One possible way to constrain taxes....
Well now, I certainly cannot let Doug have all the fun, can I?
Preface: as a member of the Budget Committee, I have only one advocacy group - the taxpayers of Gilford. Anything I do or say will always have THEIR best interests in mind and heart. Yes, Gilford needs to spend money and fund city services. But the bottom line for me is this - does the budget present the best value (in terms of service AND cost) possible? If not, what can I do to make that happen?
Last night at the end of the Budget Committee, I submitted a letter containing a motion that I believe will assist in slowing down the growth of salaries, thus trying to slow the budget down?
Why the salaries? As it stands now, the salaries drive the majority of the Gilford's budget. As of tonight, the budget commitee is not talking about salaries until a November meeting. That will happen when the admin / personnel meeting happens at the Budget Committee. Remember, the public can attend and listen - but only comment when recognized by the Chair, Dick Hickok (decorum requested, please).
Anyways, here is the motion - and I will have further comments on it after the break:
To: Dick Hickock, Chairman, Gilford Budget Committee
From: Skip Murphy, member, Gilford Budget Committee
Date: 10/19/06
Observation:Subject: Observations, and a Motion
Upon being included in the Wage Comparison Subcommittee of the Budget Committee, I undertook the effort that resulted in the compilation of the Wage and Position Comparision study that ranged across the 32 towns that fit Gilford's year round demographics (populations of 5,000 – 9,999). Given that, and the surprising result that out of the 39 positions reviewed, 25 of our positions were in the top 5 in Maximal Wage range, I feel that Gilford needs to do more than just to continue discussions of this situation. Action must be taken to fix this structural problem with the Salary portion of Gilford's Budget.
Motion:
I make the motion that the Budget Committee constitute a new subcommittee whose sole purpose will be to create a formula that will slow (and then stabilize) the rate of growth of each position' salary range within the appropriate grouping of our demographic.
The make up of the subcommittee shall include:
- The Selectmen representative to the Budget Committee
- A member of the Wage Comparison Subcommittee that best understands the underlying data
- An at large member of the Budget Committee
The result of applying this deceleration formula will be to have each position arrive at a predetermined standing point within its demographic within a given amount of time. It should be obvious that this is not an across the board deceleration percentage; each position will be targeted with its own deceleration formula. If done correctly, it will also be sufficiently robust to help raise those positions that the Selectmen deem “too low” (i.e., turn it into a “negative” deceleration percentage).
While the he Board of Selectmen will be responsible for setting the policy of where each position ranking should be and the amount of time it should take to arrive there, it will be job of the subcommittee to derive the actual function.
Example:
The position of Police Sgt. ranked ranks first among Maximal Salary Range across all 32 towns. If the Selectmen decide that this position should rank no higher than 10th overall within a span of 5 years, its deceleration formula will produce, on a yearly basis, a percentage that would slow the rate of salary growth for that position such that its Maximal Salary value will rank 10th in 5 years.
Each year, the rise in the salary range would be (COLA + Merit, assuming for now that both are then included in that position's salary as opposed to a lump sum payment). To this computed value, its deceleration formula would be applied, yielding a “Deceleration Percentage”. Thus, the overall effect on the salary growth would be ((COLA+Merit) – Deceleration%).
A concrete example - Assume the following:
Salary $50,000
COLA 3%
Merit 1.3%
Deceleration 2% (from the yet to be derived formula)
(50,000 * 0.043) – (50,000 * 0.02)
(2,150) – (1,000)
Thus, instead of a rise in salary of $2,150, a lowered rate of $1,000 would be in force.
There should never be a cut in salary resulting from application of the deceleration formula, only a slowing in the rise of that position's salary, thus allowing for a “soft landing” into the slot predetermined by the Board of Selectmen.
Now, I have had a couple of folks call to ask some questions, including Michael Kitch of the Laconia Daily Sun (yes, there will be an article in tomorrow's paper). So let's do a micro-FAQ (Frequently Asked Questions):
Isn't what the Motion and the Study talk about, clash?
No, not really. The Study (click on Statistics on the right to see the tables) talks about salary ranges. The Motion speaks to actual salaries. One doesn't have to be a rocket scientist to see that an actual salary is going to be between the lowest end of a salary range and its highest.
What is the intent of the Motion?
Exactly what it says - to gently bring our salaries into line with respect to the income of Gilford's residents. A soft landing, as it were.
If only one, or even a few of the positions ranked high, this probably wouldn't be needed. But when the overwhelming number of the Town's positions are high (see here), there is an obvious problem if you are funding those salaries with your taxes.
But this will cut salaries!
No, there will be no cuts. The only thing that this does is to slow how fast salaries are rising.
But what about salaries at the low end of the range?
This is a motion to create the formula - I do not have that formula already done. Obviously if a salary is near the bottom of its range, that must be accounted for within the step program.
So this is one formula for everyone, right?
Same idea, but as many "deceleration" percentages as there are positions. Each position will be evaluated individually each year.
Isn't this dependant on what the other Towns do?
Yes it does. But remember, we are trying to give the Board of Selectmen a tool that will help them adjust salaries IF THEY SEE FIT. Over time, pretty much salaries tend to go up. There is one assumption here - salaries over time go up. Same with the salary ranges. The idea is that other towns salary ranges will continue to grow faster as Gilford's slows down, allowing a sufficient number of them to "pass" Gilford's ranges to satisfy the Selectmen's policy settings.
So the Selectment have to use this, right?
No, they do not. While the Budget Committee goes through the process of evaluating the budget and then presents it to the Town, it is strictly advisory. Same here with the Selectmen - they are certainly free to accept or reject this as they see fit.
So we will lose our best people? Won't they go somewhere else?
As in the private sector, the best are always looking to better themselves. Some may leave because of this, some may leave just because the opportunity is better regardless of this.
The question I ask is this - when does it become too much, even for someone who everyone agrees is the best? We are not a big city, or even a large town - just as in our household budgets, we have to make choices. When it comes time for a new car, I'd love to get a Cadillac, Mercedes, or some other luxury car - but can I afford it AND a really nice new set of computers for my family, and a really nice destination vacation?
No, and the taxpayers are telling me, Doug, and other members of the BudComm that something has to give. We can nickel and dime every single department budget and cause nothing but bad feelings, but the salaries is where we can make a real difference in the budget.
