City of Tacoma gets around pay freeze with extra benefits

Staff writerJanuary 25, 2014 

STAFF GRAPHIC

The city of Tacoma’s nonunion workforce received its last pay raise in 2009. But that doesn’t mean these workers haven’t seen any additional pay or benefits in five years.

As pay has stalled for the city’s 837 nonrepresented employees in the past five years, managers have handed out tens of thousands of dollars in extra pay and retirement savings, as well as dozens of vacation days.

In all, 91 employees have benefitted from such extras since 2009.

A proposal before the Tacoma City Council on Tuesday would give those same employees a long-delayed general pay increase, granting nonunion workers raises of up to 3 percent as well as one-time, lump-sum payments equal to 1 percent of their salaries.

City officials say the raises are needed to reward and retain nonunion workers who have seen their purchasing power decline while they watched their unionized colleagues bargain pay increases that have averaged 13 percent since 2009.

Nonrepresented workers, though, are eligible for perks that union employees aren’t. The city calls them “additional compensation and benefits,” and those expenditures are detailed in year-end reports from the Tacoma Public Utilities director and the city manager to the council.

City and utility officials say they use extra pay and vacation days to lure new talent to the workforce and to prevent qualified staff from leaving for other jobs.

Councilwoman Victoria Woodards said using these types of incentives can help the city keep expertise in-house.

“Let’s say there is a really great employee that’s thinking about leaving and there’s a way to offer them some kind of incentive to stay, especially when you have invested in that employee,” Woodards said. “There should be some things by which management could make those kinds of decisions.”

Recruitment seems to account for much of the expense. The city and utility have spent about $208,000 in moving expenses for new employees since 2009. In addition, the city and TPU have paid a combined $79,500 for temporary housing for new employees in that same time period.

The city and its utility have also paid people bonuses, sometimes upon hire and also to prevent them from leaving for another job. Since 2009, employees have received about $144,000 in cash bonuses.

Perks also come in the form of tax-free deposits to “deferred compensation” accounts that employees can draw on after they leave city employment. The city and TPU have paid a combined $89,000 in deferred compensation since 2009.

Last year, Tacoma Public Utilities Director Bill Gaines received a $50,000 contribution to a retirement investment for what the report calls “pension make-whole.” He is receiving the money because his $310,000 pay exceeds the maximum salary used to calculate benefits in the city’s pension plan.

Gaines also has been generous to staff. Last year, he awarded 1,066 hours of extra vacation time — more than Tacoma’s two city managers offered to nonutility employees in the last five years combined.

Gaines said some of the extra leave he’s given employees was to compensate for workers not receiving a general wage increase. He said the additional time off, which the city calls “administrative leave,” is an important tool to keep good employees.

“If you look at what’s going on in the utility industry, even during the recession our peer utilities were increasing pay when we were not,” Gaines said. “When it comes to retention, they have pay scales to offer that we don’t have. That’s how we have used this supplemental compensation, is to address those situations.”

City code does not limit the amount of vacation a top manager can award to his or her employees. The city and utility have handed out 3,770 hours of extra vacation time since 2009.

City Councilman Joe Lonergan said he thinks the amounts detailed in the report filed by TPU “seemed out of place in some instances.”

“I might be small-minded in this regard, but it seems like the amount of money being paid is enough,” Lonergan wrote in an email. “I could be wrong, but it seems unlikely to me that all those listed as receiving additional benefits from the city sought and had other job offers.”

Tacoma Human Resources Director Joy St. Germain said the city sometimes awards vacation to new hires as a recruitment tool. If used, awarding five to 10 days of vacation is "reasonable," she said. However, awarding extra vacation as a substitute for a raise is “not the intent.”

“It is meant to be for retention, recruitment or recognition purposes as well,” she said. “And the managers need to take responsibility and be accountable for their funds.”

Councilman Ryan Mello would like to see more proof that an employee given a retention perk was seeking a job elsewhere. But, he said, additional pay or benefits can be appropriate, such as when a department director or chief is making less money than his or her employees.

For instance, the city has bolstered retirement savings accounts for both the city’s police chief and the fire chief in the past two years because their employees were making close to or more than they were. Police Chief Don Ramsdell has received about $18,000 into his retirement account, and Fire Chief Jim Duggan has received about $16,000 into his.

In 2013, both chiefs received pay raises to place them above those they manage.

Tacoma’s municipal code says the city manager and utility director can award up to $15,000 per person each year in additional compensation. Neither can give out more than $100,000 a year total. According to the city code, only additional pay is considered in that calculation — not deposits into the city pension plan, nor vacation days awarded.

Mello said vacation has a cost and should be counted toward the maximum, and the City Council should revise the city’s code to better define what should be considered as a benefit under the city’s award limits.

“I think it’s pretty loose. We should look at the municipal code a bit,” Mello said “I feel like it’s too liberal of a definition that sometimes management uses on how they can use funds for ‘retention.’ ”

Kate Martin: 253-597-8542
kate.martin@thenewstribune.com
@KateReports

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