Modesto considers pay increases for labor group, managers

The City Council will consider approving a deal Tuesday with one of its labor groups that includes pay increases totaling 6 percent over two years as well as more pay for some of its top managers and other employees that eventually will cost the city about $1.8 million annually.

The proposed deal between the city and the Modesto Confidential & Management Association and the proposed increases for top managers and employees come as Modesto grapples with its long-term financial health.

The council last week accepted the report of Mayor Ted Brandvold’s 100-day budget review committee, which was tasked with finding money to hire police officers and issuing recommendations to improve the city’s finances over the long term. The report provided a sobering take on the city’s general fund, which makes up about a third of the $361 million operating budget and primarily pays for public safety.

“Unless Modesto sheds a ‘business as usual’ approach and acts soon on multiple fronts, it is possible the city general fund will struggle to supply even the most vital services to its citizens within five to 10 years,” according to the report.

Deputy City Manager Joe Lopez said at full implementation the proposed three-year labor agreement with MCMA and the increases for top managers and employees not represented by labor groups will cost Modesto about $1.8 million annually, with about $850,000 of that from the general fund.

And there could be more labor agreements coming to the council for approval. The city is in negotiations with three more of its labor groups: the Modesto Police Officers Association, the Modesto City Employees Association and the Modesto Police & Fire Non-Sworn Association. The council has taken part in these and the MCMA negotiations by meeting in closed session with city negotiators.

Brandvold said Modesto can work on its long-term financial health and fairly compensate its employees. “We do have some serious financial issues to tackle,” he said. “We know that. But we also have to retain our employees.”

Lopez wrote in a report to the council that the city’s civilian employees have seen significant reductions in their pay since 2008 in part because they are paying more toward their pensions and for their health insurance. Lopez also wrote that what the city pays many of its employees has fallen behind what similar governments pay, causing many experienced Modesto employees to leave for jobs with better-paying government agencies.

The report does not provide data detailing how Modesto’s pay is not competitive for some of its employees and how the city’s turnover rate has risen.

Besides the proposed contract with MCMA, which represents about 220 employees, the council also will be asked to approve pay and benefit increases for 24 top managers and employees. The managers include City Manager Jim Holgersson; City Clerk Stephanie Lopez; department directors Lopez and Brent Sinclair, the city’s other deputy city manager; and fire Chief Sean Slamon and other top fire managers.

The proposed agreement with the MCMA and the increases for the top managers and employees not represented by a labor goup includes:

▪ 2 percent pay increases upon approval by the council and again in June 2017 and June 2018, for a total of 6 percent.

▪ Employees whose pay is 10 percent below the median based on surveys of similar local governments will receive salary adjustments to bring their pay to within 10 percent of the median. Most of the increases will occur in two steps, the first upon council approval and the second in March. The adjustments range from 2.5 percent to 15 percent, with most of them at 2.5 percent. Employees getting 2.5 percent will receive that upon council approval. Lopez’s report lists nearly five dozen job classifications – including employee benefits coordinator, risk manager, senior planner and water systems manager – whose pay would be increased.

▪ Modesto will increase what it contributes toward employees’ health insurance premiums by 4 percent annually over three years. For instance, an employee covering only herself would see the city’s biweekly contribution rise from $310.50 in January 2017 to $350 in January 2019.

▪ Top fire managers would not receive the 6 percent pay increases. Instead, they would see their pay increase 1.5 percent when the council approves the labor deal and then 2 percent in December and 2 percent in June. But those not paying the full employee share of their pensions would pay 2.5 percent more toward their pensions in December and 3 percent more in June, bringing them to the full employee contribution for firefighters.

This story was originally published July 10, 2016 at 4:42 PM with the headline "Modesto considers pay increases for labor group, managers."