Study: EBR city-parish wages low, benefits generous

A draft of a highly anticipated report evaluating compensation levels for city-parish employees finds that Baton Rouge public employees are generally underpaid, thus hampering the city-parish’s ability to attract and retain a future workforce.

But the report also concludes that the city-parish offers a generous benefits plan that is more competitive than benefits offered by many peer cities.

The study, conducted by a team of private consultants including Buck Consultants and SSA Consultants, was commissioned nearly two years ago at a cost of $160,000.

Council members, employees and local union officials repeatedly questioned the Mayor-President’s Office for months about the status of the study, initially promised to be completed a year ago.

The draft, obtained by The Advocate in a public records request, has yet to be presented officially to the Metro Council. But the Mayor’s Office is already telling employees not to get their hopes up.

“There certainly won’t be raises in 2014,” said William Daniel, chief administrative officer for Mayor-President Kip Holden.

The study compares city-parish positions and pay ranges against salaries for similar positions from comparable employers.

“For two-thirds of the positions studied, the city-parish employees’ pay range ends before it even gets to the midpoint of the salary range for other comparable employers,” the report states.

The report also notes that benefits for active employees and retirees are competitive and, in some cases, slightly more competitive than benchmark data.

New employees earn a significantly lower base pay, the study says, but by the employees’ 20th year with the city-parish, they start to catch up to benchmarks.

Consultants and city-parish officials agree that the new generation of workers is less concerned about retirement benefits than about salaries.

“Research predicts that employees are no longer going to work for an organization with the intent of staying for even 10 years, much less 25 years or more,” the report states. “Any adjustment to the city-parish compensation structure must consider this change in employee values as the city-parish works to attract and retain a multigenerational workforce.”

The report’s recommendations include:

Eliminating longevity pay for future employees. After 10 years of service, employees earn a 5 percent increase and then another 1 percent pay increase every year for a maximum of 20 percent. For the 2013 budget, longevity pay is estimated to cost the city-parish $7.18 million.

Tightening overtime policies. In 2013, overtime cost the city-parish $5.54 million, excluding police and fire department employees, who were not considered in the study. In 2012, the city-parish spent $7.07 million in overtime.

Changing sick leave policy and offering a long-term disability plan. The city-parish does not offer a long-term disability plan, but makes up for it with a generous sick leave policy. Workers who reach 15 years of service are allowed one month of paid sick leave per year. The excessive sick leave creates workflow problems and sometimes requires additional staff.

Helene O’Brien, union president, also obtained the study from a public records request, and said she was concerned the data were being manipulated to tell the story the Mayor’s Office wants people to hear.

Contrary to the claims of the report, she said, longevity pay is fairly common and she would have concerns about an attempt to end the program.

Rather than reduce benefits to fund pay increases, as the study suggests, O’Brien said the city-parish can find some money within the budget.

She noted the 2012 city-parish financial audit shows that $23.1 million of appropriations for Baton Rouge departmental budgets was not spent.

“It’s a matter of priorities,” O’Brien said. “These city-parish employees have been working a long time, and have not had a significant change in pay since 2005.”

She also said that if the Mayor’s Office were more forthcoming with the information, then the union would be more optimistic about the city-parish’s intentions and willingness to negotiate.

“We don’t feel like we’re having an honest conversation,” she said. “It looks like they’re trying to shape the data to prove a point.”

Daniel said the report has been delayed because it started as a salary study, but benefits were added later, complicating the research.

While there’s no money for raises this year, Daniel said, the Mayor’s Office will plan for raises by first targeting positions they’ve had difficulty filling.

He said eventually the city-parish will need to determine if benefits need to be restructured to provide better wages.

“Employees can no longer wait 20 years to get 50 percent of their total compensation,” Daniel said. “No one thinks that’s a good model.”

For its part, the city-parish has yet to freeze its longevity pay increases and 3 percent annual salary increases for employees until they reach the step ceiling.

But many employees have already reached the ceiling, so they don’t receive the annual increases, or their base pay is so low that the increases are negligible.

For example, David Lewis, a public works employee of 25 years, is maxed out on both his 3 percent increases and longevity pay. He earns $16.26 per hour as a maintenance worker.

“It’s hard to get by, because everything is going up except salaries,” he said. “The cost of food, gas, insurance and everything goes up, but we haven’t had a raise in years.”

Several council members have expressed frustration at the administration for moving slowly with the study and for an unwillingness to offer raises this year.

“If you’re going to pay hundreds of thousands of dollars for a pay study, we need some plans,” Metro Councilwoman Donna Collins-Lewis said. “We already knew our workers were underpaid, we know we have budget crunches every year, so what are we going to do?”

Collins-Lewis said the council understands there won’t be across-the-board increases, but she wants the Mayor’s Office to develop concrete recommendations and plans that will show phases of increases that start by targeting the lowest-paid employees.

Councilwoman Ronnie Edwards also said the city-parish should create a plan to bring salaries closer to the market averages. But she said she has concerns about curbing the attractive benefits plan in order to do so.

“I think that could be a grave error. People have no idea how quickly they can hit that retirement mark,” she said.

“When they’re younger, they think that they can make that sacrifice; but when they’re older, it could be a huge regret.”

Editor’s note: The story was corrected on Sept. 23 to correct the pay earned by a worker. The correction occurred in the 8th paragraph from the bottom of the story.