Employees cost public about twice base wages
For each hour a public employee works, the true personnel cost equals approximately twice the rate of salary, a new study concluded.
The study, commissioned by the state of Oregon and released last week by Portland State University's Center for Public Service, didn't just look at base salaries for public employees but also factored in the cost of health insurance, retirement benefits, Social Security and Medicare taxes, overtime and paid time off.
PSU researchers used data from 21 municipal governments, including Vancouver and Clark County.
Eleven job titles were analyzed: accountant, corrections officer, finance clerk, geographic information systems analyst, human resources analyst, institutional registered nurse, maintenance crew lead, mental health therapist, police officer, senior information technology specialist and utility worker.
The goal of the study, according to the report, was to "give elected officials, government managers and public employees a more complete and comprehensive picture of the aggregate costs of employing personnel in the local and state government sector in Oregon and Southwest Washington."
Personnel costs, the study noted, are government's single biggest expense.
On Sept. 11, the U.S. Bureau of Labor Statistics reported that private industry employees cost an average of $28.80 an hour in total compensation, while state and local government employees cost an average of $41.10 per hour.
In the PSU study, researchers calculated the "burden rate" of employees by the 11 job classifications. The "burden rate" includes all employee costs: annual salary, health insurance, retirement, vacation pay, holiday pay, sick leave and overtime.
The burden rates were calculated as a percentage of the annual salary.
In Vancouver, for example, a city accountant has a burden rate of 178 percent, a police officer has a burden rate of 183 percent and a finance clerk has a burden rate of 201 percent. An accountant working for Clark County has a burden rate of 180 percent, a sheriff's deputy has a burden rate of 206 percent and a finance clerk has a burden rate of 194 percent.
The study also broke down the effective hourly cost of employees. Neither Clark County nor Vancouver topped any of the 11 job classifications.
Within job classifications, there are pay step levels.
Vancouver police officers have the highest entry-level annual salary -- $55,728 -- among the 21 jurisdictions studied. Clark County's pay for entry-level sheriff's deputies was $47,712, the 11th-highest figure.
Top-step Vancouver police officers earn $74,676 a year; top-step Clark County sheriff's deputies earn $60,876.
As for health care costs, Gresham, Ore., had the highest average annual cost for general service employees, with $20,779. Clark County ranked sixth, with an average of $16,903, and Vancouver ranked 14th, with an average of $13,898 per employee.
The city of Sandy, Ore., paid the least for general service employees' health care, at an average of $8,510.
Clark County also had the sixth-highest average annual cost for health care for law enforcement employees, at $17,297. Vancouver ranked 15th, with an average of $13,898 per law enforcement employee.
Linn County, Ore., had the highest average health care costs for law enforcement ($22,428) and Sandy had the lowest, at $9,016.
When comparing retirement compensation, Clark County and Vancouver had the lowest burden rates. Both Washington and Oregon have a Public Employee Retirement System but it's standard for Oregon jurisdictions to pay a PERS "pick-up" equal to 6 percent of an employee's salary.
Clark County and Vancouver don't pay such a pick-up.
Clark County wages are generally comparable to those offered by similarly sized counties and the private sector. But county employees pay less for benefits and enjoy more time off, according to a county analysis.
Detailed findings were shared last week with county commissioners, who received the highlights of the study in June but asked to see the data behind the conclusions.
The study on direct workforce costs was conducted as part of the county's reconfiguration efforts to ensure a balanced budget, when expenses are rising faster than revenues at a rate of about 2 percent a year.
During a Wednesday work session, Clark County Human Resources Director Francine Reis said the county bought a compensation survey produced by Milliman, a Seattle consulting firm, that used information from 13 public agencies and 68 private companies in the Portland-Vancouver area.
Additionally, the county, the fourth-largest local employer with more than 1,500 employees, invited two dozen local large employers to share wage and benefit information. Fourteen agencies and businesses agreed to turn over their information. Of those, eight are public employers, including Camas, Vancouver and Battle Ground school districts.
Private companies that cooperated included Dick Hannah Dealerships, Legacy Salmon Creek Medical Center, SEH America and WaferTech.
Private companies that did not wish to participate included BNSF Railway, Fred Meyer, Georgia-Pacific, Frito-Lay and Sharp.
Comparable counties used in the study were Thurston, Kitsap and Spokane in Washington, and Clackamas, Washington and Lane in Oregon.
Reis said the county routinely collects wage data in preparation for contract negotiations but usually draws comparisons only to other counties.
Reis said the private companies willing to share information did so only on the condition the county would not publicly reveal the specifics of each company, but average their data.
While the findings and Reis' recommendations won't result in immediate changes, they will be considered in upcoming negotiations with county bargaining units.
In March, the city of Vancouver hired a Minnesota company to examine the way it pays and classifies the jobs of workers. Results are expected at the end of the year at the earliest, said City Manager Eric Holmes.
Reis said the county matched 88 hourly and salaried job classifications with comparable jobs at other counties and 25 classifications with those of other large Clark County employers. Many county jobs -- such as judge, undersheriff or juvenile detention officer -- aren't found in the private sector, Reis said.
In county-to-county comparisons, Clark's minimum median base pay was "within market" (defined as within plus or minus 8 percent of the median base wage) in 61 of 88 job classifications; its maximum median base pay was within market for 70 of 88 jobs.
Reis used a variance of 8 percent because it allows for minor differences in job descriptions and falls within the industry standard of 5 to 10 percent.
Accountants, in particular, earn less in Clark County than in other counties but that could be because other counties pay accountants a salary and exempt them from overtime, Reis said. In Clark County accountants are hourly employees, with a pay range between $19.82 and $25.32, which gives them a median base salary that's as much as 21 percent lower than what other county accountants earn. They also earn as much as 19 percent less than accountants at other large local employers.
In comparison with other large employers in Clark County, the county was within market in 14 of 25 job classifications for the minimum median base pay and within market in 18 of 25 classifications for maximum median base pay.
The biggest differences, other than accountants, were found in office assistants and senior technical support specialists. Clark County office assistants earn as much as 10 percent less than assistants at other employers. For tech specialists, the minimum median pay for county workers was 28 percent higher than at other large employers.
The pay range for a county senior technical support specialist is $28.51 to $36.40.
Reis said many private companies provide annual merit increases and significant bonus pay for executives.
Reis said Clark's step increases in pay -- at a 4 to 5 percent rate -- are larger than the 2.5 to 3 percent steps at other counties. Coupled with cost-of-living increases, they result in larger-than-average pay increases, she said.
Reis also discussed health care costs and paid time off.
Under the contract recently approved between Clark County and the Deputy Sheriff's Guild -- it was settled by an arbitrator this summer -- the 129 deputies and sergeants will begin paying a portion of their medical premiums. They were the final group to take on that expense. While most county employees pay 7 percent of medical premiums for themselves, their partners and their dependents, deputies and sergeants will pay 5 percent.
Still, county employees pay less than workers at other large employers -- approximately $300 a month less for an employee paying to cover a family.
The county has a health-care committee made up of employees. The committee gets a budget and then decides on benefit plans, and commissioners credit the committee for keeping health care costs down by administrative cost reductions and plan designs. The committee's work, Reis said, saves the county some $18 million every year -- approaching $1,000 per month per employee -- compared with just accepting increases passed on by providers over the past five years.
As for paid time off, county employees accrue vacation days based on length of service and receive 12 days of sick leave a year with a maximum accrual of 1,200 hours. They get 10 holidays, three floating holidays (personal days) and one floating "commissioner's holiday."
The county's floating holidays exceed the market average by two days a year, Reis said. She said the floating holidays were added during wage freezes.
In the 1990s, the county stopped giving salaried managers compensatory time off for extra hours worked and instead awarded them five extra vacation days, Reis said.
Reis said county employees are allowed to bank more vacation and sick leave than most other employees, which results in higher payouts when employees leave.
Most private businesses have lower caps or "use it or lose it" policies, she said.
Reis said the use of sick leave has increased at the county. In the 1990s, an employee would take an average of 55 hours a year for sick leave. Now that number's up to 80 hours a year. Federal and state laws have extended employee rights to take time off related to themselves and family members, she said.
Reis suggested the county consider moving to a "paid time off" policy, under which employees don't have separate banks for vacation, sick leave and holidays.
Research on PTO policies shows employees appreciate the flexibility, she told commissioners.
Reis said the study results have been shared with county employees.
She said a lot of employees have expressed concern that the county will take away benefits they've earned.
Going forward in contract negotiations with the county's 15 bargaining units, Reis said, she'll try to strike a balance between meeting the commissioners' goals of attracting and keeping a valuable workforce and minimizing layoffs.
"It's a fine line," she said.
While Commissioners Steve Stuart and Tom Mielke didn't have much of a reaction Wednesday -- "It's a lot to take in," Mielke said -- Chairman Marc Boldt told the standing-room-only crowd of employees that the study was just a first step.
Stephanie Rice: 360-735-4508 or email@example.com.