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Cash-strapped Cape Coral finds room for six-figure salaries

By BRIAN LIBERATORE

Article Appeared on May 20, 2008

 

Out of the $939 the average Cape Coral homeowner doled out for city taxes last year, $676 went to pay city personnel.
Now, as the city faces an economic crunch that could leave $20 million less in its coffers next year, all eyes are on the city's biggest expense: its employees.
Councilman Eric Grill has proposed a 10 percent pay cut across the board. Other council members have called for job eliminations at the high-paying supervisory levels. And the unions, with Council's blessing, are offering buyout incentives hoping to reduce payroll without losing any positions.
"The issue of salaries is going to come up when money is tight," said councilman Eric Grill. "And money is extremely tight."
People are usually a city's largest expense, its greatest asset and certainly the most sensitive area to reductions. An analysis by The News-Press of compensation paid to employees in 2007 found: * Cape Coral paid out $81.5 million in salaries, overtime and other types of compensation to 2,067 full- and part-time employees.
* Police and fire professionals accounted for 113 of the top 150 highest-paid city employees when overtime and other compensation was factored.
* City manager Terry Stewart is the highest paid employee with an annual salary in 2007 of $169,000 followed by public works director Chuck Pavlos, who received $145,000.
* With overtime and additional pay, some employees almost doubled their base pay. A utilities programmer analyst in the water department, who studies and modifies the department's computer systems, had an annual salary of $64,000. He also made an additional $62,000 with more than 1,000 hours worth of overtime and bonuses.
* Police Sgt. Bruce Fronk, who has a base salary of $77,000, logged 657 hours of overtime and accumulated more than $21,000 worth of other compensation, including money for conducting in-house training, pay for taking on duties beyond his job description and education bonuses. All together, the sergeant made about $136,000 last year - almost $3,000 more than the police chief. Fronk's overtime is based on his specific training skills.
"There is a need at the agency for specific high-liability training (like hand-to-hand combat) of young officers," said Fronk, who also volunteers his time at the city's youth center. "I specialize and enjoy interacting and teaching. With young officers I offer knowledge that they can benefit from. I am good at what I do and that is documented in my evaluations."
* Fire Lt. John Hauff made $141,000, making him the fourth highest-paid employee in the city. That also puts his salary $8,000 above that of the fire chief. Hauff logged more than 780 hours of overtime. With added compensation for things such as training, Hauff almost doubled his $73,000 base salary. Hauff did not respond to a request for comment.
Overtime an issue Fire Chief Bill Van Helden said the 2007 overtime numbers sparked a few concerns.
"You always want to make sure your overtime is distributed equally and fairly," Van Helden said. "We just met this week with staff and asked them to look at overtime." In both the fire and police departments, those with the most overtime are the ones doing in-house training. Using department staff to train instead of looking outside the city saves money across the department, police Chief Rob Petrovich said. But it can inflate the salaries of certain individuals.
And while both chiefs said they try to keep the overtime dispersed more evenly, much of it depends on who offers to work the overtime shifts. In 2007, the city paid $1.4 million in police overtime - $501,000 more than it paid in 2006. The fire department last year spent $1 million for overtime, about $38,000 less than in 2006. The Public Works Department in 2007 spent $523,000 on overtime, up $101,000 from the year before.
The city budgeted about the same amount for overtime this year as in 2007. With five months left in the fiscal year, the police department has spent about 60 percent of its overtime budget, the fire department 47 percent and public works 63 percent.
"If you have an emergency, there's no way you can say, 'Your time is up, you can't put that fire out,'" said councilwoman Dolores Bertolini. "But I think we can cut down on overtime. It's been done before. I think every necessary facet of the budget is going to be looked at."
Officials add that overtime is still more cost effective than hiring additional personnel.
NEGOTIATIONS
Sweeping changes to the employee pay structure are only possible with cooperation from the seven unions. The city is bound to contracts, which cover 88 percent of the city's 1,493 full-time employees. Last month, Grill proposed cutting salaries 10 percent to avoid layoffs. An indiscriminate 10 percent would net about $8.4 million in savings. He has since adjusted that to 5 percent. The percentage and how the cut would be distributed, Grill said, is open to negotiation.
"I think they'd rather have a 5 percent cut than lose their job in two months," Grill said.
General employees' union president Wally Ilczyszn said there has been no talk of going back to the negotiating table. He also described any pay cuts as a last resort.
"There's so many other options," Ilczyszn said. "You've got the buyout going through, and we're going to have a reduction in payroll.”
Other council members agreed with Ilczyszn's assessment.
"These contracts are bargained in good faith," Councilman Tim Day said. "To say we're going to start cutting salaries - that's a dead last alternative."
Competitive salaries The city in 2007 commissioned a study from the Waters Group that compares Cape Coral to 19 other Florida cities from Gainesville to Miami. The study found most salaries are near the middle of the field. The report finds that salaries for positions such as department heads and police and fire administration are about 10 percent below the market median. Non-union positions in the fire and police departments, the study finds, lag the market by about 7 percent.
A survey by The News-Press comparing some of the city's higher-paid director positions to those in Tallahassee, which has a population about equal to Cape Coral and about 400 more employees, finds salaries for the Cape's city manager and city attorney are 19 and 21 percent below positions in the capital. The Cape's directors of public works and community development are making 10 percent more than their Tallahassee counterparts. Pembroke Pines, which is slightly smaller than the Cape and has about the same amount of employees, pays its public works director 74 percent more than the Cape and its finance director 77 percent more. Most other director positions are 15 to 20 percent higher.
The Waters Group study is now in the hands of the city's Financial Advisory Committee, where it faces tough criticism. Committee chair Michael Foye, a retired U.S. diplomat, questioned the study's methodology, saying it did not account for benefits and compared vastly different cities.
"To me the Waters report was inadequate and incomplete," Foye said. "I would have used an independent study where the city had no guidance or input."
THE BUYOUT GAMBLE
The general employees, police and fire unions in the past three weeks proposed three retirement incentives to help cut costs. The city plans to give three years to members of the general employees' union and four years to both the fire and police departments.
Employees can add those years to their age or time of service, the two factors used to calculate retirement eligibility and rates. Council members and union leaders say they hope the incentives will entice long-time veterans who command a higher salary to leave, allowing junior employees to step in and do the job at a lesser cost. Polls of eligible employees show about 290 general employees, 17 police officers and 30 firefighters would retire with the incentives.
Calculations from the city's finance office and the three unions, which account for the up-front costs of the buyout, have the city saving about $8.8 million in salaries over three years.
To see the savings, the city would have to adopt some staff restructuring proposals on the table. Any move to fill those vacated positions would have to go through the City Council. Earlier this year, Day pushed through legislation that requires council approval for new hires.
"There will be a lot of scrutiny," Day said. "I can tell you nothing is going to get filled until the council is happy with it."
But even with the added oversight, success is not guaranteed with the buyout program.
"You never know what happens with these things until they're all said and done," said Steve Riggs, vice chairman of the city's Financial Advisory Committee. "You could end up having a swap, or just a slight reduction in compensation."
The only sure way to reduce the city's personnel expenditures, Riggs noted, is the least desirable.
"The reduction in force, is the only program that's a certainty," Riggs said. "It's a tough situation because the city staff, the great majority of them, are super people. They do their jobs well. "It's an unfortunate economic situation that's affecting the public and private sectors right now and a lot of people are hurting because of it."