Saturday, October 17, 2009

Question about Town employee compensation

Comments:You have said, and I absolutely agree, that Nags Head&'s employees are our greatest asset. Recruiting the best-of-the-best means paying employees a fair salary and providing top notch benefits to employees and their families, where do you stand on employee compensation and benefits?
I think our salary and benefits have significantly outpaced the private sector on the Outer Banks. In the not too distant past, local government jobs were seen as consistent, reasonably paid jobs with good benefits. The pay and the benefits have risen rapidly in the last 20 years, particularly the benefits. I think you get a lot of job security with a government position, and a good retirement with defined benefits. But I believe we've made it a bit too attractive. Our employees have a defined benefit retirement program through the state, and a 401 K (or the public equivalent). Many employees on the Outer Banks have neither.

The health care costs to the employee are far lower than the private sector typically, and co-pays have only now started to rise in response to increased premium costs. We pay 75% of the family health care coverage, unusual among municipalities in the state, and unheard of in the private sector. It's rare when there is not a COLA increase, and there are merit and longevity incentives most of the time. We've ended up with a cadillac benefits program, and above average salaries at a time when many private businesses and citizens are struggling to stay afloat. No raises was the norm in the private sector in 2009. We continued with a 2% COLA when the cost of living increase was only half that.

I believe we need to hold the line on increases in the benefit package, and we should consider a smaller contribution than 75% to the family coverage. I tend to prefer merit raises, because I think they are more effective at keeping your best employees. I think the career development program has merit, but was not managed well. To reduce our budget in any meaningful way, we have to reduce payroll expenses. I think we can learn a lot from the hiring freeze that is currently in place - when we have vacancies in departments, how is the work prioritized? If the necessary work gets done with 6 less employees, do we really need to fill those vacant positions? If building permit work has fallen by more than 50%, do we need the same number of building inspectors? It seems like it is far easier to hire someone in government than to let them go. I think we are at the point that we need to carefully review the needs of our town, and how we are organized to deliver these services, then make decisions like we were spending our own money.

Bottom line, I think the Town has done very well by its employees over the years, and we've received good service in return. We have to spend these payroll dollars extremely wisely over the next few years, however, as our citizens and taxpayers are all feeling the stress of a poor economy.

This issue demands more than a couple of paragraphs, and I know there will be further discussion in the future. I hope you will offer your thoughts as well.

Warm regards,


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