County Pay Increase Not as Clear Cut as Officials Explained

BRADENTON – In a special meeting on February 1, Manatee County Administrator Scott Hopes explained to the public and the board details related to an across-the-board 3.9 percent wage increase given to county employees. Questions about how the increase was calculated, and whether the county administrator himself should have received the salary increase, were raised in TBT reporting on January 30. While additional details were provided, conflicting information still appeared between the budget language, the county administrator’s explanation, public records, and information TBThad received from the county.

Commissioner Misty Servia requested clarification during commissioner comments at the end of the meeting on Tuesday, expressing a desire to have the matter clarified for the public and the board. Additionally, she sought to bring specific clarity to the question of whether or not such a wage increase would be one the county administrator–a contracted employee–should qualify for within the terms of his contract.

Included in the budget message for the Fiscal Year 2022 (FY22) were two sections that described employee compensation adjustments. In the first section, titled Pay for Performance (PFP), the budget described, "FY22 Recommended Budget reflects a 1 percent increase to address employee compensation," and "Board of County Commissioner employees will participate in the Pay for Performance (PFP) program."In an additional section–one that is unique to this year’s adopted budget–titled Minimum Wage Requirements, the budget described a related "pay level" adjustment of 2.9 percent.

On Thursday, January 27, TBT reached out to Deputy County Administrator and Chief Financial Officer Jan Brewer via email for confirmation of our basic understanding of the FY22 budget language. Our inquiry sought confirmation that "1 percent is what the county approved as the market adjustment and PFP and the 2.9 percent is of a separate category related only to the goal of adjusting employee compensation to meet the minimum wage requirement passed in 2020 of $15 per hour?" We also inquired as to the total cost of the wage increases. We had not received a response by the time of last Sunday’s reporting.

The Monday following our story (January 31),TBTreceived answers to our emailed questions. Brewer wrote, "The 2.9 percent is the first stage of moving closer to the $15 per hour minimum as explained in the message. The 1 percent was toward the PFP and was later initiated that in reviewing the PFP that all employees through the COVID efforts would receive the maximum of 1 percent available for the PFP."

During his explanation in Tuesday’s special meeting on February 1, Hopes appeared to contradict–or disagree–with defining the salary percentage increases as either "PFP" or a "minimum wage increase."

"All employees got a 3.9 percent increase based on the cost of living," Hopes said. "The contract paragraph that ties the administrator’s cost of living increase–or whenever there is an across-the-board pay increase–that paragraph is exactly the same as it’s been for 20 years," he elaborated to explain his qualification for the salary increase.

Hopes explained that based on a market index of 5.9 percent, the county was able to "come up with" enough money for a 3.9 percent increase. He described that in considering prior years’ trends of utilizing a recommended percentage for PFP and a percentage for a cost-of-living increase that it was determined by himself–in consult with Human Resources and the CFO–that due to COVID, there would be only one flat across-the-board 3.9 percent increase given to all employees.

"Given the fact that we had the COVID situation, and the cost of living was at 5.9 percent, and we could build in enough for 3.9 percent, the decision was made by me in consultation with the finance team and the director of HR that we gave every employee a flat 3.9 (percent) increase," Hopes said.

Hopes further explained that he made the decision that the county should forgo any PFP merit-based increase in the fiscal year–as has been standard practice within the county for more than a decade. He described a process of salary increases that included adjustments to the pay scales' minimum and maximum ranges, and a salary increase to every employee whose wage was not increased by those adjustments. His position against any merit increase was that given the rate of inflation and the pandemic, employee compensation should not be tied to performance reviews.

After hearing the administrator’s explanation for the increase, Commissioner Servia repeated back what she understood of Hopes’ explanation, stating, "So, the 3.9 percent is a cost-of-living increase. It has nothing to do with the minimum wage that is impending upon us?"

Hopes responded, "Changing the pay ranges for jobs, that took care of some of it. The 3.9 percent adjusted it by the cost of living, but we still have a ways to go."

"I just want to understand," Servia repeated. "3.9 percent was a cost-of-living adjustment–period?"

"Everybody got a pay increase," Hopes answered. "It had nothing to do with the minimum wage, and I don’t know who floated that out there. There was discussion (about minimum wage) because we have to get there, but we didn’t even come close to that." He reiterated that the decision made for salary increases that were non-performance based was verified with HR. Hopes continued, "Everyone got a 3.9 percent increase, which in essence, was a cost-of-living increase."

Brewer also provided an explanation in Tuesday’s meeting. She described how at the start of the budget process the budget message did include 2.9 percent to "move up the scales for the minimum wage" but that, ultimately, all the pay scales and all the wages were adjusted through the effort to meet the minimum wage requirement. She also explained how not doing so could have run a risk of creating salary compression. "I know it seems simple to just move the bottom, but that causes compression. We’ve been fighting compression for years," Brewer said.

In reviewing past years’ adopted budgets, TBT was able to confirm several years of funding were applied to fight a salary compression issue as Brewer described. In brief, salary compression is when there is little difference in pay between employees, despite differences in things like qualifications, experience, performance, seniority, or tenure. Pay compression is the result of the market rate for a given job outpacing other increases historically given by an organization to its tenured employees.

From FY17 through FY20, the county applied $500,000 a year toward addressing compression issues that were identified through salary analysis. In total, approximately $3 million was invested to address the issue. Pay scales were adjusted and some employee pay rates were adjusted through the phased process. In FY21, the budget message described a supplement follow-up analysis that determined that compression had been adequately addressed, and FY20 was the last year the $500,000 was needed to correct the issue. By the end of the phased process, all full-time county employees were receiving at least $10 an hour.

As of the September 14, 2021 FY22 budget adoption, there were 2,004 employees budgeted under the Board of County Commissioners, and none of them were receiving less than the September 2021 $10-per-hour minimum wage requirement. Of the 1,807 BOCC employees–this figure does not include employees whose wage increased with the pay level adjustments described in the budget–who received the across-the-board 3.9 percent wage increase in October, approximately 9 percent were making less than $15 an hour.

For perspective, an employee who was making $10.21 an hour prior to the 3.9 percent bump, saw their hourly pay rise to $10.51 per hour. Approximately 21 percent of BCC employees who received the salary increase were making $30 an hour or more prior to the increase.

On September 30, 2021, the Florida minimum wage requirement was increased to $10 per hour. Florida’s phased implementation of the voter-passed 2020 minimum wage increase contains five incremental increases of $1 per year until arriving at the initiative’s $15 per hour requirement on September 30, 2026.

In her emailed answers to TBT on Monday, Deputy Brewer wrote, "The 2.9 percent is the first stage of moving closer to the $15 per hour minimum as explained in the message." But after reviewing the budget message, the budget message video from the administrator, and the public meetings related to the budget, TBT was unable to find any details of a phased plan to address the minimum wage requirement–or determine that there was one. In a follow-up email, TBT requested records of any memo, outline, flowchart, or otherwise, that detailed the plan and its projected phases and cost. The county has not yet responded to our request.

Within the administrator’s budget video message that was presented before the board on June 9, there appears only one reference to salary increases and those are in relation to the Manatee County Sheriff’s Office. The video message says, "The Sheriff’s salaries have been increased 2.9 percent for the minimum wage increase and 1 percent for performance pay increase." The video goes on to add, "Total increase to existing salaries is $5.1 million."

It sounds as though, by the administrator’s description, that $5.1 million is the total cost of salary increases to the constitutional office of the Sheriff. However, included in her email to TBT on January 31, CFO Brewer shared that the cost of the 3.9 percent salary increase to BCC employees was $5,380,501–$1,379,616 for the 1 percent and $4,000,885 for the 2.9 percent. For the constitutional offices, the county spent another $3,293,622–$844,519 for the 1 percent and $2,449,103 for the 2.9 percent. Altogether, the across-the-board wage increase of 3.9 percent to all county employees totaled more than $8.5 million.

It is hard to say what the administrator’s budget video message was referring to when it said $5.1 million for salary increases. The Sheriff’s Office is one of five county constitutional offices, and the total spent among constitutional office salary increases as provided by Brewer was less than the $5.1 million quoted by the administrator. Though, the cost of raising the wages of only BOCC categorized employees according to Brewer, did come close to the video’s referenced $5.1 million.

Despite the lack of consensus on how to correctly label–or classify–Manatee County’s 3.9 percent wage increase, the multiple references to the minimum wage requirement inspired me to examine other regional counties’ FY22 budgets. Utilizing keyword searches and referring to budget messages, I looked for whether the minimum wage requirement impacted budget recommendations. I reviewed Pinellas, Sarasota, Collier, Hillsborough, and Pasco counties. After reviewing the budget language related to employee salaries, PFP, cost-of-living (COLA), and the minimum wage requirement, I reached out to the counties by phone to seek confirmation of my understanding. What I learned was that of the five central west coast counties I looked at, only one included wage adjustments that were directly related to the minimum wage requirement.

Sarasota, Pinellas, Hillsborough, and Pasco had no recommendations in their budgets related to salary increases due to the minimum wage requirement. Officials I spoke to in Sarasota, Pinellas, and Hillsborough told me that there was no need to include any increase in their budgets because none of their employees were receiving less than the September 2021 minimum wage requirement of $10.

An official in Hillsborough offered that a low percentage of their employees were below the future requirement of $15 per hour, but assessments would be done to determine whether any future increases might be necessary for employees who are still below the $15 requirement as the 2026 deadline draws nearer.

Sarasota similarly included a caveat, explaining that while they did not include minimum wage requirement inspired salary increases in FY22, future budgets may include recommendations after assessment of salaries are reviewed. A Pinellas official in the budget and management department–who declined to comment publicly–suggested that if his county were to consider adjustments in future budgets, they would most likely not impact all employees, but be targeted to those who are lower-pay. When I shared that Manatee County had opted for an across-the-board increase of 2.9 percent–after a pause–he replied, "Are you sure? Not only to hourly workers?" When I confirmed that I was certain, the official expressed confusion stating, "That seems odd." The official then acknowledged their lack of personal insight into Manatee County’s specific situation.

Of the counties I examined, only one included salary increases because of the voter-passed minimum wage increase. A Collier County official I spoke to explained that Collier did need to address employees who were in non-compliance with the minimum wage requirement, and further explained that a market-rate assessment had shown the county's pay was not competitive. The official stated compensation increases related to minimum wage impacted only the lower pay scale employees. She added that salary workers did not qualify to receive an increase due to the minimum wage requirement, only hourly employees were considered. Collier also adjusted pay levels of lower position brackets. Additionally, Collier’s adopted budget included a cost-of-living (COLA) base pay adjustment equal to $1,000 across all pay classifications. The COLA adjustment represented a 1.7 percent increase to the average salary.

I followed up via email with Manatee County to confirm that each of their pay scales was adjusted to accommodate the countywide increase of 3.9 percent. In response, the county provided a link to an "unlisted" YouTube video dated September 24, 2021. An "unlisted" video is one that does not appear on a YouTube user’s channel publicly, but that can be viewed by anyone who has been provided the URL link. The video was titled Dr. Scott Hopes- Wage Increase Announcement.

"I'd like to deliver an update regarding our plan for employee compensation that was approved by the county commission as part of the fiscal 2021-22 budget," Hopes said in the message addressed to employees. He went on to describe challenges seen during his six months as the county administrator, including Piney Point and COVID. While reference to COVID was included in the September 24 video message to employees, there is no publicly accessible explanation of COVID impacting recommended wage increases within Manatee County Government.

"Because of the incredible year that just passed, we will forgo performance-based pay compensation in favor of an across-the-board salary and wage increase of 3.9 percent for all county employees," the administrator said addressing employees. "We will also increase all non-bargained pay range minimums and maximums by 3.9 percent. Employees who have already received a pay range increase will not see the additional 3.9 increase if they are at the new maximum."

In his message, Hopes refers to the increase as a "wage increase" or "salary increase," but does not label the increase a "cost-of-living increase"–or as related to the cost of living– as he categorized it in the special meeting on February 1. There is also no mention in the announcement video about the minimum wage requirement, as described in the budget or referenced by Deputy Brewer in her email to TBT and in her comments to the board on February 1.

As TBT reported last Sunday, the administrator’s contract contains specific language related to how a salary increase can be applied to his position. Under Section III Compensation/Base Salary line 2 of the employment contract, "To the extent the BOARD approves a general (cost of living) salary increase in any given budget year, the ADMINISTRATOR'S base annual salary will increase at the same time and at the same percentage rate as other county employees in his or her same pay class and service length. The ADMINISTRATOR is not eligible for any merit pay or bonus not provided for herein unless expressly approved by the BOARD."

In her email, Brewer wrote, "The 1 percent was toward the PFP and was later initiated that in reviewing the PFP that all employees through the COVID efforts would receive the maximum of 1 percent available." Aside from the video announcement made available to employees, there are no details within the budget message, presentation video to the board, or public hearings which explained the intended deviation from PFP to become a combined 1 percent PFP with a 2.9 percent across-the-board minimum wage salary increase–as opposed to pay level increases as described in the budget. The revision would provide all employees with a 3.9 percent salary increase. While constitutional offices received funding to provide their employees a combined 3.9 percent wage increase as the BOCC would undertake for their employees, constitutional offices are charged with making their own decisions as to how they utilized the salary increase funding. A constitutional office would retain the option to continue with a PFP program if they wished, regardless of the BOCC forgoing theirs.

PFP is a merit-based system of salary increases or bonuses. In general terms, PFP is targeted and does not apply as an across-the-board salary increase. Raises or one-time bonuses are determined by a review of employee performance and criteria. Of the employees identified for PFP, not all will receive the same increase or bonus each year. Which employees receive PFP, and how much they receive, is determined on a case-by-case basis following review.

According to Administrator Hopes’ contract, under Section III "COMPENSATION," in the last line of paragraph 3, the county administrator may be subject to a salary increase if approved by the board. "Based upon performance reviews, the administrator’s base annual salary may be adjusted by the Board."

In his comments during Tuesday’s special meeting, Commissioner Kruse expressed a positive opinion of the language included in the administrator’s contract. He told the board, "This is how a contract should be written."

"The only way we could have not given Hopes that raise–based on his contract–was to give nobody in this entire county a raise." Kruse declared.

Despite the emotive nature of Kruse’s argument on the topic, emotion does not equal accuracy. County employees are not encumbered by the county administrator’s contract. A county employee’s wage is neither dependent upon nor determined by whether the county administrator received a wage increase, or how much of an increase. Employees may receive bonuses, PFP increases, position or tenure-related increases, and salary adjustments due to pay level range increases. It is the county administrator–per his contract–that is not eligible for any salary increase that is not approved by the board, except for a cost-of-living increase that was issued to every employee. Changes to the pay levels would be unlikely to initiate an automatic adjustment to the administrator's salaryunlesshis or her salary was at the lowest end of their prior pay level's minimum.

"If you want to go around here and tell all these people that we are giving them a zero percent wage increase," Kruse argued while pointing his finger around the room, "then that’s your business. You go tell everybody that they get no money because that is how the administrator’s contract is written."

That interpretation, however, is incorrect–or disingenuous–as it ignores the actual terms of the administrator’s contract, as well as the fact that the majority of employees do not have a contract at all. The administrator and county attorney are the only contracted employees within the BOCC budget category.

Kruse also stated that the administrator is unable–per the terms of his contract–to negotiate with the board for a salary increase. However, it is clearly defined within his contract that through performance reviews–one completed by the administrator of his own performance, and one completed by each commissioner–Hopes would have the opportunity to negotiate a salary increase if he felt his job performance merited it. Whether he received an increase would be a decision made by a majority vote of the board.

Also relevant, not all employees saw their salary increase through the combined 1 percent PFP funds and 2.9 percent minimum wage increase initiated by the administrator. Hundreds of employees received their increase through the separate process of the structural change that was made to pay scale minimums and maximums the month prior.

PFP is a tool implemented by many organizations to help offset salary compression issues created by market-rate adjustment. When newer hires receive a salary similar to or higher than their tenured or more experienced colleagues in the same position, the use of a PFP program can aid in differentiating between different employee tenures, performance, and resumes. One argument in support of a PFP program is that when salaries are linked to the value of an employee and cost-of-living is linked to the market rate, all employees will see some adjustment to their salary, but valuable and incumbent employees might not see their newly hired colleagues receiving the same salary adjustment as themselves, a strategy that actually can help to combat potential compression.

The answers remain unclear. Should an administrator’s salary increase that was provided under these specific circumstances have come before the board for approval? Should decisions made by the administrator that deviated from the language of the approved and adopted FY22 budget have come before the board? When the administrator made the decision to deviate from the principles of PFP being merit-based–which is different from how the 1 percent was described in the budget message–and to deviate from the budget's described minimum wage adjustment to "pay levels" to instead become an across-the-board 2.9 percent employee salary increase, should these policy changes have come before the board for a vote before tax dollars were spent to initiate a 3.9 percent salary and pay scale increase to all county employees? Had the administrator not made the decision to deviate from the budget-approved 1 percent PFP and 2.9 percent minimum wage "pay level" increase, would he have qualified–per his contract–to receive any salary increase at all?

At least one commissioner in Tuesday’s meeting seemed to understand the murkiness of the situation.

"I will just say, that this seems like it was a policy decision," said Commissioner James Satcher. "Policy decisions usually come back before this board," he added. Satcher also thanked Servia for raising the discussion in Tuesday’s meeting, citing the importance of transparency.

Changes were made not only to how funding would be used and how salaries would be adjusted, but also to the labels applied to those adjustments. The budget details a PFP and minimum wage pay level increase, and the administrator budget message video presented to commissioners also referred to the 1 percent as PFP and 2.9 percent as a minimum wage increase–although the budget video only mentions both in relation to the Sheriff’s Office. Per his contract, Hopes does not qualify for any PFP increase recommended in the budget - at least, not if the PFP was merit-based, as intended. But he may qualify if the funds intended for PFP were utilized in a way that removed performance-merit from the equation, although, as Commissioner Satcher noted, that would seem like a policy decision that would come before the board.

A salary increase included in the budget, aside from a market rate adjustment (cost of living) recommended by the administrator, may also provide a gray area depending on what that adjustment is labeled. Based on his comments in Tuesday’s meeting, it would seem Hopes described that by combining the funds intended for PFP and funds intended to increase pay levels in response to a minimum wage increase–as the budget stated–it is acceptable to then label both as a combined "in-essence" cost of living adjustment.

In Tuesday’s special meeting, Hopes told the board, "As you recall, in the budget recommendation that was made to you, the cost-of-living index for 2022 is 5.9 percent." However, neither the budget nor budget video message included reference to a cost-of-living or 5.9 percent market index. Likewise, in the June 9 meeting, during which the budget message and related video were first presented to the commissioners, there was no explanation or information related to the market rate or 5.9 percent, nor did any specific detail arise in any other public hearing related to the budget. If the market rate was explained to the commissioners, and if the plan to forgo traditional PFP and apply those funds instead to a non-merit-based salary increase was explained, it would have had to have occurred within private meetings or discussions.

According to the administrator's budget message, on page 89 of the adopted F22 budget, "As in prior years, Board of County Commissioner employees will participate in the Pay for Performance (PFP) program."

If there was an explanation provided to the commissioners about the minimum wage requirement and the problem it created for the county, including recommendations by the administrator on how to address it, those conversations also would have had to have occurred separately from the written budget, video budget message, or public hearings. If there were no closed meetings or discussions where these details were provided to commissioners by the administration, then it is difficult to imagine that any of the commissioners could have been aware of the administrator's decision to not only enact "pay level increases" but also all-inclusive employee salary increases. Sometime between June 9 when the budget message was presented to the board and September 14 when the budget was adopted, a decision was made by the administrator to enact an across-the-board salary wage increase of 3.9 percent by combining the 1 percent for PFP and 2.9 percent for the minimum wage pay level increase–which was not included or explained in budget proposals, recommendations, or public hearings.

In the administrator's budget message, on page 89 of the adopted F22 budget, "In response to (the minimum wage requirement), Manatee is increasing pay levels by 2.9% to move toward the achievement of this overall goal."

There is a significant difference between "pay level" increases and "salary" increases. A salary increase is exactly what it sounds like. However, a pay level increase is an increase applied to the minimum and maximum pay ranges of job position levels. Historically, when pay level increases take place, some–but not all–employees will see an adjustment to their compensation. This happens because an employee who is receiving the lowest pay within their pay level would need to have their compensation adjusted to meet the newly set minimum. Additional employees may also see an adjustment to their compensation because some areas of inequity may be identified–such as what a tenured employee is paid vs a more recent hire of equal job position and pay level.

Had the administrator not made the executive decision to deviate from the budget-described 2.9 percent "pay level" increase to include an additional 2.9 percent salary increase, it is unlikely that his contracted salary would have increased through pay level adjustments alone because his pay level is above all others and his rate of pay was at the mid-point of his position's pay range.

What seems to be clear is that deviation from the intended purpose of PFP, the influence of COVID and market index on the decision to forgo PFP, the impacts of the minimum wage to pay scales and wages, and the intended 3.9 percent combined across-the-board salary increases related to those were not explained in detail in view of the public, which was what led TBT to report on the matter.

During his comments in Tuesday’s special meeting, Kruse said, "You hear all this stuff about a CEO of a company where they give 10 cent raises to the bottom and then they make an extra 10 million dollars on the top–this is not that way."

In Manatee County, the employees who were making the lowest full-time wage of $10 an hour saw a .39 cent increase in their hourly rate, or an $811 annual increase–with the exception of overtime, if applicable. The county administrator who was receiving $95.67, saw his salary increase equal to a $3.73 per hour adjustment, or a $7,761 annual increase to his base salary. An employee who was employed with the county for 10 years received the same percentage adjustment to their salary as the county administrator–and others–who had not yet worked for the county for even one year. This inequity between what one employee received vs another appeared across all pay scales to varying degrees, without any discernment applied to an employee’s tenure, performance, or merit. With the administration’s removal of PFP increases from the budget, there will be no opportunity over the coming year for any employee to be recognized or differentiated between a new hire or a less qualified or lower-performing employee.

While Commissioner Kruse is correct that the difference between 10 cents and $10 million is not equivalent to a difference of a few dollars, another difference between his analogy and the county’s across-the-board pay increase is that a corporation spends profits to increase salaries–whereas a government spends tax dollars.

Dawn Kitterman is a staff reporter for The Bradenton Times. She covers local government and entertainment news. She can be reached at dawn.kitterman@thebradentontimes.com.