Town employees receive pay raises (7/9/09)

3 percent hike approved for non-union workers

July 9, 2009

By Greg Elias

Observer staff

Unemployment has hit the highest level in decades. Companies are struggling to survive. Many private-sector workers have seen their pay frozen or cut.

But Williston’s municipal employees will still get pay raises this year despite a severe recession that has squeezed the town budget and lightened taxpayers’ wallets.

The Selectboard, at its June 29 meeting, unanimously approved a 3 percent pay hike for non-union employees. They are also eligible to receive merit raises.

The board met behind closed doors for its annual discussion of employee pay. After emerging to vote on the raises, member Jeff Fehrs implied that the town might have to rein in raises next year.

“The fiscal year ’11 budget is burning, and we need to focus on that,” he said, according to a recording of the open part of the meeting. “My sense is that some of the key issues will be labor-related.”

In an interview, Selectboard member Chris Roy offered a lukewarm defense of his support for the pay hikes.

“I had sort of mixed feelings about the vote,” Roy said, later adding, “I’m just one of five board members and I have to be realistic.”

Roy said board members felt it was important to maintain equity with the town’s unionized firefighters and police officers. Each group has negotiated contracts that include 3 percent annual pay hikes.

Freezing pay for non-union employees “may also encourage them to join the union,” Roy said. “And we don’t want to necessarily encourage that.”

Residents expressed mixed opinions about the raises.

“Pay levels should be level-funded as far as I’m concerned,” said Frank DeVita, a resident who also owns TimberNest, a bunk-bed manufacturer in Williston. “It’s our money. They should be more responsible financially.”

DeVita said there is “no way” given the state of the economy that he can afford to give his own employees a pay hike. He said austerity measures taken by private business should be mirrored by government.

Resident Jeffrey Haslett said he wouldn’t begrudge modestly compensated town workers a raise. He said discontent over pay should be directed toward corporate titans and their outlandish bonuses.

“Personally, I think our town’s public officials do a good job and deserve good pay, and they are probably underpaid,” Haslett said.

The raises came within days of the U.S. Labor Department’s announcement that the unemployment rate had hit 9.5 percent, a 26-year high, and average weekly wages had dropped by $2, the lowest in nearly a year. Many economists say the downturn is the worst since the Great Depression.

Each year in the recent past the town of Williston has handed out 3 percent raises to all non-union employees. The only exception was last year, when that raise was downsized to 2.75 percent.

The town’s 42 non-unionized workers are also eligible for merit pay increases. In past years, those raises were generally 1 or 2 percent.

Town Manager Rick McGuire said there would be some merit increases awarded, but he expected them to be “far more limited this year than in prior years.” McGuire said he would determine the amount and number of merit raises by the end of this week.

Selectboard Chairman Terry Macaig said the board did not talk about limiting merit raises. He said taking discretionary pay out of McGuire’s hands would amount to micromanagement.

It is unclear how much the raises will cost. The town set aside $33,000 for merit raises as well as some pay adjustments for union employees, according to Susan Lamb, Williston’s finance director. She could not immediately determine how much the across-the-board pay increases would cost.

Roy said he was “sympathetic” to the viewpoint of those who feel the town should rein in raises to acknowledge the struggles of private-sector employees. But he and other town officials note they produced a level-funded budget and a reduced property tax rate this year that are in step with the grim economy.

Asked if the raises were insensitive given that few businesses are offering raises, Macaig sidestepped the question. He instead emphasized that the town may have to reduce or eliminate pay hikes next year.

The Selectboard faces a darkening fiscal situation when discussions begin this fall on next year’s budget. Revenue from the sales tax and other sources has been falling and the board has spent much of the town’s reserves over the past few years to hold down property taxes.

Town officials said they may be forced to either raise taxes or cut services if revenue continues to erode. In that scenario, they said, raises would be out of the question.

Roy said this year’s pay hikes for town employees were included in the budget, which was finalized before the downturn morphed into a major recession. Private firms can immediately adjust to such economic changes, he said, but it takes government a lot longer to make adjustments.

“Unlike businesses, municipalities don’t turn on a dime,” he said. “It’s more like an oil tanker sometimes.”