Our View: Raises, reserves and reservations
June 26, 2012
A still-shaky economy and a significant price tag that would necessitate reserve spending should keep the Steamboat Springs City Council from approving the second phase of proposed pay increases for city staff.
The first phase, intended to resolve compression, passed by a narrow 4-3 council vote last week. It will cost the city $700,000 each year to resolve the pay discrepancies that arise when new hires earn as much as veteran employees.
The second phase, which will be pitched to the council next week, seeks to bring pay for all city employees up to market value as determined by a salary survey of 10 Colorado cities comparable to Steamboat. The cost for the market-rate raises would be $800,000 for the first year, a figure that would grow by $300,000 each subsequent year.
We share the concern of last week's three dissenting City Council members — President Bart Kounovsky and members Scott Myller and Cari Hermacinski — that spending a total of $1.5 million or more each year on employee raises is too daunting during a period of continuing economic uncertainty.
City officials already have acknowledged that the long-term sustainability of the salary increases is dependent on an improved economy. And although Finance Director Kim Weber expressed confidence the first and second phases could be supported with current city revenues through 2016, it would be accomplished through increased reserve spending. Funding the increased salaries in 2017 and beyond would be dependent upon new revenue sources or a reduction in city services.
We're supportive of paying employees what they're worth, and we understand the impact several years of wage freezes can have on staff morale and attrition. But we strongly think that pay increases must be done in a thoughtful and sustainable manner. We're just not yet convinced the proposal put forth by city management is appropriate given the very real economic uncertainties that continue to plague the city and the rest of the nation.