After hearing strong opposition from its constituents during the past two weeks and taking a closer look at the city’s financial health, Steamboat Springs City Council reversed its stance on a first round of pay increases for city employees Tuesday night, deferring further discussions on the matter until its full 2013 budget hearings in October.
Council voted, 5-2, to reject a funding ordinance that would have spent $1.05 million over the next 18 months to give some employees raises with the intent of restoring balance to the city pay scale.
Councilwoman Cari Hermacinski urged her colleagues to delay any decision until the formal budget process is under way this fall and the full ramifications for city finances and its reserve fund can be better understood.
“Why is it an emergency that we need to solve this problem right now and pass an appropriations ordinance that makes it effective immediately?” Hermacinski asked. “We’re three months away from our 2013 budget,” process.
Council member Sonja Macys disagreed, saying the resignation of key employees — the public works director, a city planner and several police officers and firefighters — were a sign that the city needs to take some action.
“My feeling is it is time to address this. It is urgent,” Macys said. “Our (budget) reserves were built on the backs of our employees, and I firmly believe that. How many really good employees do we have to lose before we say we have a broken model?”
Council had voted, 4-3, on June 19 in favor of a plan to give employee raises to address the phenomenon known as wage compression that arises when new hires are brought in at salaries very close to those of veteran employees whose wages have been frozen for several years.
However, when it came time to put money behind those intentions Tuesday night, two council members changed their votes. Councilman Kenny Reisman and Walter Magill, who previously voted to address compression, created a new majority along with Hermacinski, Council President Bart Kounovsky and Council President pro-tem Scott Myller in rejecting the funding ordinance.
Council member Kevin Kaminski joined Macys in voting for the compression raises.
Most of Tuesday’s discussion was devoted to a second round of pay increases intended to make the city’s salary structure competitive with other mountain resort towns. Those pay increases would have cost $800,000 this year and would grow by an estimated $300,000 annually.
Reisman said he has heard from dozens of his constituents and the sentiment has been overwhelmingly against giving the pay increases.
City Manager Jon Robert expressed concerns that trend lines described by declining city sales tax revenues and rising overall costs of employee compensation were coming perilously close together.
“When those lines cross it becomes unsustainable,” Roberts said.
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com