Our View: Pay freeze has long-term impact
February 4, 2012
Steamboat Springs — 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.