the benefits about pay raises? I appreciate the downsizing at the City and have not noticed any decreases in quality of service. Any one who has a job should be "dam" happy about it and be all that much more productive!!

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housepoor 2 years, 2 months ago

He also said a recent staff survey indicated that employees would be reluctant to return to 40-hour work weeks.????

So they are going to give a raise before they go back to 40hr work weeks?

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BeCoolHoneyBunny 2 years, 2 months ago

You're right cindy. You're neighbor should struggle too. Forget that the rich are getting richer. If I hurt so should the next guy.

Be happy you have a job, don't worry about improving your situation. Put your head down and go to work!

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the_Lizard 2 years, 2 months ago

Cindy....two thumbs up.... Standing ovation from the hinterland.

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Scott Wedel 2 years, 2 months ago

Cindy You do realize that the historical preservationist position was eliminated so now the historical character of downtown has not been preserved and thus tourism has significantly declined? Or at least that was the justification for the position in the first place.

I think it is indicative of the level of fluff in the city's budget that they were able to make the required cuts without noticeably affecting police, fire, snow removal or even bus service. What cuts were made that came close to hurting? Less money for summer concerts resulting in less well known bands performing in the free concert series?

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BeCoolHoneyBunny 2 years, 2 months ago

Another point is that the city is giving cost of living increases now as a one-time payment instead of increasing base wages. As inflation compiles each previous year's inflation to the current year, currently city wages do not.

So, total inflation from December 2008 to December 2011 is 7.35%, but wages are only 1.5% more than 2008 wages.

These are just the facts, draw your own conclusions.

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cindy constantine 2 years, 2 months ago

My conclusion is you work for the City where you receive paid vacations, medical benefits, pensions and job security. Lucky you!!

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Fred Duckels 2 years, 2 months ago

In years past the city would send out questioneers to the private sector to guage the labor market. This practice ended long ago, as I suspect that the results were not satisfactory. If parity is not adhered to I think that this will breed resentment. The practice today seems to compare other municipalities rather than the local market.

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John St Pierre 2 years, 2 months ago

Many of the points made are true and agreeable.... but there are alot of "part time" & "seasonal" who do not get any of the benefits... and carry alot of the work load.....

The City needs to focus and throw manpower as it were to collect what it has coming to it in the first place...... If the Pilot wants to do some reporting... they should start looking at what is a timeshare unit and start collecting Lodging tax..... With the change over of many Timeshares to "points" system.... the loss of "overnight Tax" is significant.......

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