The Ketchikan Gateway Borough Assembly is moving toward a work session on a borough employee compensation study that was completed in late 2019 but not acted upon because of the coronavirus pandemic.

At the end of Monday’s regular Assembly meeting, Assembly Member Jeremy Bynum said that he would be placing the work session on the agenda for the next meeting, which is scheduled for Aug. 2.

The Assembly’s interest in scheduling a work session on the existing compensation study followed its 5-2 vote on Monday against paying $46,500 for a consultant to update the study.

Assembly members who voted against funding an update were Bynum, David Landis, Judith McQuerry, AJ Pierce and Sven Westergard. Assembly members Austin Otis and Felix Wong voted in favor.

The existing compensation study was completed by the Gallagher Benefit Services consulting firm in 2019 at a cost of $65,000, and was presented to the Assembly during a January 2020 policy session.

For the compensation study, a borough staff committee selected 36 of the borough’s 70-plus job classifications to be compared with similar job classifications in other municipalities and government entities.

Gallagher Benefit Services obtained direct survey responses from the City of Ketchikan, Kodiak Island Borough and the City and Borough of Juneau. In addition, the consultant obtained data from “published survey sources” from the Ketchikan Indian Community, Ketchikan School District, City of Wasilla, City and Borough of Sitka, Kenai Peninsula Borough, City of Kodiak and the Municipality of Anchorage, according to Gallagher information.

“After collecting wage data, the contractor applied geographic differentials to account for differences in cost of labor between communities,” according to borough information published ahead of the Assembly’s policy session in January 2020. “Ultimately, Gallagher found that the Borough’s actual salaries were 29 percent lower than benchmark organizations. Borough midpoint salaries were 9.6 percent below market.”

Although salaries were lower, the consultant found that the borough’s health insurance benefits were “aligned with the market,” according to an agenda statement for the Assembly’s meeting of May 4, 2020.

Depending on which option might have been chosen to realign borough salaries, the annual cost to the borough would have been between $434,000 and $1.28 million, according to the Gallagher study.

Borough management had intended for the Assembly to consider adjusting salaries during the early 2020 budget preparation process for the 2021 fiscal year that began on July 1, 2020. However, the coronavirus pandemic changed that strategy.

“When the pandemic broke out, the implementation of the compensation plan was put on hold,” according to the agenda statement.

In May of 2020, the Assembly declined to approve a proposed 3% cost-of-living adjustment for all of the borough’s benefited regular employees and nonrepresented employees outside of the collective bargaining agreements that were already in place with four unions, in addition to the borough manager, clerk and attorney.

Later, in November, the Assembly approved a 3% COLA for nonrepresented benefited employees, retroactive to July 1, 2020. A pay increase for the borough manager was approved in recent weeks.

The proposal to update the 2019 compensation study was placed on the agenda for Monday’s meeting by Borough Finance Director Cynna Gubatayao. According to the agenda statement, the 2019 compensation study had proposed updating the comparison data every two to three years.

“Due to the delay caused by the pandemic, the plan needs to be updated at this time,” according to the agenda statement.

The proposed ordinance to approve funding for the compensation plan update included an unrelated item regarding a staffing issue in the Finance Department — and was amended further to potentially include funding for the borough mayor, two Assembly members and the borough manager to attend the Southeast Conference meeting In Haines next September. However, the Assembly voted 6-1 to consider the compensation study item separately from the finance and travel items.

In support of splitting the ordinance into two parts was Assembly Member Westergard, who indicated that the amount of interest in the topic warranted having an “in-depth conversation” about it.

After the vote, Westergard noted that there had been earlier conversation about expanding the number of job classifications that would be involved in the survey.

At the start of Monday’s meeting, the Assembly heard a public comment letter from Gavin Charrier, who requested that a study update consider all 70-plus borough job classifications rather than just the 36 benchmark classifications included in the original study.

Borough Human Resources Director Karolyn Ecklund described the staff committee that had selected the 36 “benchmark” positions.

“There was a small committee formed and the challenge that Gallagher has is getting participation,” Ecklund said. “ So the more benchmark positions you add and the more data you're trying to collect, the more difficult it is to get folks (other municipalities) to participate in a full survey. ... We had a difficult time with participation even with the 36.”

Borough Manager Ruben Duran later added that the cost of updating the study would increase if the other positions were added in.”

“It’ll increase the cost because they do more research,” said Duran, who had described that the original study had tried to get enough benchmark positions so “we know how to move the rest of them with it, without having to do with every position.”

From the number of the positions included in the study, the discussion turned to the goals of the compensation study.

“So our whole goal here,” Bynum said, “is to make sure that our employees are competitive so we can retain them and not have to have a lot of turnover, spend a lot of money and investment in training and then lose that to start it all over again, um, to pass the torch on from one employee to the next, those are all very important things that we absolutely should be doing without delay.”

The question that Bynum said he had was whether implementing the compensation study was something the borough could afford.

“I think that, based on looking at some of the numbers, I think it is something that we can afford to do, and not only can we afford to do it, we should be doing it,” Bynum said.

Westergard later asked Gubatayao whether it looked like the borough would have enough money to implement the recommendations in the 2019 study.

“Because if we don't have the money to implement even the 2019 rate and it goes up, then why are we going to waste the $44,000 to put it on the shelf, then dust it off two or three years down the road," Westergard said.

Gubatayao replied that it was difficult to answer with a “direct yes or no,” as the study contractor had presented a range of options going from roughly $300,000 to more than $1 million.

“I'm looking now at the cruise ships starting to come back; I can see the activity out in the community,” she said. “... So to my mind, it appears that we are now on our way back, back up and out of this. And the question about whether or not you can afford it. You know, if you're talking about maintaining the level of services that you have, and being able to continue to recruit and retain employees, then at some point you, you have to afford some level of that.”

Later, Duran cited the potential of being able to use the borough’s share of federal American Rescue Plan Act as revenue to fund government services from the borough’s general fund. If so, “the estimated FY 21 revenues will be approximately 99% on budget.

“As you recall, in January, February, we were looking at these millions of dollars deficit in our revenues,” Duran continued. “So some things have come back on our own, and then we've been able to offset costs with the CARES money first. And now we have this ($1.3 million). So we have shrunk that deficit.”

Bynum’s main point was that if the Assembly approved implementation of the existing compensation study now, the only thing to discuss further would be cost-of-living adjustments.

“All we would be talking about is cost of living, which last year we've seen deflation and this year we're seeing rapid inflation,” Bynum said. “So I was wondering if it's possible that we could get a little bit of an explanation on why we cannot just take the compensation study that we've spent many, many hours on and evaluate whether or not we can just implement it with the discussion of adjusting for cost of living.”

Duran said the study was developed in 2019 and, within the concept of revisiting it every two to three years, now would be the time to update it so it could be part of the planning for the 2023 fiscal year budget.

“We didn't want to hold off on the study until this time next year, because then we'd be four years out,” Duran said. “So when we go to the implementation, you're going to be stepping into another year, unless you do something more radical than that. ... So you can see where the lag time on this is our concern. Now, if as a body, you feel that the 2019 budget will be good for the (fiscal year 2023) budget, that's all we need to know.”

Landis said he understood Duran’s explanation, but that he was not willing to spend money on a compensation study that they already have, and can be adjusted easily.

“It seems to me that we have a brand new shiny study, and we're asking for another one and we haven't even used the one we’ve got,” Landis said.

Bynum later said that during the earlier discussions of employee compensation, the Assembly was looking at the potential of no cruise season for 2021.

“We were looking at the teeth of the pandemic and we were worried about laying people off,” he said. “And now what we're saying is that we see an improvement. I've heard discussions that in ... finances we're seeing a dramatic turn around in the sense of what we might have projected. And then we're sitting here talking about, well, how do we ensure that the borough employees are taken care of?”

He said the compensation study didn’t recommend that borough employees be the highest paid among the entities surveyed. Rather, the goal is to bring them up to the mid-point, which could be done through a budget amendment now.

“ I just would like to know what the impacts of addressing (this) sooner are. I don't know that I want to wait until January of next year for an implementation in July of next year to have that conversation.

“If our employees' well-being, both family and mental well-being, is of importance to us, bringing them up from, I think it was 27% under market to the 50 percentile is something we should be doing, especially after going through what we just went through for the last year,” Bynum said. “And I know money has to come from somewhere, but it shouldn't come at the expense of people providing needed services. If we don't want those services, you know, eliminate those services. But if, I'm going to have somebody, you know, providing wastewater treatment for me and, and animal control and planning and all of the other things that our borough is doing, we should be fair and equitable to the employees. So I just want to know what the consequences of not waiting are.”

In a lengthy response that included the aforementioned ARPA funds, Duran said the two questions were whether the Assembly wanted the compensation study to go forward and, if so, when it should be implemented.

“And that has to do with just revenue,” Duran said. “That's all that's holding us back.”

Bynum said later during the discussion that he would prefer to use the funding that was being requested to update the study to implement the existing study, instead.

“If we were to pass the 2019 (compensation) study and pick one of those options and pass it tonight, I would sleep with a good conscience, knowing that we're doing the best that we can, given our current circumstances, to take care of our employees,” Bynum said.

When it came time to vote on the proposed funding to update the study, Otos and Wong voted in favor; Bynum, Landis, Pierce, McQuerry and Westergard voted no.

The move to schedule a work session on the existing compensation study didn’t occur until the Assembly members’ comments period at the end of the meeting.

“Sorry to beat a dead horse,” Westergard said. “But I’d really like to see that compensation study in a work session or something to figure this out. I think we're getting the cart before the horse.”

Bynum agreed with Westergard, adding that the compensation study had been completed before Bynum had been elected to the Assembly.

“ I think a work session would reinvigorate us to understand exactly what that compensation study says, how it could be implemented and when it can be implemented,” Bynum said. “So I would strongly support staff to have a work session on the agenda for that.”

After some discussion of a four-hands Assembly direction, Bynum said he would request that a work session be placed on the Assembly agenda.