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Inside Look: Tuolumne Co. Employee Compensation

How Local Government Works … and Why it Sometimes Doesn’t

This is the fourth in a series of discussions about Local Government. The last dealt with the need in Government to set priorities and how the County accomplishes this annually. This discussion will focus on one of, if not the, primary drivers in fiscal decision-making in Government – personnel and specifically employee compensation. Across the County Government our Employee Compensation makes up, depending on the year, almost half, and in some sectors more than half, of our County’s budget. Government is essentially a service provider and our employees are the providers of those services.

Germane to any discussion of employee compensation in our County is how our employees helped this County get through the economic downturn that began in 2008 and continued in varying degrees through 2013 and into 2014. The Board of Supervisors and the County Leadership asked for employee (including the most senior leadership and elected officials) concessions in the form of reductions in wages and compensation to make ends meet. The alternative would have been more layoffs resulting in further reduction in public services. These concessions were to be temporary to get us through the worst times. Our employees stepped up and we got through the recession in better than similar counties.

Tuolumne County has long been a training ground for others to obtain experienced employees, most impactfully in public safety and other specialized disciplines. The up-front cost in both money and time can be significant (cost to send a Sheriff’s Deputy candidate to the required POST training and complete up to a year of local training once graduated to get the new Deputy to a level where he can perform with normal supervision; e.g.). To make that investment and watch the recruit depart for greener pastures two years later necessitating starting all over again is demoralizing to the unit and a significant drain on financial resources. It also directly impacts the quality of services available to the public. The reduction in compensation agreed upon by our employees only exacerbated that situation. Remembering the agreement that we reached was temporary to weather that immediate fiscal storm and to address the employee out-migrations, the Board of Supervisors undertook a study comparing our wages and compensations with those counties with whom we compete most. Employee compensation is affected by market forces. While on an individual level there are many motivations for people choosing where to work, in general talent and skills tend to migrate to where they are best rewarded. There are two categories of counties that we compete most with for our labor force: Rural, foothill counties of similar economics that offer similar qualities of life and adjacent or neighboring counties that have both better economics and to which there is a reasonable daily commute, allowing an employee the opportunity to live here and work there. (A list of the counties is at the end of this blog.)

We used 103 “classifications” (general job classes) for comparison. The results were dramatic: 5 were paid above market, 97 were paid below market (10-40% below the median).

The Board determined that an attempt to fix the problem at one time was fiscally infeasible and chose a goal of getting everyone within 10% of market over a four-year period and a strategy to bargain two- or three-year contracts that would achieve adjustments over those two to three years that would get those most out of market closer to market each year until an achievable end was reached. The ultimate objective would be addressed in follow-on employee bargaining. In addition, the Board recognized the need to keep up with the natural market forces of inflation and associated wage-compensation increases to avoid forever chasing our own tail. To achieve that, an annual COLA for all our employees was also included. These compensation readjustments have consumed most of our recurring revenue increases over the intervening years and will likely continue to do so for the at least the coming two to three years.

This segment has addressed our most important resource, our County employees. They are the ones that provide the essential services we all enjoy. They are the faces and personalities that we all see and depend on to help us work our way through the often-cumbersome regulatory mazes that are the reality of Government (much of which beyond the direct control of your local Government). To provide quality service, often in areas requiring specialized training or education, we need quality qualified people. To have those people we need to retain them by ensuring they are compensated equitably. Most of the difficult budget decisions revolve around or are directly impacted this subject.

The fifth segment will discuss the concept of Economic Development, its importance to economic vitality in any jurisdiction and its various facets. Segment six will address how housing issues impact and play a crucial role in a healthy jurisdiction.

List of Counties in Wage-Compensation Study: Alpine, Amador, Calaveras, El Dorado, Mariposa, Merced, Nevada, Placer, San Joaquin, Stanislaus (Mono was also asked but was not responsive).