Four Spokane Valley City Council members voted Tuesday to withhold a 2.5 percent cost of living increase in 2011 from the city’s nonunion employees despite the fact that the city will have $24 million left on the books at the end of the year.
Councilman Dean Grafos made the motion, which was agreed to by Mayor Tom Towey, Councilwoman Brenda Grassel and Councilman Bob McCaslin. “We are in tough economic times,” Grafos said. Freezing the salary increase for one year will give the council’s finance committee time to “get a better read” on the severity of the city’s revenue drop due to decreased taxes, he said.
Grafos said he knew his proposal would not make him popular with city staff, but said he didn’t want to fund employee raises out of the reserves and wanted to make sure no employee layoffs would be needed in 2012. “This council should apply the brakes,” he said.
The city has 18 nonunion employees, mostly supervisory staff with a few administrative assistants and other employees in the group. “How much money would we save?” said Councilwoman Rose Dempsey. City Manager Mike Jackson said withholding the cost of living increases would save the city between $40,000 and $50,000.
“I have to say I think this is breaking faith with our employees,” Dempsey said. “We have always treated our employees the same, union or nonunion.” The city should not create a group of “second-class citizens” by giving some employees raises and not others, she said. The city must give the scheduled COLA increase to union employees because it is required by contract.
“I think we have an obligation to the taxpayers first,” Grafos said.
“Mr. Grafos, the sky is not falling,” Dempsey said. “I kid you not.”
“I am not asking to lay off employees,” Grafos said. “I’m not even asking them to give up what they’ve gotten.”
Dempsey said the employees were promised the raises and acknowledged that it was the previous council that made that promise. But she said that new legislative bodies are always accepting what has gone before and building on it, otherwise the United States would “have a new constitution every two years.” “We have the money to pay for it,” she said. “Why not live up to our word?”
Grassel said the citizens are “sick and tired” of seeing city employees get raises while they are dealing with pay cuts or job losses. “I would venture to say we would get kudos from the citizens” by making the cuts, she said.
Councilman Bill Gothmann joined Dempsey in arguing against the cut. “I would have no objection to cutting pay if there was a need,” he said. The current council set a goal of maintaining a 15 percent carryover at the end of each year while maintaining a $5.4 million reserve fund. “Those goals are met in the current budget.”
“Mr. Grafos, are you willing to take a 2.5 percent decrease in your council pay?” Dempsey said. “Oh, absolutely,” Grafos replied. “So will I,” said Dempsey.
Grassel said the city has new items in the budget to pay for, including setting aside $100,000 for increased retirement costs, and that she wants to avoid having to cut staff in 2014. She also recommended that the finance committee should reopen the union contracts for renegotiation.
Councilman Gary Schimmels said it was too late in the budget process to make such a change, though he might support something similar for 2012. “I would support this if it was early on in the year,” he said. “We’re in the ninth month of this budget exercise.”
Grafos’ motion was part of the first reading of the ordinance to approve the 2011 budget. The budget is scheduled for a final vote of approval on Oct. 12.
In other business, the council unanimously approved adoption of an ordinance setting wastewater pretreatment standards and approved an interlocal agreement with the city of Spokane so Spokane can continue to provide sewer service to a small section of the Yardley area. A unanimous vote also passed a $700,000 contract with Pose Asphalt for winter snow plowing. The council also gave its final nod of approval to an ordinance setting the 2011 property tax levy to 1 percent lower than what is being collected in 2010, costing the city about $100,000 in revenue.