I’m writing this shortly after publishing the unofficial transcript of the May 9, 2022, city council meeting during which our city manager introduced increased wages for city employees and a brand-new, taxpayer-funded retirement savings plan. (You can read the informal transcript by clicking on this link:
https://www.clarkstonsunshine.com/may-9-2022-city-council-meeting/.)
I never cease to be amazed that none of our city council members seem to do any homework or ask any questions that aren’t biased toward more money and more benefits for city employees. If you attend or listen to a city council meeting, you just might think that this is all about the city employees and city council versus the rest of us; you know, the people paying for all of it. Other than councilmember Fuller who came from the public sector (a government school district), I suspect that all of them – including the city manager – are erroneously comparing Clarkston employee salaries and benefits with the private sector (the large non-government world where everyone else works).
I am sympathetic to inflationary pressures, and I know what it’s like to be a government employee – I was one for two decades. During that time, I went for years without a salary increase. Why did that happen? Because the local taxpayers and the public body I worked for were having significant financial hardships. Did people leave for other jobs because of this? Of course they did. But you know, there are all kinds of reasons why employees quit one job for another. Let me share a secret, gleaned from a decade and a half in Human Resources – most people usually don’t start looking for a new job because of salary dissatisfaction. They start looking for greener pastures when they’re not satisfied with their work, their coworkers, their management, or even things like the amount of commute time.
I continued to work as a government attorney, even though I was getting small or no pay increases, benefit cost sharing increases, and overall benefit reductions, simply because I liked the work, my employer, my management, and my coworkers – knowing that I could have gone to work for a law firm and doubled my salary. (I worked at two law firms before going to work for the government and took a very large cut in pay when I began working for my first public employer.) The fact is, I enjoy public service (with the operative word there being “service”). And perhaps because they knew they couldn’t compete with the private sector, I found my government managers to be very family-friendly, offering flexible hours and (mostly) leaving me alone when I was on vacation. I also spent a lot of wonderful years in the private sector, working in the automotive and pharmaceutical industries in labor and employment management. It wasn’t better or worse, it was just different. And my non-government jobs paid very, very well.
Clarkston Has Very Generous Time-Off Policies
Here’s something that may surprise you to know. I believe that city employees should receive reasonable salary increases, and I’ve always been supportive of that. I lost a lot of sympathy for our city employees when the city council approved an additional holiday, bringing the total to fourteen holidays per year. I defy you to find any employer, in the public or private sector, that gives its employees fourteen paid holidays off. I also lost respect for the city manager when I watched his presentation about the additional holiday. Not only didn’t he ask for it in an honest and forthright way, but he also didn’t tell the city council what it would cost the taxpayers to add it. He presented as a simple change to the employee manual (along with two minor changes that no one cared about). The language that he used during his presentation suggested that he was asking for nothing more than what the county, state, and federal government already had, drawing our unquestioning council into a quick approval (with no questions). But that wasn’t true, and I wrote about it here: https://www.clarkstonsecrets.com/your-city-employees-now-get-more-time-off-than-you-do/ And your city employees now get all the following paid days off – New Year’s Day, Martin Luther King Jr. Day, President’s Day, Good Friday, Memorial Day, Juneteenth (referred to as “June 19teenth” by the city), July 4th, Labor Day, Veteran’s Day, Thanksgiving Day, Day after Thanksgiving, Christmas Eve, Christmas Day, and New Year’s Eve Day. You can find the list of paid holidays at page 8 of Clarkston’s policy and procedures manual, linked here:
http://www.villageofclarkston.org/DocumentCenter/View/1149/Policy-and-Procedures-Manual-11-24-2021
Do you get a paid day off on all those days?
Until the additional holiday issue arose, I’d really never looked at how much paid time off our employees are receiving. Before I get into that discussion, you should know that only the DPW Supervisor receives health insurance (because he’s the only full-time employee), and the cost to the taxpayers is less than it could be because he’s unmarried. But, based on what the city manager has said about the value of the work that the DPW Supervisor does for the city, I won’t quarrel about that.
Ever so slowly, the city manager has woven a web of time-off policies that are quite expensive for the taxpayers. Paid time off has both a value (from the employee’s perspective) and a cost (from the employer’s perspective). Let’s use a simple example – I pay you $100 a week for five days of work, but I give you one day off a week as a paid day off. You have effectively received a salary increase, because you are being paid the equivalent of $25 per day for four days of actual work (rather than $20 for a day of work if you were working all five days, and you get to sit by the pool on that fifth day, which is sweet!). But – there is also a corresponding cost to the employer through the loss of productive work time. In my example, the employer is paying $100 but only getting four days of productivity. Assuming the one-day loss of productivity relates to work that really needs to be done (because you wouldn’t need a five-day per week employee if it didn’t), the employer has increased its labor costs by 20% because it lost one of five needed workdays every week. This means that the work needs to be shifted to someone else, performed at an overtime rate, or neglected and backlogged.
The paid time off issues began in earnest when the city manager decided the city should close every Friday three years ago. Though he now practices revisionist history and suggests that this was done simply as a cost-saving measure, the June 24, 2019, resolution that he presumably drafted, titled “Administrative Staffing Proposal,” stated that the reason for the change was “to address two recent retirements and the need to offer competitive compensation for the purposes of employee retention.” So, no more Friday work and pay raises – yay! (Yay for the employees, not the taxpayers, because we lost Friday access to city hall.) And should one of those Fridays that the office is closed happen to fall on one of the fourteen paid holidays, the office will close an extra day during that week.
Even though our salaried employees only need to come to work over a four-day period (because the office closure gave them Fridays off), the city manager didn’t adjust the city’s vacation schedule to account for the change (and he’s one of the employees who benefitted from that). Page 8 of Clarkston’s Policy and Procedures manual (linked above) lists the vacation schedule, which applies to “full time and salaried employees” and provides paid time off per the following schedule:
After one year One week (5 days)
After two years Two weeks (10 days)
After five years Three weeks (15 days)
After ten years Four weeks (20 days)
Did you catch that? By defining weeks of vacation using five-day increments, the amount of vacation time per the schedule is 25% higher than it would be if the schedule were set at weeks, rather than days. This gives all our four-day-per-week employees extra vacation days. Full-time and salaried employees also receive six sick days per year, which is pretty standard and not excessive.
Our city manager, treasurer, and clerk are salaried employees (meaning they are paid a fixed amount of money no matter how many hours they work in a week) but not considered full-time employees by the city. Our DPW supervisor works full time, 40 forty hours per week. We also have a DPW laborer and a treasurer/administrative assistant who are hourly employees (paid only for hours worked), so they aren’t eligible for this vacation schedule under the terms of Clarkston Policies and Procedures manual (linked above) because they are neither full-time nor salaried employees.
When you consider employee salaries, you have to factor in just how much time off our city employees receive, especially when the city manager creates charts that purportedly show the number of hours salaried city employees work at budget time (more on that later). Clarkston’s paid time off policies are very lucrative, especially for the city manager, treasurer, and clerk. For example, our city manager receives 14 holidays, 6 sick days, and 15 days of vacation (because he’s worked for us for 5 years now), giving him 35 paid days (or almost 9 weeks and over two months), off per year, and the paid time off comprises almost 17% of the city manager’s annual salary.
The chart the city manager prepared for budget review claims he works 44 hours per week. We cannot vet that claim, since, unlike employees paid by the hour, salaried employees aren’t required to keep time records of the time worked (since they are paid the same no matter how much – or how little – they work). I made a FOIA request for records that would prove the city manager worked an average of 44 hours per week, and the city promptly responded to it. Confirming my suspicions, the city manager admitted that because he is “a salaried employee, [his] actual hours worked are not documented.” I was provided with a chart that guesstimated how much time was spent on four different activities per week, which is not substantiation for those hours.
The City Manager’s Budget Proposals
I’m going to discuss what the city manager said, and what he presented to the city council to support salary increases. He told us he was relying on a salary survey from the Michigan Municipal League (MML). The city manager only included his salary comparison on the information presented, so that’s what I’ll use as well, though he told us he did same analysis for all employees. To be fair, the city manager also told us this salary survey is two years old because a survey wasn’t conducted last year.
There are some serious issues with the city manager’s presentation.
The city manager uses taxable value rather than population to boost his salary comparison numbers:
Here is the city manager’s first chart that was presented in an attempt to try to show how underpaid he is (taken from page 26 of the May 9, 2022, city council packet):
You’ll note the city manager is using the taxable values of other communities to determine what a competitive salary rate should be for Clarkston employees. I provided an extensive discussion about tax issues, including what “taxable value” means, in a recent post that you can find here: https://www.clarkstonsecrets.com/lets-talk-about-taxes/. Taxable value is the value of the property the city can uses to impose property taxes.
The problem with the city manager’s taxable value comparison is that it doesn’t account for population. Based on the city manager’s own chart, Clarkston’s population is 882 people. At the March 23, 2022, finance committee meeting, the city manager said that the city issues 540 water bills, which would roughly approximate how many homes and buildings are paying taxes to support our local government (that would include businesses but not individual apartments). This means that the city employees are providing services for 882 businesses and constituents who live in or own approximately 540 homes or businesses.
The city manager’s taxable value chart compares Clarkston, with a population of 882, with fifteen other communities that have populations ranging from 1,206 to 7,482. The average population of those fifteen communities is 2,434, which is around three times Clarkston’s population. Larger populations usually mean more employees, more departments, more amenities to manage, and more overall responsibility for the city manager, so it should not be surprising that communities with larger populations might pay their city managers more than Clarkston pays our city manager. And there are lots of cities in Michigan with populations less than 1,000 people, but even some of those city managers have a lot more responsibility than our city manager because some of those city managers are also responsible for managing police departments, fire departments, campgrounds, and harbors. (You can find a list of those cities and towns here: Michigan Very Small Towns and Villages (fewer than 1000 residents) – Real Estate, Housing, Schools, Residents, Crime, Pollution, Demographics and More (city-data.com).)
I asked for a copy of the data the city manager used for the salary presentation by making a FOIA request, and the city promptly provided the information. I noticed that tons of similarly sized cities, townships, and villages were omitted from the survey. It may not have been deliberate on the MML’s part. When I worked in the private sector, I participated in voluntary salary surveys because I wanted the data, which was always provided free of charge to participants. I presume that the MML does the same thing. And, while I was limited to reviewing data from voluntary participants when making salary recommendations for my company’s employees, salary information for public bodies is, well, public. I would note that some of the public bodies that the city manager used are not cities; they’re listed on the survey as general law townships (Brooklyn, Howard City, Decatur, Kalkaska, Saint Charles, and Constantine).
I sifted through the city-data website that I linked above because I wanted to know how many similarly sized cities there are in Michigan with a population between 800 and 999 people to compare to Clarkston’s population of 882). I found eight other cities in the state with similar populations – Saugatuck (963), Caspian (871), Grant (881), Au Gres (863), Onaway (852), Lake City (850), Stephenson (848), and Gobles (811).
If that isn’t enough data (and you can never have enough, frankly), the city manager could also have included villages and townships. Using the information on the city-data website and excluding those areas having no web presence or independent municipal authority (which can mean that the data was collected on a subarea for census purposes even though the location isn’t a public body), I found many more similarly sized public bodies. Here they are in population order (with their general legal form listed in parentheses taken from their websites): 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).
The MML survey included Springport with a population of 800, but I did not include it in my list in the previous paragraph because I wanted to be consistent, and the city-data website listed its population as 792. Setting aside that difference, there were only five cities and villages with populations between 800 and 999 that were included in the MML salary survey: Mackinaw City, Pentwater, Clarkston, Grant, and Caspian. If the city manager wanted an accurate comparison, he could have picked up the phone and asked any of these other public bodies for salary information. It probably would have been provided voluntarily as a courtesy, but if not, the city manager could have sent a FOIA request asking for records that would provide the same information.
What’s my point? Obviously, the MML survey can’t be used to draw conclusions about Clarkston’s salary structure. While I can appreciate wanting to use some benchmark if you’re going to ask for more money, given that we are so small, the better way to get a feel for actual salaries unfortunately requires gathering some additional data on our own. And a comparison of title alone isn’t always helpful for some positions, such as a city manager, because some of the smaller city managers have much more responsibility and staff than our city manager does. If I were doing the survey, I would have gathered information from other public bodies for positions that are unique to government (such as city manager, treasurer, and clerk), but I would also have looked to the local market for DPW and administrative assistant salaries since they aren’t unique to government.
Yet, based on the inaccurate comparison to taxable value data and the limited number of sources for that data, the city manager suggested that in a fair world, he should be paid $70,729 but tells us that his target is only 80% of that amount. (Why 80%? Who knows? Maybe he thinks it makes him seem like he’s giving us a break or something.) Looking at this another way, if we had 100 residents each living in 100 homes with a total taxable value of $100,000,000, the city manager would want all Clarkston employees to be paid based on the value of the homes, while completely ignoring the fact that only 100 residents require service from their city government. It doesn’t make a lot of sense, does it?
The city manager told us that he evaluated all Clarkston job positions in the same manner, and he provided a chart on page 27 of the May 9, 2022, city council packet showing those numbers:
The first column lists Clarkston job titles, the second uses the taxable base salary comparison, the third column shows the supposed current salary, (I’ll explain why that’s not entirely true later), and the fourth column is an attempt to show just how underpaid everyone is by percentage. No surprise that when you use faulty comparisons, it makes the salary increase request in the last two columns look like peanuts – which is exactly the point.
The city manager claims that some employees are working lots of hours, and then divides that number into the annual salary rate to deflate the salaries:
The city manager and clerk are supposed to be part-time salaried employees. If that is not actually true in practice, do you know who is to blame? The city manager (and to a lesser extent, the city council). As I mentioned above, the city manager, treasurer, and clerk are salaried employees, which means they are paid a fixed salary no matter how many (or how few) hours they work. They don’t punch a time clock, and, generally speaking, salaried employees don’t track time (unless they are in the kind of job that generates a client bill, like an engineer or an attorney).
If the city manager is working 44 hours per week as he claims, and if the clerk is working 35 hours per week, then the city manager needs to reduce the workload (or convince the city council to hire another person, which is probably not going to happen). This means the staff will have to say “no” to citizen and city council requests that aren’t legally required, provide realistic deadlines to the city council, etc. That is what a manager is supposed to do; I was a manager, and that is part of the job, even though pushing back on your own management to protect your staff can be a stressful and difficult thing to do. Since the current city manager wasn’t even initially interested in the job he was hired for – he wanted to be the treasurer – no one should be surprised that he doesn’t know how to manage. However, that doesn’t mean that his lack of managerial skill (and city council’s lack of interest in reducing workload) should be used as an argument to raise salaries.
In the chart below, provided on page 28 of the May 9, 2022, city council packet, the two columns titled “weekly work hours” purportedly show the weekly hours worked. Apparently, the city manager won’t be managing his time or the clerk’s time during the upcoming year either, as these projected weekly hours are unchanged.
I don’t think that a (mostly) 3% percent increase for salaries (except for the DPW supervisor, for whom the recommendation is 4.8%) is all that unreasonable (even though, as I’ll discuss later, the city manager is really asking for 2% more for each employee than he’s listed on the chart through a retirement savings plan that is a trojan horse for even higher compensation in the future). But, as for this chart, my only objection is that the city manager used an entirely unnecessary B.S. metric – taxable value – to justify the salary increases. Worse, the city council never questioned it.
For some reason, the city manager is lying about the administrative assistant’s salary:
Here is a copy of page 23 of the June 28, 2021, city council packet. This represented the third time that the city manager presented this information to the city council (the first and second were May 10, 2021, and May 24, 2021, respectively). Please note Ms. Bihl’s hourly salary as a “treasurer assistant.” The city manager tells us that she was making $11.54/hour at the time of this presentation on June 28, 2021, and he was proposing to increase her wages to $14.42/hour beginning with the new fiscal year on July 1, 2021, due to a workload shift from the treasurer.
Once again, here is the chart presented by the city manager on May 9, 2022:
Please note Ms. Bihl’s hourly salary again. The city manager now refers to her as an “administrative assistant” and tells us that she makes $14.42/hour. He’s proposing to increase her salary to $14.86 an hour, effective with the new fiscal year beginning on July 1, 2022. The problem with that is that Ms. Bihl makes a whole lot more than even the new rate of $14.86/hour.
I know this because I sent a FOIA request to verify the city’s pay rates after receiving an inflated invoice for a FOIA request charging an hourly rate of $17.00/hour last year. The FOIA statute limits the charge to the rate of the least paid employee who is capable of performing the work, which I assumed would be Ms. Bihl’s rate of $14.42/hour based on what the city manager told the city council and the public during the 2021/2022 budget presentations. So, I made an additional request for salary information after the July 1, 2021, salary increases, and all of the rates presented to the council and the public were accurate – except for Ms. Bihl’s rate. Ms. Bihl actually makes $17.00/hour, and she’s made $17.00/hour since January 2021. Here is a copy of the earliest paycheck I was provided by Clarkston:
Why is the city manager falsely representing Ms. Bihl’s rate? I have no idea. Maybe someone on city council could ask him. Based on the city manager’s chart and using his hourly rate numbers, she makes almost as much as the city manager and more than the clerk and the DPW laborer. This is not good salary administration, to put it mildly. It’s also not clear what her 2022/2023 salary rate would be – will it 3% more than $17.00/hour, or $17.51?
More city manager exaggerations from the May 9, 2022, city council meeting:
I’ve already mentioned the tax base comparisons that are being used to inflate annual salaries, and listing the ostensible hours worked for employees paid on a salary basis (city manager, clerk, and treasurer) to deflate hourly rates. But there were more B.S. justifications used by the city manager, even though his presentation wasn’t all that long.
“Even some of the fast food and typically lower-paid industries are paying up to $20 an hour . . . ” Really? Which fast food restaurant is paying $20/hour? Granted, the rates for fast food employees have gone up, but if someone is making $20/hour, they are in management. I would also note that the signs on fast food restaurants almost always say “up to” whatever the hourly rate is. No one is starting at the top rate, and I haven’t seen any sign with a posted rate of $20/hour.
I could throw out useless comparisons myself. How about “many skilled tradespeople make more money than accountants with four-year degrees”? So? The skill level is different, as are the interests of the people in the jobs.
“Our little house of cards falls down if we don’t have good staff,” so we have to give pay increases to retain our employees. I honestly think that overall, our city employees do a good job. And, as a former H.R. manager, I agree that retaining good employees is important. However, our “little house of cards” most certainly would not collapse if someone left, and we couldn’t find a replacement due to salary issues. We already contract a large percentage of city functions to Independence Township and Oakland County. Any – or all – city jobs could be contracted out if we couldn’t find a replacement. And, since our overall base salary costs will increase to $186,516 per year based on the city manager’s charts (and not counting the proposed new retirement savings program or the misrepresentation of Ms. Bihl’s rate), I would be interested in knowing how much the contract rates for the work being done in-house would be. When I worked in both the public and private sectors, my employers regularly costed out whether or not it would be cheaper to have an outside contractor perform my job. Even though it was uncomfortable to experience, it was good management. (Do you know what’s not a good management practice? Telling your employees that if they decide to leave, you might be able to leverage their departure to get them more money – yet that’s the promise our city manager said he’s made to all city employees.)
“Raises of 8-10% right now are not unusual.” Really? I’m calling B.S. on that little factoid. The city manager claimed that this was happening more in the private sector than in government. No kidding. It always does. To the extent that my government employers were giving pay increases, they were always a lot lower than the private sector. Here are some links to articles about projected salary increases in the current market. While they are higher than previous years, none of them are the 8-10% salary increases that the city manager says are “not unusual.”
From the Society for Human Resources Management on January 28, 2022 (discussing non-government): Wages and Salaries Up 5％ for Private Industry Workers in 2021, Less Than Inflation (shrm.org)
From Mercer in November 2021 (projecting increases of 3.5% or more, discussing non-government): us-2022-compensation-is-going-up-but-is-it-enough-infographic.pdf (mercer.us)
From the Bureau of Labor Statistics dated April 29, 2022, and as of March 2022 (showing 12 month wage and salary increases for private industry workers increasing 5%, but only 3.2% for state and local government workers for that same period) – Employment Cost Index – March 2022 (bls.gov)
Based on the Bureau of Labor Statistics, the city manager’s proposed overall average increase in salaries – 3.4% – is slightly higher than the average but isn’t really too far off the mark. It also isn’t significantly below the average increases that other government employees are receiving, despite the city manager’s suggestion that this was some sort of a bargain basement request.
I would note that during his presentation, the city manager gave a heartfelt soliloquy about how he would be willing to forego any increase if it meant that the city council would grant the requested increases to the other city employees because, gosh darn it, they’re all great and he doesn’t want to lose them. I don’t believe it for a second, since the city manager has significantly improved his compensation position over the last five years, though I’m sure it played well with the employees and the city council (and we all know that there is no possible scenario where the city council would approve a raise for everyone but the city manager). But even if the city manager meant what he said, I disagree – I think that he should receive a pay increase along with everyone else because he’s done a decent job. My quarrel is with the lack of candor in the way he presented the salary increases, as well as not including his new request for a retirement savings program (discussed below) in the proposed increases for this year.
The request for a retirement savings program:
Right now, our city employees can participate in a pre-tax savings program at their own expense. Government programs have different IRS tax code identifiers, but they accomplish the same thing. So, the 457(b) plan that the city employees can participate in is similar to the private sector 401(k) plan that most people are familiar with. These types of plans allow an employee to save pre-tax dollars toward retirement.
The city manager chooses his words very carefully, so you really have to pay attention to what he’s saying. He told us that “there aren’t any contributors amongst our staff” to the 457(b) plan. He’s not “staff,” and we don’t know if he’s using the 457(b). Since the city manager told everyone at the May 9, 2022, city council meeting that he’d been “fully preparing” for retirement, I’m sure he is. Good for him. I think that’s a wise decision. Everyone should do that.
But the 457(b) – that exists at no cost to the taxpayers – is apparently not enough. The city manager wants to establish an additional 401(a) plan, which would match employee contributions up to 2%. We were told that this is just a “nominal” amount since other municipalities supposedly match contributions up to 5-10%. But, as the city manager told us, we have to “crawl before we run” and it would only cost taxpayers around $3,700 – for this year.
The “crawl before we run” reference tells you that the city manager intends to use the retirement savings plan match as a stealth way to increase compensation even higher for all employees. If such a plan were implemented this year, then all the employees could improve their salary increases by another 2%, which would put their effective salary increases between 5% and 6.8% based on the city manager’s proposed wage increases presented on May 9, 2022. Not bad, eh? That is at or above the private sector increases, based on the weblinks I provided above. Yet, the city manager will be presenting this as just a little line item in the budget next week on May 23rd.
Does the economy suck right now? Indeed, it does. Inflation is awful, and it’s touching every aspect of our lives. But when it comes to working for the government, you have to remember who is paying you. There are 882 people in Clarkston who live in fewer than 540 homes. All of them are suffering from the same 7-8% inflation, it’s highly unlikely that any of them are getting 8-10% pay increases, and I’ll bet that none of them have anything close to the generous paid time off policies that Clarkston employees enjoy. And guess what? All the Clarkston retirees on fixed incomes are experiencing the same thing and they can’t go to anyone and ask for more money. It would be nice if the city manager were thankful for what he had and honest about what he’s asking for.