New Arkansas budget plan would make raises based on market, eliminate 'emotion'

Pulaski County officials fashioned a proposed 2018 budget that overhauls the county pay structure, eliminating "emotion" when it comes to pay increases, the comptroller argues, though it left some positions behind, the prosecuting attorney's office says.

The Quorum Court's eight-member budget committee met four times in October to consider budget requests from county departments.

On Thursday, a budget ordinance detailing $144.67 million in appropriated money for the 2018 calendar year sailed through a committee vote, 7-0, with one member absent.

It now moves to the full Quorum Court, to be voted on in late November.

Much of the county's money -- $73.4 million -- is allocated to the general fund, which supports about 52 departments such as County Judge Barry Hyde's office, the Election Commission and the coroner.

Dozens of smaller funds, like $2.18 million allocated to the Central Arkansas Library System or $5.2 million allocated to the sanitation fund, compose the rest of the budget.

By state law, 10 percent of each county fund must be kept on reserve.

For example, in the proposed ordinance, about $28.9 million is available for appropriation to the road and bridge fund. Ten percent -- $2.89 million -- was recommended for reserves, while $20.3 million was actually allotted.

And some funds, such as the public safety reserve, have no money appropriated at the outset. They're dipped into throughout the year to cover county projects.

What distinguishes this budget cycle from other years is a $68,800 competitive-salary study, commissioned by the budget committee in April. One like it hasn't been completed since 1998.

The Johanson Group, a Fayetteville firm, examined the county's roughly 1,085 full-time positions. They distilled that number into 314 job descriptions and ranked them on 15 factors like education, experience and demands of the job.

Those in the upper tier, more likely managers with enhanced responsibilities, are "unclassified" positions. Only 64 employees fit that bill. Most county employees hold "classified" positions.

Job descriptions were then compared with salaries and benefits at other agencies, both public and private.

From this comparison, the firm reported that the average unclassified county employee is paid 18 percent behind a market average salary, called a "midpoint." Classified positions are paid about 10.6 percent below, the firm found.

What the data show is Pulaski County should shift its pay structure by those percentage deficiencies to better reflect the market, Blair Johanson, the firm's president, told the Quorum Court in mid-October.

Right now, there's no way to bring every county employee to their midpoint, said Comptroller Mike Hutchens. It would cost millions, he said. Rather, the Johanson Group suggested gradual tweaks over time.

The firm's immediate recommendations were factored into the budget ordinance passed Thursday by the Quorum Court committee.

Among those changes are to increase salaries for 57 county employees whose pay doesn't approach their market minimum, calculated by the firm at 76 percent of their market midpoint.

For 960 county employees whose current pay is below their midpoint, the firm recommended a 2 percent raise.

For 67 county employees paid above their midpoint but less than the maximum salary -- 131 percent the midpoint value -- a 1 percent raise was proposed.

Three employees who are already paid above their maximum won't see a raise but will get a one-time payment worth 1 percent of their salary.

Those maneuvers will cost the county about $1.33 million, Hutchens said.

Comparing salaries to a competitive market to determine pay increases is new for Pulaski County. In the old system, Hutchens said he would approach the justices of the peace at the end of the year with what his office thought was affordable across the board.

Last year, it was a 4 percent raise. Sometimes it's less. One year it was no raises at all, an "unpopular" decision, Hutchens said.

"For a few months, I was not the person to be standing next to," he said.

By contrasting county salaries against a competitive market, the Johanson study takes the "emotion" out of pay raises, Hutchens said.

Still, department heads want employees to be well compensated. The Johanson-inspired pay increases aren't as substantial across the board as last year's 4 percent bump.

"I've heard some grumblings. 'That's not enough. That's not anything,'" Hutchens said. He noted that pay increases are never guaranteed but dependent on actual dollars in county coffers.

On Oct. 18, an administrator in Prosecuting Attorney Larry Jegley's office asked the Quorum Court for pay adjustments on two positions: victims witness coordinator and executive secretary.

Those posts were examined at the beginning of 2017, outside of the Johanson study, by the Human Resources department, Mara Malcolm wrote in an email to the 15 justices of the peace.

It was recommended the jobs be upgraded, accompanied by at least a 4 percent raise, she said. Now, under the Johanson plan, they'd receive at most a 2 percent raise on their current salaries, which were already judged too low, she said.

"Can there be any provision to make this right?" Malcolm asked.

On Thursday, Jegley left a letter for each of the eight-member subcommittee expanding on that point.

"When my administrator asked why [the two positions] were not being considered, she was told by the Comptroller that our employees would 'be a lot better off under this plan.' This is not the case," Jegley wrote.

"My employees are not even in theory graded correctly under the current system," he later added.

The topic was not broached during the six-minute-long meeting.

Justice of the Peace Phil Stowers said in a phone interview that coordinating individual adjustments "is not something that we want to start down the road of doing."

If an exception is made for one person, a line will form, he said.

In a different email, Assessor Janet Troutman Ward informed the justices of the peace of her support.

Since the 1997-98 study, "we have patched and band-aided the salary structure to try and keep it current," Ward wrote.

The new analysis was "comprehensive, fair and...very professionally handled," she said, noting she has just one employee whose pay will rise in the reconfigured system.

With pay, the county has been like A Tale of Two Cities, said Tax Collector and Treasurer Debra Buckner.

"We've been through the worst of times," she said, referring to a period of anemic, or absent, raises. The study was well overdue, she said, cautioning that it's just the first of many steps.

"We've now got it diagnosed to work toward a cure," Buckner said.

During the month of meetings, brief mention was made about possible raises for five elected county executives, a contested issue during last year's budget cycle.

At an Oct. 10 Quorum Court meeting, Jegley showed up to support the Johanson study, then pivoted to talk about pay for Ward, Buckner, Hyde, Sheriff Doc Holladay and County and Circuit Clerk Larry Crane.

"Their salaries are way below what the market should be," Jegley said.

"Some of them aren't spring chickens," he added, noting a need to present attractive salaries to candidates who might fill their places.

Raising salaries for the those offices was approved by a subcommittee in 2017, but the decision was later repealed.

A day after Jegley addressed the Quorum Court, Hyde sent an email to the 15 members.

"I want to make my position clear," he wrote. "I believe that Pulaski County should be solely focused on addressing the employee pay structure to ensure that it is fair and equitable."

Compensation for elected officials could be brought up in future budget cycles, after consideration is given to employees, he said.

Metro on 10/29/2017

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