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Greater raise sought for lowest paid city workers

Monday, August 23, 2004 by

AFSCME, Futrell disagree over cost to city coffers

Council Member Raul Alvarez and Mayor Will Wynn plan to ask City Manager Toby Futrell to consider raising the pay of all city employees to at least $10 per hour as part of the city’s 2004-2005 budget. Alvarez told In Fact Daily “Really, it’s an idea that’s surfaced in this budget process and I certainly think it’s worth considering. These will be the folks who have felt the greatest impact over the last couple of years as salaries have remained stagnant. During that time health care costs have continued to rise. I certainly think it’s worth the effort to see if we can't identify the funding for this sort of change in the budget.

“This is an idea that’s just beginning the discussion phase,” Alvarez added. “I see it more as an adjustment to the city’s stated commitment to pay a living wage.” He said he believes the minimum living wage for Austin is considerably higher—between $12 and $13 per hour, based on rent not taking up more than 30 percent of a wage-earner’s income. Wynn could not be reached for comment.

The lowest salary for regular city employees is $9.00 per hour, according to Jack Kirfman, political action coordinator for the American Federation of State, County and Municipal Employees (AFSCME). He said, based on numbers provided by the city, that the additional raise would cost the city about $299,000. The union counts about 1500 Austin city employees within its ranks. He said employees making less than $10 per hour work in the Aviation, Building Services, Water and Wastewater, Parks, Solid Waste Services and Library Departments.

Futrell said the lowest paid city employees are actually hired in at $8.50 and later raised to $9 per hour. While agreeing that those at the bottom of the ladder are the hardest hit by cost-of-living increases she said, “AFSCME is oversimplifying the problem. They're not calculating that you have to move everybody else up the chain and that is a much bigger number—it’s probably closer to $8 million,” if the raise treats everyone equitably.

Employees who are at $10 an hour might need additional raises if the floor is raised to their level, according to City Public Information Officer Kristen Vassallo. It might seem inequitable to a person making $10 an hour with several years of experience to suddenly make no more than another employee with less experience and time with the city, she said.

“There are only a handful of positions at the city,” that pay such low wages, Futrell said, mostly in the building maintenance and parks areas. But, she added, “We need to be sure that we are paying them as fair a wage as we can. What we’re doing right now is we’re taking a look at each of the positions at that low end.” The city will be “looking to see where we have trouble hiring and retaining employees and we’re costing out the true cost of making that change. But we’re trying to pick the areas where we have the greatest problem and start trying to make the changes in priority order,” she concluded.

Futrell had planned to spend about $225,000 on raises above the 3.5 percent set aside for all rank-and-file employees. The city uses an evaluation system for employees called Success Strategy and Performance Review (SSPR). With the exception of the small number of employees who have not met expectations, every employee is deemed to have met or exceeded expectations. In the past when additional money was available, employees were rewarded for being judged to have exceeded their boss’s expectations. However, money was allocated on a departmental basis and only 20 percent of a department’s employees could be rewarded with the extra cash so it could be possible for a particular employee to have exceeded expectations but not receive the additional raise. City employees have not received a raise for the past two years due to budget constraints.

Kirfman said, “When we talked to employees this year—on ‘exceeds’ you get an extra 1 to 1 ½ percent —they felt like there was favoritism,” in how those funds were distributed within departments. “It was not fair and they felt like if anybody was going to get a raise, all should get the same.”

Vassallo explained Futrell had heard the same things the union was hearing when she was doing her town hall meetings with employees. “There were a lot of questions,” she said with the SSPR reward system receiving a mixed reaction. “We’re actually doing it differently this year.”

Futrell has proposed this year that each department receive the equivalent of 1.5 percent for 20 percent of the employees and each department will determine how that money is distributed. “We’re giving the departments their own discretion," on how to allocate the money, said Vassallo. Each department is being asked to design a rewards and recognition program and submit the plan to the manager by sometime in December.

Kirfman said one of the biggest problems for those at the lowest salary level is paying for health insurance. The city’s health care costs are going up again this year and the city is not paying those extra dollars for dependent insurance premiums, Kirfman said. “That means some employees—an amazing number of people—will actually lose money in their paychecks. The only reason they work there is they need coverage for their families,” he said, but for those in the lowest pay category who have families, the pay raise promised to all employees will evaporate.

Kirfman said, “I've talked to some people who’ve said, ‘I can carry my kids but not my wife.’” But making such a decision is a gamble. He said many city employees “make more a day than those make a week.” He added, “A lot of people in the higher pay brackets said this was a better way to use the money than the awards and recognitions program.”

Vassallo confirmed that dependent insurance premiums would go up again this year. However, she said, the city “has run those numbers on the lowest paid employees and no one will lose money as a result of health care. Obviously, in addition, there are some compression issues we’d have to address.”

Finally, Futrell said although the budget she presented to the City Council left about $350,000 for the City Council to add in items of their choosing. However, she said the hospital district board had made several requests for additional funds. When the city calculated how much to give the district, based on this year’s budget, she said the city failed to consider funds spent from another department on building maintenance for the health centers. That amounts to “a little under $500,000 that would pretty much take away that unallocated pot of dollars if City Council chooses,” to give that money to the district, she said. “So all of these discussions about what else can we do may be moot.”

Some Block 21, Seaholm responses rejected on arrival

Friday was the deadline for developers to submit proposals for purchase and redevelopment of what the city calls Block 21 on Second Street and for a request for qualifications for those who would like to redevelop Seaholm Power Plant. Although the city received five proposals for Block 21, only two of those were on time and would qualify as development plans, according to Austan Librach, director of the Transportation, Planning and Sustainability Department.

Proposals for Block 21 from Stratus Properties, Inc. and Endeavor Real Estate Group will be evaluated by a panel, which will probably meet in a couple of weeks, Librach said. Seaholm Venture Group by Simmons Vedder & Co. and Zydeco Development submitted proposals one minute and five minutes late respectively, he said, so they will not be considered. In addition, Cypress Real Estate Advisors, Inc. “just offered to trade some land,” Librach said. That proposal was considered non-responsive, he said.

Only three of six descriptions and conceptual proposals for Seaholm arrived by the deadline and met all the necessary requirements, Librach said. The evaluation group will consider proposals from Faulkner USA, Seaholm Power LLC by Southwest Strategies Group and Stratus Properties, all local Austin companies. The Simmons Vedder Group’s proposal was late, again, by one minute, Librach said, while Proposals from Gables Residential of Austin and Rick Watson of the American Center for Entrepreneurship of Austin, while not late, failed to meet all the city’s requirements.

The group will make a recommendation to the City Manager in about a month, with a recommendation going to the City Council later this fall, Librach said.

Clean air hearing today . . . The Texas Commission on Environmental Quality is holding a public hearing today on the Early Action Compact approved by Austin and the surrounding counties to reduce air pollution. In July, TCEQ Commissioners gave their preliminary approval to most, but not all, of the measures proposed locally to make sure Central Texas meets federal guidelines for ozone pollution. The TCEQ approved emissions testing for automobiles, but rejected several measures that would affect industrial facilities and major employers. The public hearing will be at 2pm at the TCEQ's offices at 12100 Park 35 Circle in north Austin. The hearing will be preceded by a presentation on the clean-air plan at 1:30pm . . . Other meetings . . . The Arts Commission will hold a special called meeting at 5:30pm at Town Lake Center to approve a recommendation for funding cultural arts for FY2004-2005 . . . The Design Commission will meet at 5:45pm today in the 11th Floor Conference Room of One Texas Center.

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