Public Watchdog.org

Measure Public-Sector Compensation With Private-Sector Benchmarks

06.25.14

Once, just once, we’d like to see somebody, A-N-Y-B-O-D-Y, in a management position within one of our four main local governmental bodies actually offer something insightful and constructive about how to compensate their – or, more correctly, OUR – public employees.

And we don’t mean by simply increasing the previous year’s pay by the cost of living, or by some arbitrary percentage.

Heck, we’d even offer a trophy for the accomplishment, something at least as tall, shiny and expensive as those silly faux self-esteem “participation” trophies given to kids just for showing up – or sometimes even just for signing up – for a sport or activity.

Unfortunately, City Mgr. Shawn Hamilton won’t be winning any trophy this year, judging by his “Compensation Study” dated June 23, 2014 – the basic premise of which is that the best way to determine fair and reasonable compensation for our public employees is to look at what other communities are paying their public employees.

That kind of thinking is seriously flawed because it assumes three key facts not in evidence: (1) that what other communities are paying their employees actually is fair and reasonable for those communities, rather than inflated amounts; (2) assuming it is, that the job duties and conditions of specific positions in those other communities are directly comparable to specific positions in our community; and (3), assuming they are, that such “comparable” compensation is fair, reasonable and affordable for our community and its taxpayers.

Interestingly enough, Hamilton’s Agenda Cover Memorandum suggests that his own study fails to satisfy all three of those criteria, as he writes:

“Not all the communities [in the study] are of similar size, nor would each community be considered comparable to our City. In addition, employees with similar job titles do not necessarily perform the same duties and may be treated differently for overtime purposes in some instances.”

So what’s the point, Shawn? Did you set up that compensation study as one of your goals for this just-concluded fiscal year, and then figured you had to provide some kind of deliverable no matter how worthless it might actually be?

Setting appropriate public employee compensation has become more difficult in the past decade or two, as the membership and power of public-sector unions has far outstripped that of their private-sector counterparts. The union-directed wages and benefits also have trickled down to the non-union employees, who seem to keep getting raises for nothing more than holding their jobs for another year – as do their counterparts in neighboring communities, presumably because all the bureaucrats managing those staffs sing from the same hymnal.

Which is why the idea of basing what we pay on what other communities pay is just plain foolish.

First of all, does anybody but our own public employees think they are being paid too little and/or receiving too few benefits?  If so, can you identify the City (or D-64, or D-207, or Park District) employees who have voluntarily left their employment here to accept a comparable position in any of those neighboring communities – and by “neighboring” we mean the greater Chicagoland metropolitan area?

We can’t think of many. In fact, we can’t think of ANY.

Second, the pay and benefits our community offers its public employees should be viewed in light of the fact that when any public-sector jobs open up here, there reportedly are far more than enough quality applicants, especially for police and fire jobs.

And why not? Not only is the pay good, but the work isn’t all that difficult or dangerous, relatively speaking. For example, our police don’t have to ride herd on groups of gang-bangers shooting it out every Saturday night in front of the Pickwick, or play real-life Grand Theft Auto; and with no building other than Lutheran General topping 5-stories, firemen don’t have to worry about battling prospective Towering Infernos.

That’s not meant to disrespect either department but, rather, to highlight how fortunate we (and they) are to be living and/or working in such a safe and affluent community – one where the crime rate actually keeps dropping to the point where Location, Inc., a leading location-based data and risk analysis firm, last year ranked Park Ridge the 72nd-safest community in the nation, based on the number of reported property crimes and violent crimes per 1,000 residents in 2011.

In light of these happy facts, we have a suggestion for Mr. Hamilton:

Instead of wasting time studying what neighboring communities pay their employees, try studying what it would cost the City to outsource as many of these services as possible. And once you’ve done that, correlate those costs with the fully-loaded (i.e., including the costs of pensions, sick days, vacation days, uniform allowances, etc.) costs of the City’s in-house people who currently provide those services, to determine what the economic differential is between in-house and out-sourced.

We can’t find anything in the Illinois statutes, or in the City Code, that requires all of these services to be performed by City employees.  So with the Uptown TIF albatross chained around the City’s neck for at least another 11 years, multi-millions of dollars of flood remediation to be done, and the recent report that Park Ridge’s collective property value has dropped 17.8%, all City costs need to be put on the table if our community is to stay afloat financially without extremely painful tax increases.

That’s why the “this-is-the-way-we’ve-always-done-it” management style of years gone by no longer cuts it. If City taxpayers can’t get the best price AND the best value from the current system of in-house public employee staffs, then it’s time to look at private-sector alternatives.

Maybe exploring the private-sector option will show that we’re already getting a bargain from our public employees.  Maybe not.  But it’s time for an outside-the-box approach to what has become a chronic problem of ever-increasing personnel costs with no end in sight.

And if our $155,000/year City Mgr. – who just happens to be the third lowest-paid city/village manager on his list of 27 comparable communities – can’t figure that out on his own, then it’s high time the Mayor and City Council told him so.

In no uncertain terms.

To read or post comments, click on title.

16 comments so far

A critical point of any wage and salary survey is that the job descriptions from one participating company to another must match. Not the job title, the job description. If the descriptions don’t match, you cannot compare the salaries. It takes some work and attention to details, but it can be done!

EDITOR’S NOTE: Of course it can be done, but why spend the time if it’s still GIGO?

What you propose makes sense. Too bad its got no chance of being enacted because bureaucrats want to keep growing their numbers like illegal immigrants keep wanting to grow their numbers so nobody will try to change the situation.

EDITOR’S NOTE: The larger and more complex you can make it, the less likely it will be changed.

That’s the theory behind Eisenhower’s warning about the “military-industrial complex”:

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

http://www.ctvnews.ca/mobile/business/ikea-raises-minimum-wage-for-u-s-workers-adjusts-according-to-cost-of-living-1.1887092
Private sector company re evaluating annually its employee wages

EDITOR’S NOTE: At the end of the day, however, the capital market will determine from IKEA’s (and every other company’s) profits, market share, prospects, etc. whether that was a good move or a bad one. But the last time we looked, the only “market” that measures Park Ridge’s “success” just dropped 17.8%. (I.e., the City’s re-assessed real estate EAV, as reported by the Cook County Clerk’s office)

Re” EVA – I heard on channel 5 news this morn that PR “might” raise real estate taxes by 16% due to the uptown TIF. No source cited.

EDITOR’S NOTE: It’s “EAV.” And, yes, that’s true: according to Finance Dir. Kent Oliven, the recent 17.8% decline in the City’s EAV, combined with the Uptown TIF district’s even steeper decline in value, makes an even-greater-than 16% increase likely.

So the Uptown TIF “chickens” keep coming home to roost…with an ever-increasing vengeance.

But where, oh where, are our former mayors and aldermen who gave us this white elephant/black whole…WITHOUT EVEN THE COURTESY OF AN ADVISORY REFERENDUM?

Your kind of annoying with your constant references to the former mayros and the former aldermen who passed the Uptown TIF, but I am willing to put up with it because this seems to be the way government in Illinois has gone south over the years. While a constant like Madigan has been there for 30 years, most of the other fools who screwed up the state have come and gone, disappearing without a trace and very few fingerprints other than those that people like you keep digging up and reminding us about, like Govs. Thompson, Edgar and Ryan. In Park Ridge we have Wietecha, Marous and Frimark, plus the former aldermen. Are we really as screwed as we are looking to be and going to be stuck with big tax incrases for years to come?

EDITOR’S NOTE: How screwed we are remains to be seen, but we would bet or more rather than less.

Once, just once – to quote the all knowing blogger – would he get his facts straight. For someone so intelligent, wouldn’t you think he would get his information from direct knowledge – no – he relies on the newspaper reporters and his underground sources. Maybe if he would man up and show up in person vs. the basement life he enjoys living in he would get the real facts- but we understand his fictunal life suits him better – his 1% of the population can live in their unfactual world – that makes them happy good for them, have a great time here in your unfactual unreality world while the rest of us enjoy our real iives.

EDITOR’S NOTE: Nice rant for someone who can’t (or won’t?) identify even one of the “facts” you claim we don’t have straight.

Governments (local and state) create monopolies for their public employees, which result in market-resistant compensation and benefit packages. Shopping the private sector sounds like the best way to break the stranglehold of those monopolies.

RE: 16% tax increase:
Leaders produce solutions not excuses.

I’m surprised that the elected officials are surprised. But, hey, continue to mock economic development and whine about the TIF. It’s not a tough equation….Park Ridge needs more money because of the TIF. There has been no refinancing, no effort whatsoever of trying to increase commercial property values to help taxpayers.

When it is 16%, look at the elected officials CURRENTLY in office, who have been in power a long time to produce the current shockingly bad results.

EDITOR’S NOTE: Are you Wietecha, Marous or Frimark, cloaked in anonymity, trying to alibi yourself out of any accountability for burying the City in multi-millions of bonded debt and a projected $20 million-plus loss on the moronic Uptown TIF? Because you sound like the local equivalent of Dick Cheney trying to blame Barack Obama for “losing” Iraq.

Both the local newspapers and this blog have previously explained why there has been “no refinancing” of the TIF debt so far. And it’s no surprise that the same boneheads who brought us the Uptown TIF also came up with the ridiculous Facade Improvement Program that squandered a couple hundred thousand (?) public dollars helping private building owners spruce up their buildings with no noticeable public benefit – unless you think the building that formerly housed Pines Menswear is more valuable empty.

I’m surprised you brought up Cheney – Obama as a comparison, because it really indicts the Mayor and Alderman as incompetent failures by your own parallel.

Just because one move (Iraq or the TIF) was stupid, doesn’t allow the excuse of current leadership to fail. Leaders can’t lead like the past didn’t happen.

Maybe the facade improvement was pointless, that doesn’t mean EVERY action to try to make Park Ridge commercial properties more attractive is futile. The problem is, no one in elected office or in city staff has any clue on what to do in this area.

Obviously comparing war to a city TIF is ridiculous, but the point is, current leadership IS called upon to solve problems. Unfortunately, President Obama completely blew Iraq, and the Park Ridge elected leadership has done nothing to help city taxpayers mitigate the TIF.

If there really is a 16% tax increase, you will see a complete turnover of elected officials.

EDITOR’S NOTE: It’s not that “one move” was merely “stupid” – it’s that it put the U.S. and Park Ridge, respectively, in an untenable and irretrievable no-win position.

Read that silly report prepared by the Economic Development Task Force and you will see a bunch of retreaded or just plain lame ideas that highlight how bankrupt Park Ridge currently is when it comes to the ability to attract significant new retail and/or other business. Of course, if you’re one of the purported speculators who bought up or optioned property in the TIF or on its perimeter, you desperately want the City to buy your land or throw millions of tax dollars worth of incentives at businesses who will – as the EDTF demanded when the Whole Foods developer asked for a few million of tax revenue sharing.

The voters can do whatever they want, but almost 20 years of post-Butler Homeowners’ rule not only neglected the City’s infrastructure but also its retail and commercial climate. And the Uptown TIF albatross pretty much buried it for the foreseeable future.

10:27am, when you have the magic wands it would take for the CURRENT elected officials to undo what Wietecha, Marous and Frimark (Wietecha and Marous primarily) foisted upon the taxpayers please do hand them out.

Refinancings are likely to occur when existing binds are callable. And, anyway, any refinancing of the debt is a drop in the bucket compared to the frickin’ $40 million of debt these idiots referenced committed the City to when they put the full faith and credit of the City’s general fund up as a backstop to the crap TIF they put together and made the City partner to.

And let’s not forget, those brainiacs referenced actually had the City +$20 million ahead at the end of the TIF so they were nearly $60 million off!!! OMFG.

But sure, the CURRENT office holders, around for +/- 3 years each, excepting for Sweeney, it’s all their fault. Riiiiggghhhhhhhhhtttttttttt…

EDITOR’S NOTE: Those “brainiacs” provided a virtual case study of how NOT to do a TIF. They couldn’t have done any worse a job if they had actually tried to nuke the City.

And then every single one of them, with the exceptions of Howard Frimark, then-6th Ward ald. Rex “Shotgun” Parker and then-2nd Ward ald. Rich DiPietro, either packed up and moved out of town (Wietecha and Schuenke) or disappeared into the mist without even standing for re-election.

But that’s what passes for “leadership” to Mr/Ms. anon. @ 10:27 and 12:01.

How the hell are city officials supposed to increase the value of commercial property? Fracking? And let’s be honest, we would have to increase our sales tax revenues by a whopping percentage to cover the TIF deficit. It would take five more Whole Foods to do it. Even all the businesses that Ryles claimed he would bring in would not provide more than a drop in the proverbial bucket. The worst part about all of this is that prior Councils and city administration were deficit spending to the point that they almost completely depleted the City’s General Fund which began the TIF era with a nice $16 million balance. So now we have TIF balloon payments with no assets to cover them. Exactly how is that the fault of the current group?

EDITOR’S NOTE: It’s not.

But if you’re one of the Uptown TIF perps, or one of their apologists, or one of the post-Butler Homeowners Party “political mopes, weasels and bloodsuckers running things for decades” (quoting from Kass’ Tribune column today re Illinois), or one of the many parasites who want bigger and more irresponsible government to prey upon, that’s pretty much all you can say.

Didn’t the developer of Uptown sell of its interest for a bundle of cash within the last two years? Wasn’t the city suppposed to get a piece of that? Or was that more pie in the sky from those former mayors and the former council?

EDITOR’S NOTE: The Uptown Development was sold in 2011 to POB Uptown LLC, a Texas limited liability company that we understand was created solely for the purpose of acquiring and holding the Uptown property. As for the City sharing in any profit, check out our 09.30.11 post for a further explanation of how that pipe dream turned out.

“Texas limited liability company” pretty well describes your ideal world, but it sucks to be on the receiving end, doesn’t it? I love how you and your adherents manage to shoehorn both illegal immigrants and the military-industrial complex into the mix here in Norweegia. We have none of the former and your ilk wants to give even more of our dwindling gelt to the latter. Decades from now, when you few, you joyless few, have secceeded from the Union, people will be enjoying the view and the food in some joint at the TIF, and saying, “do you believe this was seen as another Fulton’s Folly back in the olden days?”

EDITOR’S NOTE: Hmmmm…we can’t recall ever extolling the virtues of the Lone Star State, or of giving ANY of our “dwindling gelt” to “the military-industrial complex” – so you might need to re-calibrate your radar a bit.

As for your conviction that we don’t have any illegal immigrants here in Park Ridge, you might want to steer clear of the kitchens of some of our local restaurants, and avoid shouting “Federales!” around the folks who mow lawns and trim bushes, or shingle roofs, or provide a number of other services around town. And if you were to check around at some of our more moderately-priced multi-family residences, you might be surprised at the colors of the passports you’d find there.

But since you seem to be an Uptown TIF fan, you should know by now that there’s no need to wait “decades” to see people enjoying the food and the view from the patio outside Houlihans, or Jason’s, or Noodles, without a care in the world about the $6 million of red ink already generated by the Uptown TIF, or about the projected $17 million more to come. Of course, they probably aren’t Park Ridge taxpayers but, what the hey, they’re contributing a whopping 10 cents of their $10 bill to our tax base. So it’s all good, right?

Just curious if the “Select” Non-Union Staff who were entitled to robust raises were justified or was it a standard case of favoritism??

EDITOR’S NOTE: We assume you are talking about the raises reported about in the March 8, 2014 edition of the H-A titled “Park Ridge city manager wants raises for four employees.”

According to that article, CM Shawn Hamilton recommended those raises – labeled “special merit awards” – for two employees because they were hired at salaries “below the median salary range for their first 12 to 18 months of employment,” while similar “merit” awards for two other employees were reportedly “based upon consistent strong performance above and beyond the call of duty.”

You consider Hamilton labeling their raises as ““based upon consistent strong performance above and beyond the call of duty” as justification??

Was their any documentation or specificity in what exactly they did that was strong, above and beyond??

EDITOR’S NOTE: No. And no. But that wasn’t our point.

Our point was that the City’s chief executive officer making $155,000 ($187,407 total budgeted cost) and the City’s human resources director costing $56,705 (all in) have made that recommendation, which means that either the mayor and the Council need to (a) rely on their recommendation, (b) demand back-up for it, or (c) outright reject it.

Based on our understanding that no back-up was even provided as part of the recommendation, we’d choose (c). And maybe also add (d): tell Hamilton and Suppan that if they ever make such an undocumented recommendation again they will both be ash-canned immediately.

Your response to 07.02.14 3:24 pm raises a problem that seems to be endemic to the elected officials who operate our local governments. These public payrollers act like they are immune from accountability, discipline, pay cuts, or termination. City Mgr. Hock was a problem for at least 2 years prior to the Council firing him, and the same could be said for District 64 Supt. Bender. Park District Director Mountcastle is bulletproof, and District 207 Supt. Wallace got a 5-year contract extension as reward for D-64’s performance continuing to decline. What a sick joke on the taxpayers.

EDITOR’S NOTE: Exactly. It’s as if all public employees, especially the higher-level ones, are viewed as indispensible and irreplaceable by our elected officials.



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