Budget Committee Questions Payroll

The Budget Committee has again expressed concerns about the compensation and benefits of municipal employees. In a letter to the Board of Selectmen the committee has recommended awarding performance bonuses as one-time lump sum payments rather than as a percentage increases in base pay and revising the method of calculating the annual cost-of-living adjustment (COLA).

For some time the committee has been troubled by what it considers rapidly rising wages and benefits, which represent 58-percent of the town budget, and has discussed the issue at several of its meetings this year. This week members approved a letter making recommendations to the selectmen drafted by Chairman Dick Hickok, which echoed a similar letter sent a year ago.

Last year the committee recommended several changes to the compensation structure and benefits package, including linking annual pay raises to those awarded by the private sector, adjusting pay scales instead of paying COLAs and eliminating lump sum payments to employees at the top grade of their scale. Above all, the committee objected to the practice of including sufficient funds in the budget to award a merit raise of 2.5-percent to most, if not all, employees in addition to the COLA.

Although the selectmen declined to act on most of the Budget Committee's suggestions, they did revamp the process of evaluating employees' performance and awarding merit pay in the 2006 budget cycle. Under the old system, employees deemed "competent" received a 2.5-percent merit raise on the anniversary of their hire.

Last summer, the board adopted a more rigorous performance evaluation process designed by Town Administrator Evans Juris, Finance Director Debra Shackett and the department heads. It rates employees as "competent," "exceeds expectations" and "exceptional." Only those rated "exceptional" will receive the maximum performance raise while those who "exceed expectations" will get 75-percent and those found "competent" half. Employees judged "below standards" or "unsatisfactory" will not receive a performance raise. Although the maximum performance raise in the 2006 budget is 2.5-percent, the selectmen proposed appropriating only enough funds to pay an average raise of 2-percent.

While applauding the selectmen for revising the system of merit raises, the committee pointed out that the COLA of 3.4-percent and average performance raise of 2-percent amounted to a 5.4 percent increase in the payroll, a rate of increase that would double salaries in 13 years.

To slow the escalating payroll, the committee recommended two measures. First, it proposed awarding the performance raise as a bonus payment that would not be incorporated in the employees' base pay to be compounded in future years. Second, it proposed calculating the COLA by averaging the Consumer Price Index (CPI) over six months or a year rather than applying one month's CPI.