Thursday, November 03, 2011

Wes Gullett calls for major reform to employee compensation

Would end annual pay increases and cut back number of days off

PHOENIX – In his continuing effort to protect city taxpayers and end abuses at City Hall, Mayoral candidate Wes Gullett unveiled plans today to make major reforms to how city employees are compensated.

Under Gullett’s plan, city employees would no longer receive automatic annual pay increases. Gullett’s plan would treat pay raises as an incentive for performance, rather than an entitlement.

“None of these reforms will be easy, but the resulting savings to the taxpayers will enable us to reduce the cost of government at the City of Phoenix,” Gullett said. “City employees will also be rewarded for their hard work, which will improve morale and increase productivity.”

The 2011-2012 budget included pay increases for 89 percent of city employees, at a cost of $28 million. In some years (for example, 2009-10), almost 100 percent of employees received a pay increase.

Gullett’s plan includes:

1. Limit annual pay increases for city employees, treating pay raises as an incentive for performance, rather than an entitlement.

2. Scale back overly generous benefits enjoyed by some employees, including:

  •  Suspend the non-matched deferred-compensation plan (also known as the City's second pension plan).

  • Reduce the number of days off that starting employees receive (currently 40.5).

  • Revamp the health insurance offering for city employees, ensuring there are affordable options, but requiring employees to pay more for premium coverage increases.

  • Change the tuition reimbursement program from an entitlement to an opportunity for eligible employees who commit to a minimum of two years of city service.

  • Eliminate the communications allowance, replacing it with a citywide telecommunications contract with pooled minutes.

  • Online checkbook to make city spending transparent to the public.

Fact check: Employee compensation

  • In 2009, the average city employee (not including police and fire) made almost $54,000 a year, compared to the average state employee who made less than $46,000 a year; and as compared to the private sector in Arizona, where the average salary was $42,000 a year.

  • Every year, employees are eligible for a step-pay increase; and then longevity pay once an employee reaches the top step.

  • The 2011-12 budget included pay increases for 89% of employees, at a cost of $28 million. In some years (for example 2009-10), almost 100% of employees received a pay increase.

Fact check: Employee benefits

  • The city covers 80% of health benefits and 100% of dental costs for city employees.

  • Last year, there were over 10,000 workers enrolled in a 401(a) deferred-compensation plan that is similar to a 401(k) plan in the private sector, which we estimate will cost the City almost $40 million this year. While eligible field and clerical staff only receive a small contribution (less than 1% of their salary), higher paid managers and executives receive as much as 9.6% of their salary contributed by the city into a plan; and no employee match is required.

  • Many employees receive Tuition Reimbursement – up to $7,794 a year.

  • Sick and annual leave carries from year to year, some of which is paid out to employees when they leave city employment, enabling them to "spike" their pensions. (The Gullett pension reform plan eliminates pension spiking.)

  • Many city employees receive communications and travel allowances.


Paid for by Wes Gullett for Phoenix
300 W. Clarendon Ave. Ste. 460
Phoenix, AZ 85013
(602) 345-1278 (main campaign phone)

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