County workers' rising pay stirs debate.

Byline: Matt Cooper The Register-Guard

On July 1, the Lane County commissioners will cut about 250 jobs in public safety, public health, public works and elsewhere if the federal government hasn't renewed crucial annual aid.

The same day - the start of a new fiscal year - a new commissioner-approved pay scale takes effect that gives directors, managers, supervisors and nonunion professionals working for the county the opportunity to earn, over time, up to $20,000 more a year in salary.

The county also will continue to pick up the rising compensation costs of all workers, from the commissioners down through the ranks. Those employee costs - including pay, retirement and medical benefits - soared 34 percent from 2000 to 2006.

The steady growth in pay and benefits for county workers has been thrust to center stage by voters' overwhelming rejection last week of an income tax to help fund county services.

Critics say that given the possible demise of federal aid, the county needs to take a hard look at priorities: Instead of cutting jobs, slash per-worker compensation costs.

County officials respond that they've trimmed the increase in employee costs but must pay well enough to attract and keep quality workers.

But if the county continues to spend more in wages and benefits than it collects in revenue, then it only digs itself deeper into the hole.

None of the commissioners on the board in December when the new pay scale was approved could be reached for comment. But Commissioner Bill Fleenor, who joined the board in January, said he would have voted against it.

"You can't always get what you want - there's a song about that," he said. "We have to live within our means."

Last year ended with mixed results for the county's workers.

Voters had just defeated an income tax for public safety. Concern was growing that the federal government wouldn't renew $47 million in yearly timber aid payments. Fears of layoffs were simmering.

Yet the board of commissioners in mid-December approved a new, higher pay scale for 180 department directors, supervisors, managers and others who aren't in county unions. The new scale starts July 1, with salaries well above current limits.

Consider department directors Rob Rockstroh, Tony Black, David Suchart and Ollie Snowden, who oversee health and human services, information services, management services and public works, respectively.

The current scale caps their pay at $98,000. But after July 1, directors can earn annual merit-based raises of 4 percent to 6 percent and eventually reach $118,000 in annual salaries, depending on their duties. The new scale lays out a similar pace of merit-based raises for other nonunion employees.

The raises are imperative because as contracts have pushed up pay and benefits for union workers, supervisors and managers are earning the same or less in total compensation than the union workers they oversee, said Greta Utecht, human resources director.

Lower-level workers haven't applied for higher positions, citing long hours without more compensation, Utecht said.

The county was paying supervisory jobs at 10 percent to 30 percent below the market rate, despite the fact that county managers oversee more workers - 12 per supervisor - than their counterparts in Eugene and Springfield, she added.

The new pay range appears in line with the same job in other jurisdictions:

Directors for the city of Eugene can earn $97,000 to $122,000.

In Springfield, directors can earn $75,000 to $105,500.

In the Eugene School District, an assistant superintendent - which the county likens to a department director - can earn $95,000 to $119,000.

Still, Fleenor said the county's new pay scale is too high given the uncertainty of continued federal money and an electorate that has shot down more taxes for county services twice in seven months.

"I know how hard these people work - I am amazed at the level of dedication of Lane County employees," Fleenor said. "But you can only pay them what you can afford. And the taxpayers have spoken."

If the county eliminates 250 jobs, the rank-and-file won't be the only group affected, Utecht said. At least 20 jobs will be cut from management.

The job cuts also could prompt other departures, but the county will try to keep workers happy with the total compensation package.

Two key benefits are health insurance and retirement, which draw people to county jobs but also drive up costs for county government.

Statewide, just more than half of all workers received some sort of health coverage from employers in the 2002-04 period, the Oregon Center for Public Policy found.

County employees generally pay deductibles of $100 to $150 annually - but never more than $500 to $1,000 annually - for health plans that include vision and dental insurance, and also cover dependents.

Under the plans, workers pay $15 to $35 apiece for drug prescriptions, or 20 percent of the cost after meeting a $100 deductible.

And even as it has lurched into a fiscal crisis in recent years, the county has sweetened the retirement package for its 1,500 workers.

Historically, workers paid 6 percent of salary into retirement accounts, and the county contributed an additional amount equivalent to 6 percent of the worker salary.

But as other government employers started paying the workers' share for them, Lane County was forced to follow suit to stay competitive, Utecht said.

Now, county workers pay nothing into their retirement accounts, and the county pays an amount equivalent to 12 percent of the workers' salary. That's effectively a 6 percent increase in compensation to each worker.

In exchange, county workers have accepted smaller cost-of-living raises, or none at all.

From 2002 to 2007, county workers received cost-of-living raises totaling no more than 7.25 percent for the entire period, the county said, while inflation during that five-year period was 12.7 percent.

Today, the average county worker makes $47,000, not counting overtime. That's well above the median household income statewide of $43,200. Utecht justified the expenditure, based on the many doctors, attorneys, engineers and other professionals the county employs.

Pay and benefits come at an ever-rising cost: From 2000 to 2006, the total cost of employee compensation rose 34 percent, fueled by medical and retirement benefits, the county said.

But county officials believe that they can save money by paying less in raises and more in benefits. That's because benefits are calculated from pay - if pay is kept low for longer periods, benefit costs stay lower, too, officials said.

For example, workers in the county's largest union - the 650-strong American Federation of State, County and Municipal Employees - accepted cost-of-living raises averaging less than 1 percent annually from 2002 to 2008.

The nurses and mental-health professionals among them could make 30 percent to 50 percent more in the private sector, but many members are older and appreciate the health benefits, union President Cheryl Dyer said.

The union might again accept little or no cost-of-living increases in the next contract talks, Dyer said. But there could be resistance to cuts in benefits or shifting more of their cost to workers, she added.

"The majority of the current AFSCME employees are here for the benefit," Dyer said. "We are getting older and using it. (The cost of living) has gone up in the last three years, and we haven't seen the net income to keep up with that - there's a lot of give there."

Likewise, the public works union is getting cost-of-living raises averaging 1 percent annually from 2002 to 2009. But there is also value in the benefit package, which is worth about one-third of wages, said Brad Rusow, union president.

The union has yielded on pay and benefits, he added, and at some point the county must weigh whether it can attract good help.

"If you're not going to be paying market (rates), you're not going to get good employees," Rusow said. "I can't see where we have concessions to give up."

For his part, Commissioner Fleenor said he can't say whether the union contracts cost too much. But unions and management must answer that very question, he added.

"We need to work more closely together to take a look at the resources that are available," Fleenor said. "The taxpayers have sent us a clear message - the unions and county management - we have to live within our means."