I’m a little behind in my meeting transcriptions due to lots of exciting year-end activities going on at our house. Some sad endings, along with some new and exciting beginnings. But life goes on around us in city government, doesn’t it?
I just had a chance to review the May 23, 2022, city council meeting, and it’s apparent that the city manager was responding to some of the criticisms discussed in my post titled “Dear City Manager, If You Want Taxpayer Support for Taxpayer-Funded Raises and Benefits, Please Be Honest with Us.” That post can be found here: https://www.clarkstonsecrets.com/dear-city-manager-if-you-want-taxpayer-support-for-taxpayer-funded-raises-and-benefits-please-be-honest-with-us/. I appreciate the fact that he reads what I write and considers it.
I made a number of points, and most of the factual references below are taken from that post. Unfortunately, the city manager considered, glossed over, and minimized two of my points in the May 23, 2022, meeting and ignored the rest. I can write that off to either inexperience or deliberate obfuscation. I guess you can choose which.
In that previous post, I mentioned the extremely generous time-off policy that the city employees enjoy, something that isn’t matched by any other public or private sector employer that I’m aware of. I would note that the city manager’s daughter commented on that post to tell us that she enjoys even more than 14 paid holidays per year, but when asked for clarification, she admitted that she works for a non-profit, something that would be hard to categorize as either public or private.
In addition to 14 holidays, city employees receive vacation under a fairly standard schedule, except that the salaried employees who are in the office only four days per week get an extra day added to each vacation week because the employee manual was never updated to reflect that the office is now closed one day per week. Even though this failure to change the manual benefits the city manager, clerk, and treasurer, I used our city manager as an example of how this plays out. With 14 holidays, 6 sick days, and 15 days of vacation, our city manager receives 35 paid days off per year, which is equivalent to almost 17% of his salary. When suggesting that he is underpaid in comparison to other communities, the city manager doesn’t mention the huge leave time benefit that he and most of the other employees receive. (Even though the sick and vacation time policies are supposed to apply to only salaried and full-time employees, I’m going to guess that they also have been informally applied to the part-time DPW worker and the administrative assistant.) And, as Cory Johnston pointed out in a comment to my original post, the city manager also doesn’t present the additional employment costs that taxpayers pay for all employees, such as social security, Medicare, workman’s compensation, and unemployment taxes. (The DPW supervisor also receives health insurance.)
I also criticized the city manager and the city council for the claimed 44 hours per week that the city manager says he actually works, though I would note that he admitted in a FOIA response that that is an estimate because he doesn’t actually track his time in any way. I made the request because I was simply curious to find out if he had anything substantive to back his workweek hours claim. (While salaried employees such as our city manager don’t punch a timeclock and aren’t required to record their time, tracking hours might be a helpful management tool to identify areas of waste, inefficiency, calculate project costs, and support manpower or outsourcing requests.)
If there is more than 32 hours of work per week because things have been piled onto the city manager’s shoulders (and neither the city council nor the city manager are apparently objecting to that), then someone should explain why the city manager should not be considered full-time, just as the DPW supervisor is – entitling him to health insurance. Wouldn’t that be fair? The city manager may well decline city health insurance coverage because he may have better coverage from his former employer in retirement, but that doesn’t change the weekly hours problem and his potential eligibility for healthcare insurance.
In his budget presentation, the city manager glossed over the fact that the retirement savings plan that he’s proposing, if utilized by city employees, would boost their salaries well over the overall average 3.4% that he’s proposing to an overall average of 5.4%. This substantially exceeds the 3.2% average increase for government employees that the Bureau of Labor Statistics reported on April 29, 2022 for the March 2021-March 2022 time period.
It’s dishonest to dismiss the 2% retirement savings plan as just a budget line item of $3,700 per year because it’s really part and parcel of the wage increase being proposed. The stated reason for a retirement savings plan is employee retention, but based on what’s happening around us, I don’t think that’s going to be an issue for too much longer. That’s not to suggest any disrespect our city employees, because I don’t feel that way at all. I just think that budget time is an opportunity to look into the next year, and all things should be considered, even predictions of a recession, a cooling off of the housing market (since sales of Clarkston homes increase our revenue), and the first reports of planned layoffs throughout the private sector (because government layoffs inevitably follow private sector layoffs).
Here are some recent articles suggesting that there are some really dark clouds on the horizon and that employee retention probably isn’t going to be a continuing issue:
3 Signs the Housing Market is Slowing Down, Business Insider, June 4, 2022 (last visited 6/16/2022):
Wall Street Slammed as Recession Worries Mount, Reuters, June 16, 2022 (last visited 6/16/2022):
https://www.reuters.com/markets/europe/futures-slump-recession-fears-loom-2022-06-16/
A Wave of Layoffs is Sweeping the US. Here are Firms That Have Announced Cuts So Far, From Compass to Coinbase, Business Insider, June 14, 2022 (last visited 6/16/2022):
https://www.businessinsider.com/layoffs-sweeping-the-us-these-are-the-companies-making-cuts-2022-5
I think we can all remember what it was like to go through the last recession, since it didn’t start all that long ago. It was awful, because cumulative layoffs have a negative rippling effect throughout the economy. Recessions always happen, and it looks like we’re just about there again. Employee retention is less of an issue during a recession because there are so many qualified people available who are looking for work, more than there are jobs available.
As I said earlier, the city manager did specifically address two things that I wrote about – misrepresenting the administrative assistant’s salary and purposefully limiting government salary information inputs to only those few communities that voluntarily choose to participate in the Michigan Municipal League’s annual salary survey. Whether or not it was deliberate, the city manager seems to have missed my points entirely.
The Salary Structure Problem Created by the Administrative Assistant’s Salary:
The city manager first addressed the way that he reported the administrative assistant’s rate. In May and June of 2021, he told us that she made $11.54/hour and he wanted to raise her rate to $14.42/hour due to increased responsibilities that were transferred to her from the treasurer (even though he’d already raised her rate months before and I don’t recall that salary increase being presented to the city council for approval).
On May 9, 2022, the city manager told us that the administrative assistant made $14.42/hour and he proposed to increase her rate to $14.86/hour. After I posted a copy of her paycheck showing that she actually makes $17.00/hour (and has been paid at that rate since January 2021), the city manager admitted that the administrative assistant is in fact paid $17/hour. That annualizes to a rate of $35,360/year, and it doesn’t matter that she works part time. The question to be asked is whether a rate that would annualize to $35,360/year is an appropriate rate to pay an administrative assistant who works for a small municipality or in the local private sector (since that’s where a replacement administrative assistant would likely come from). Perhaps it really is an appropriate pay rate given her job responsibilities, but that question was never answered.
The larger problem with a $17/hour rate for an administrative assistant is where that rate fits into the existing salary structure. Using the city manager’s own hourly rate numbers, which I criticized in my previous post, this has thrown the salary structure out of whack. As part of his response to my post, the city manager modified his employee salary chart to reflect the $17/hour rate for the administrative assistant. However, he failed to mention all of the changes he made to the chart to the city council and the public, and I’m pretty sure that was by design.
In addition to correcting the administrative assistant’s rate, the city manager also reduced the number of hours the clerk works per week from 35 to 32, allowing him to express the clerk’s current rate as $18.03 (rather than the $16.48 he previously reported, which was lower than the administrative assistant’s actual rate). In addition, he reduced the administrative assistant’s hours on the chart from 20 hours per week to 17 hours per week so the annualized rate would appear lower after it was multiplied. This allowed him to claim that my criticism of his failure to include the actual $17.00 rate “didn’t change [the numbers] at all.” Well I guess it wouldn’t, if you change the multipliers.
I’ve inserted a copy of the city manager’s current and proposed salary rates from the May 9, 2022, presentation as well as a copy of the current and proposed salary rates from the May 23, 2022, presentation so you can see the changes the city manager made to the clerk and the administrative assistant information for yourself.
From May 9, 2022 (clerk rates are $16.48 and $16.98 for 35 hours per week and administrative assistant rates are $14.42 and $14.86 for 20 hours per week):
From May 23, 2022 (clerk rates are now shown as $18.03 and $18.57 for 32 hours per week and administrative assistant rates are now shown as $17.00 and $17.51 for 17 hours per week):
I doubt that the clerk’s and administrative assistant’s job hours have actually been cut. So why would the city manager make these additional changes? Perhaps because the city’s salary structure is screwed up as a result of the January 2021 salary increase he gave to the administrative assistant as compared to the rest of the city employees, and the city manager apparently doesn’t want to address that issue? That is the only reason that I can think of for the stealth changes. And if the chart can be so easily manipulated to give the city manager his desired result, should we trust the other representations on the chart?
The Salary Data Input Problem:
The city manager also addressed my criticism of the use of taxable value versus population levels taken from the very limited Michigan Municipal League survey to establish benchmark salary rates. I suggested that population was the appropriate comparison, because it represents the number of “customers” served by city hall. If you use taxable value, this suggests that the number of people served has no bearing on how much the employees should be paid – instead, the city manager wants you to focus on the way that home values are calculated.
To support his claim that he was using the proper benchmark, the city manager alleged that there is a municipality in the upper peninsula with what he thought was 888 residents, an annual budget of $18,000, and the city manager claimed that other city pays its city manager more than he is paid. The city manager had to correct his $18,000 annual budget number to what he guessed was $180,000 after councilmember Fuller asked how this city could afford to pay someone far more than the amount of their annual budget. (I’m glad that at least someone was paying attention!) Our city manager also claimed that the level of work in this unidentified city is not the same as Clarkston. Apparently not, because the city manager also admitted that the city manager in this unnamed city with dirt roads and no sidewalks does the work of the city manager, the clerk, and the treasurer.
I made a FOIA request for the Michigan Municipal League survey results that the city manager relied on, and I’ve linked to it below for you to see. The yellow highlights were placed there by the city manager after he sorted the communities by his preferred taxable value metric. You can download the spreadsheet and sort them any way you wish, and your guess is as good as mine which unnamed city with dirt streets and no sidewalks the city manager was using to make his point because there isn’t any city that really matches these numbers. Please note that the information the city manager used to compare other Clarkston job positions to the survey can be found by clicking the tabs located at the bottom of the spreadsheet (and you may have to “unhide” some columns if you want to see all of the data points):
Unfortunately, the city manager missed my point entirely. He lamented that he doesn’t know of any other survey that is strictly municipal. And gosh darn it, what’s he supposed to do? Look at Crain’s Weekly for private sector information?
Um, no. That wouldn’t work either.
As I mentioned in my earlier post, I used the CitySearch website to look for similarly sized cities in Michigan with a population between 800 and 999 to compare to Clarkston’s population of 882. There were eight – Saugatuck (963), Caspian (871), Grant (881), Au Gres (863), Onaway (852), Lake City (850), Stephenson (848), and Gobles (811). When looking at other public bodies in Michigan that were not cities, I found many, many more in our population range: Lake Linden (994, village), Attica (994, township), Lawrence (986, village), Elsie (978, village), Westphalia (944, village), Dryden (943, township), Central Lake (940, village), Ossineke (938, township), Hesperia (938, village), Mayville (925, village), Onsted (908, village), Oscoda (903, township), Augusta (903, charter township), Morrice (902, village), Deerfield (880, village), Mendon (860, village), Farwell (859, village), Baroda (856, village), Marian (855, township), Shoreham (854, village), Pentwater (849, village), Sanford (847, village), Ubly (832, village), Pellston (832, village), Otisville (832, village), Burr Oak (820, township), Mackinac City (808, village), and Deckerville (802, village). (Even though the Michigan Municipal League survey included Springport [800, village], I didn’t include it in my list because CitySearch indicated the population is 792 and I wanted to be consistent.)
The Michigan Municipal League survey only included four other cities with a population similar to Clarkston’s population – Mackinaw City, Pentwater, Grant, and Caspian. That’s not very much data, and we would need more facts about what kind of work is included in the job titles within these cities.
The city manager makes a good point about comparing apples to apples when reviewing salary survey data, but he dismisses the way to get a more accurate comparison, apparently because he doesn’t feel it’s worth it to the taxpayers to ensure that we are paying our employees appropriately. If you only have one survey that doesn’t provide you with sufficient information, then you have to go out and get the information yourself. Since we are comparing government entities where this type of data is public information, this could be done through a FOIA request, a letter, or a phone call. I actually agree with the city manager that population (or taxable value) alone doesn’t provide a whole picture – the unnamed city whose city manager made more than Clarkston’s city manager was doing the work of three of our positions. I think that justifies more pay, don’t you?
Here’s another example. I happen to know that the city manager in the City of Au Gres, with a population of 863, made $57,125.06 as a base wage last year ($60,932.21, if you include bonus). He also receives 8% of his gross wages paid into a retirement plan, and the city pays 90% of the health insurance premium for the city manager and his spouse ($1,951 per month). But you know what else I know about the City of Au Gres? The city manager is indirectly responsible for a library, a park, a campground, and a harbor, and he’s directly responsible for a clerk/treasurer, DPW/water & sewer superintendent, full and part-time DPW employees, and an administrative assistant to the clerk/treasurer. How do I know this? By looking at the city’s website, making a FOIA request, and having a follow up email discussion. Knowing these additional details certainly puts the salary and benefit difference between Au Gres’ and Clarkston’s city managers into perspective, doesn’t it?
My bottom-line point on the Michigan Municipal League’s voluntary survey is that it’s interesting to review, but it should not be used to justify salary decisions for Clarkston if the city manager refuses to spend the time to collect data to supplement it on an apples-to-apples basis. It would be more honest to simply look at the Bureau of Labor Statistics to find the average salary increase in the government sector, consider Clarkston revenues, review what’s going on in the local market that would justify a higher or lower percentage increase for Clarkston employees (since DPW employees and administrative assistants would likely come from the private sector), establish a general salary budget increase in that amount, and award employees more or less of a percentage of that budget money based on an annual performance appraisal. Our city manager admitted that he tries to keep overall salary increase recommendations within the percentage of annual Clarkston revenue increases, so the voluntary Michigan Municipal League survey isn’t even all that important to the city manager – other than allowing him to inappropriately make unsubstantiated generalizations about how competitive our salary rates are (or are not).
I’m not sure if the city council can clearly see through the annual magic show that city manager puts on to get to the bottom-line salary increases that he actually wants. While city councilmembers are certainly entitled to rely on the city manager, they shouldn’t accept everything that he says at face value without question. After all, they all work for the taxpayers, and we’re entitled to honesty, not obfuscation.