Commissioners struggle with labor costs

The Flathead County commissioners will face some difficult decisions during the upcoming budget cycle, particularly with labor costs.

The county currently employs about 480 people in more than 100 job categories. It will spend $16.4 million on wages and salaries this year - almost 30 percent of the county budget - and that doesn't include benefits.

Last week, the commissioners learned that just giving employees a 3.4-percent cost-of-living adjustment and their typical longevity pay would bump labor costs up $518,000.

Moreover, Human Resources Director Raeann Campbell on Monday recommended that pay grades for 22 job categories be adjusted upward to reflect market conditions.

If approved, this proposal would affect about a quarter of all county employees.

Health-insurance premiums and workers' compensation costs also are expected to increase for the next fiscal year, which begins July 1; state-mandated retirement contributions could go up as well.

The total cost of all of these adjustments and increases hasn't been determined, but it would almost certainly exceed $750,000 and could approach $1 million.

Given how tight the county's budget is - and the number of other pressing needs the county faces - it's unclear whether all of these changes can be afforded.

The commissioners acknowledged as much last week. Based on the recommendation of the county Compensation Board, they directed staffers to prepare a budget for fiscal 2006-07 that includes the 3.4-percent cost-of-living adjustment. However, they also suggested that the percentage could be scaled back, depending on how the overall budget turns out.

The 3.4-percent figure comes from the Montana Association of Counties and the state, which approves a cost-of-living adjustment for local government property-tax levies every year.

The commissioners took no action on Campbell's pay-grade recommendations, which were based on a recently completed wage and salary survey.

Campbell sent job descriptions to 28 state and local government offices and private businesses in Montana, Wyoming and Idaho, asking them to provide information on current average wage rates for these jobs, as well as the minimum and maximum wages, longevity pay and benefits.

She received 17 responses. Only two were from private businesses, so it's difficult to determine how the county's pay rates compare with nongovernmental rates. Campbell said she sent the survey to several local businesses, but most did not respond.

The survey covered 118 county job descriptions. The only positions that weren't included were for elected officials and sheriff's deputies, because their pay rates are governed by state statutes.

Campbell recommended that 22 job categories be bumped upward in pay grades. The affected positions include seasonal jobs with the Parks and Recreation Department, building maintenance, office assistants, some animal control and planning positions, and other miscellaneous job categories.

She didn't recommend any decreases in pay grades.

Most of the suggested pay increases would add 5 percent to 10 percent to the base rate for these jobs.

Campbell also recommended that two department head positions be bumped up one pay grade - her own and Jed Fisher's, who has an unusual position directing the Weed, Parks and Building Maintenance departments.

The suggested increase would bump their base pay up by about $4,300 and $4,000 a year, or 8 percent and 7 percent, respectively.

Campbell said it's been several years since the county adjusted its pay grades to reflect market conditions. The county is having problems recruiting and retaining entry-level and office employees, as well as seasonal workers, building maintenance crews and department heads.

For example, the county still hasn't replaced former Office of Emergency Services Director Alan Marble, partly because qualified candidates have balked at the salary. Similar issues arose with the county administrator and planning director positions.

"We advertised for 142 positions last year, and 41 of those had to be readvertised" either because there weren't any applicants, the applicants weren't qualified or because people refused the job when it was offered to them, she said. "The county has averaged 18 percent turnover in each of the last two years; including seasonal employees, it's closer to 30 percent. Some departments had 40 [percent] to 50 percent turnover."

Campbell said money isn't the only issue in the turnover, and with some departments it probably isn't even the main issue. However, pay is a contributing factor, particularly with the lower pay grades.

"We don't want to be the highest-paid [compared with the other survey respondents], but we don't want to be the lowest, either," Campbell said during Monday's meeting. "I'd ask you to consider these recommendations seriously. We're having a tough time recruiting, and unemployment in the valley is low. Everyone's competing for the same workers."

At least once before, Flathead County went through a time when it fell behind on wages. Commissioner Bob Watne, who was in office at the time, said correcting that situation was difficult.

"When you don't keep up, it's real expensive to get caught back up," Watne said last week.

Reporter Bill Spence may be reached at 758-4459 or by e-mail at bspence@dailyinterlake.com