Total Employee Compensation Costs

Writing about compensation is a dangerous business, particularly when the writer is one of the higher paid people in the organization. My decision to write about the subject was inspired by a report I received this week from Portland State University (PSU) that confirms what I have known and talked about for many years. Oregon’s constitutional limits on a city’s or county’s ability to raise revenue with no corresponding limit on costs dictate that there will be fewer Oregon public employees in the future.

We have already seen this problem in Albany, where our workforce was cut by more than ten percent between 2009 and 2012 when property tax revenues could not keep pace with costs. The primary driver of increasing city costs is employee compensation, much of which we do not necessarily see reflected in our paychecks. Retirement contributions and health insurance, according to PSU, are among the biggest factors contributing to the problem. Retirement payments to the Public Employee Retirement System (PERS) could soon amount to 40 percent of salary costs, meaning that for every $10 cities pay out in salary, they will pay an additional $4 for retirement. Given that I will be completely retired in a few months, I am grateful for PERS, which will provide a pension of about 50 percent of my annual salary. Coupled with my wife’s small pension; my personal retirement savings; and, eventually, Social Security, I should have a reasonably comfortable income. The problem is that many people in the system, including my wife, were able to retire with incomes in excess of 100 percent of what they earned when they were working. No system can sustainably support that level of benefits. Changes to PERS in 2003 cut benefits, and I’m sure we will see additional attempts at reform in the current legislative session. I do not believe anything that will pass legal muster will really solve the problem.

We are likely to see heavier workloads for employees as our population increases at a faster rate than our financial ability to hire new workers. Albany is growing and property tax revenues are increasing, but not at a rate that will support many new employees. The few positions we added last year and are proposing for the year ahead will still leave us well below our 2009 levels.

The good news in an otherwise difficult forecast is that the City has maintained a reasonably healthy financial condition despite some serious challenges. We did it by making hard decisions to not fill vacancies and shuffling responsibilities while also reducing the size of our financial reserves or savings. As we all know from our personal budgets, you can’t rely on a savings account as income for the long-term. We have been able to stabilize reserves in the General Fund over the past three years, but they remain lower than they need to be.

Anyone interested in reading a summary of the PSU report can find it at the following link: http://www.oregonlive.com/politics/index.ssf/2017/02/employee_compensation_costs_cr.html#incart_river_home. I can also send an electronic copy of the complete study upon request. I think it’s important to acknowledge challenges and consider strategies for getting past them, rather than ignoring them in hopes they will go away. Albany has been a resilient community, and I’m confident we will work through this issue with a commitment to fairness for residents and employees alike.

Wrestling with Life

People may be getting tired of reading about my grandchildren, but I never tire of writing about them. I believe all of them are superior children and worthy of every superlative I use to describe them. The babies are particularly cute and too young to have developed many annoying habits. The older children are practically perfect, but a number of them have followed in their parents’ footsteps by taking up the sport of wrestling.

I really don’t like wrestling. I was on the debate team in high school and college, and the sports I selected for my children when they were too young to care were soccer and baseball. They found wrestling on their own. Wrestling is, in many ways, the purest of sports because size doesn’t matter and it’s basically an individual contest. The bad part is watching your children break bones, get concussions, and have other less serious injuries on too many occasions. There is also the emotional pain of watching them lose in matches that are really important to them. All of my sons won district championships and went on to place at the state tournament, but they all lost at least one match that kept them from achieving their highest goal. It’s not easy to explain to a teenager that taking second at a state tournament does not represent failure.

Part of the problem is our cultural attitude toward winning and losing. Some people act as if all of life is one great wrestling match where only one person can emerge as the winner and everyone else is a loser. This attitude appears at wrestling tournaments in the form of T-shirts with the slogan “Second place is the first loser,” emblazoned on the back. Perhaps it’s this nonsense that has colored my view of wrestling.

Everyone, at some level, is a winner and a loser. If we are lucky enough to live in the United States, we won the lottery of access to wealth. The U.S. has more than a 21-percent share of the world’s gross domestic product; and our next closest competitor, China, has just over 10 percent. We have wrestled a good share of the world’s prosperity into our country and have kept it here for several generations. Our wealth, however, has not solved many of our most difficult problems.

I hope my grandchildren will learn, if they haven’t already, that their value, worth, importance, significance, or status as human beings is not dependent on whether they win or lose wrestling matches or any other type of contest. The real lesson to be learned is the importance of taking on challenges and learning from the experience of wrestling with them. Today’s losses will help lead to tomorrow’s wins, but victory may look nothing like what we imagined when we stepped onto the mat.

I now have five grandchildren (four boys and one girl) wrestling in various venues around the state; and I will soon have more time to go watch them, not to mention fewer excuses not to. Their matches always cause me more anxiety than they should, but I will go as a way to express my love. We are all wrestling with life, and it helps a lot to know we have people cheering for us.

Freedom of Speech

Our mayor received a message through the City’s email system a week or two ago complaining about City employees discussing politics, apparently during the workday. Earlier this week, I fielded a similar complaint about a Facebook post I made from my phone on my own time that I didn’t realize would be accessible to the social media world (silly me). The complaints are a reminder that political feelings are running high and that public employees are under particular scrutiny for any hint of partisanship in the way we administer local government business.

I have no idea what the political leanings of most City employees are like. I would guess we are a little more likely to have a positive view of government than the general public, but I also believe we generally hold views very similar to those of the people we serve. Some of us are very conservative; some of us are very liberal, and most of us are somewhere in between. Each of us has particular concerns unique to our own values and experiences. None of us gave away our rights to express our views when we accepted a job with local government. We can and should fully participate in the political process by voting and supporting candidates or issues as we choose.

We are prohibited from using public resources to promote our private political beliefs, and that generally includes advocating for or against candidates and ballot measures on public time. Anyone interested in finding out how the State of Oregon defines this issue should go to the Secretary of State’s website and check out the rules (http://sos.oregon.gov/elections/Pages/manuals-tutorials.aspx). Everyone should also understand, however, that expressing an opinion about a political figure is a protected right. Among the many benefits of living in this country is the assurance that we can question and criticize those in leadership positions without fear of government retribution.

Answering the question of what we can do is easier than addressing what we should do. As a City Manager, I am prohibited by my professional code of ethics from publicly supporting candidates at any level of government. I can and sometimes do criticize decisions and leaders in private conversation; although I try not to identify with partisan politics in any public setting. I have worked for mayors and council members from both ends of the political spectrum and learned that their political views have little to do with their character or effectiveness.

The principle I will try to follow during the short time I have remaining as a public employee is to be respectful of others’ opinions, limit my own comments while on the job, and reserve the right to exercise my conscience through speech and action when cherished values are threatened.