City salary growth slows

Following huge payroll hikes since 2005, raises this year only 3.5 percent

KINGMAN - After salary increases last year that averaged higher than 9 percent between department heads, and following a $5.2 million or 52 percent payroll increase the last two years, the city has trimmed its compensation this fiscal year by awarding 3.5 percent increases across the board.

City Manager Paul Beecher was the only employee not to receive an increase following his evaluation in early June, when City Council decided that he would remain at his current salary of $149,148.

But the minimal salary hike, which is based on the cost of living adjustment and excludes merit increases for department heads, is not a matter of city staff failing to fulfill their duties, Beecher said. It's a matter of balancing the previous years' increases and adjusting for the current market.

"We're subject to the volatility of the economy, so therefore we have to be a little bit more conservative," he said from his office Friday. "To make a long story short, after the catch-up we did, now it's time to reflect back and do things more in line with what our abilities to pay are and what the economy is doing in Kingman.

"Basically, it's a leveling off from that catch-up period."

Department heads saw the highest increases in the last two years, so they were not awarded merit increases for the 2007-08 fiscal year. Lower-level city staff will receive the cost of living adjustment, and, according to Beecher, they also are eligible for the merit raises.

The city implemented a policy two years ago that adjusted city staff salaries to the 50th percentile to align with neighboring cities and the private sector. It was an effort to stay competitive and retain employees. But the local economy has a more significant effect on Kingman's spending than it does our neighbors, Bullhead City and Lake Havasu City, Beecher said.

"They have a more stable method of funding their operations than we do. They both have a property tax, and we don't have that, so we're subject to the volatility of the market."

Bullhead City has implemented a 3.3 percent cost of living adjustment this year on top of a 2.5 percent merit increase for department heads, according to the city's public information office, Steve Johnson.

Beecher said Friday that Lake Havasu City employees were given a 14 percent increase for this fiscal year, however the Miner was unable to confirm those numbers by the city. A public records request is pending.

The city's department heads understand the current market, the city's own financial situation and the reasons for "leveling off" the salaries this year, Beecher said. "They're very top performers, there's no question about that."

"The management team here in Kingman, they're an extremely cohesive group that works well together and understands all the issues that face the city," he said.

While some cities' department heads compete for additional funding during the budget season, "these guys don't do that," Beecher said. "We'll sit down collectively and discuss what the community's needs are, where the demands are for services, and to a person, we will agree and they will agree on what part of the operation will get the most money for the next year. So it's a very unselfish group of people who have a good feel for the community and a good feel for what the needs are."

The city budgeted for maximum merit increases and a 4.1 percent cost of living adjustment when planning the budget this spring.

But following a request by Vice Mayor Dave French to investigate the COLA, staff discovered a discrepancy between the government and private sector indexes used in the adjustment calculation. That discrepancy will save the city approximately $120,000, Beecher said.

Councilwoman Janet Watson also has called for an investigation. She asked that Council and staff review total payroll and salaries expenses, but a date for that meeting has not yet been set.