Ocean Pines employees will likely be eligible for merit raises this year, following a lively debate on the subject during a public meeting last Friday.
While discussing the next fiscal-year budget, Vice President Cheryl Jacobs suggested that the current economic climate might make such raises dubious.
Director Tom Terry said he would “personally not support” removing all money for salary increases from the budget draft, and said he was certain Jacobs shared his view. Not so fast, she said.
“You shouldn’t put words into my mouth,” she said. “I had a concern, from the beginning of this process, about giving raises in [these] economic times.
“I understand that we need to allocate funds to keep our employees, and I understand that by putting this money there it doesn’t mean anybody gets a dime of it, but nobody can get anything unless the money is allocated,” Jacobs continued. “I had a concern about trying to keep the salaries at a level where they are currently, to just be fiscally responsible.”
Jacobs suggested salaries be frozen. As an alternative, Director Dave Stevens said the 2.6 percent across-the-board funding level in the latest budget draft could be reduced to, say, one percent.
“One percent isn’t going to be across the board, but it is going to be able to be distributed to high performers,” he said.
“That’s an alternative – make it less than three percent – or the alternative is, people could always come back and we could change the budget,” Jacobs said. “If there is a person who is deemed to require a merit increase … we have the ability to do that later.”
Stevens countered that General Manager Bob Thompson should have the flexibility to offer raises, in exceptional cases. Thompson agreed.
“This is an interesting discussion toward the end of the budget process,” he said. “I adamantly disagree with removing the [funding].”
Thompson pointed to several salary studies, saying the roughly three percent increase was not only appropriate, but also “probably a low number.” He also reminded the board that three percent was the number suggested by the directors in their budget guidance earlier this year, and added that raises would not be uniform, but would be based on the performance of each employee.
“There are people that may get zero or one percent in a given year, because their performance hasn’t been to the level we expect them to be,” he said.
Director Jack Collins said the last three budgets have included funding for across-the-board salary increases of 7.1 percent, 3.96 percent and 3.3 percent, respectively.
“I think, as an association, we’ve been very generous over that three-year period of time. I’m going to have to come down on Cheryl’s side,” he said. “We may be entering into some difficult, challenging times.”
Collins said the budget draft had $296,000 in payroll increases, including $124,000 for base salaries in fiscal year 2017 and an additional $38,000 for overtime.
“You can’t count overtime,” Thompson said. “Either that, or when the roads need to be plowed we don’t have to bring them in because I have to pay them overtime, or when a police officer has to go down to court, I can’t have them work later in the week on their regular duty, because I have to pay them overtime.
He went on to say Collins and others were assuming Ocean Pines employees were overpaid, which, he said, was not the case.
“You believe that our people aren’t paid enough to begin with – that’s separate from whether or not the economy says we ought to act different,” Jacobs said.
“Fair enough, but take home pay is take home pay for an employee,” Thompson said. “Cost of goods increases, so if we hold the line on our salaries their dollar amount that they get paid actually purchases fewer items – it purchases less, so it is, in effect, a decrease in their take-home salary.”
Thompson said the 2.6 percent increase was essentially a “cost-of-living” adjustment, and that the price of virtually everything outside of gasoline was going up.
“I absolutely believe what we’re putting forth isn’t only reasonable, it’s the low-end reasonable,” he said. “You’re telling me a gallon of milk, a loaf of bread, a box of Pampers – none of those things have increased in the last few years in cost?”
The other side of the argument, Stevens said, was that salary increases for the 81 full-time Ocean Pines workers would negatively affect the 8,452 homeowners in the community.
“Given the economy, I think Cheryl is right to consider a reduction,” Stevens said, adding that he was concerned with the continuous rise in payroll.
“When you do these systematic increases year over year over year, and you’re always raising the base of salaries over that period of time … you get the creeping salary issue,” he said. “What we’re talking about is slowing that curve.”
“I can’t hold more strongly on any item in this budget than to pay our people,” Thompson said. “I think the message that we’re sending … is just a miserable message to send our people right now.
Looking for a compromise, Terry asked for a consensus to keep the current payroll increase in place, with the caveat that a human resources study be performed before the next budget cycle.
Stevens and Collins appeared to disagree, but Jacobs acquiesced, leading to an unofficial 4-2 vote. Director Tom Herrick was not present during the meeting.
The directors will meet again to discuss the budget on Friday, Feb. 19 at 9 a.m. in the community center. The final budget vote is slated for Feb. 25.
While discussing the next fiscal-year budget, Vice President Cheryl Jacobs suggested that the current economic climate might make such raises dubious.
Director Tom Terry said he would “personally not support” removing all money for salary increases from the budget draft, and said he was certain Jacobs shared his view. Not so fast, she said.
“You shouldn’t put words into my mouth,” she said. “I had a concern, from the beginning of this process, about giving raises in [these] economic times.
“I understand that we need to allocate funds to keep our employees, and I understand that by putting this money there it doesn’t mean anybody gets a dime of it, but nobody can get anything unless the money is allocated,” Jacobs continued. “I had a concern about trying to keep the salaries at a level where they are currently, to just be fiscally responsible.”
Jacobs suggested salaries be frozen. As an alternative, Director Dave Stevens said the 2.6 percent across-the-board funding level in the latest budget draft could be reduced to, say, one percent.
“One percent isn’t going to be across the board, but it is going to be able to be distributed to high performers,” he said.
“That’s an alternative – make it less than three percent – or the alternative is, people could always come back and we could change the budget,” Jacobs said. “If there is a person who is deemed to require a merit increase … we have the ability to do that later.”
Stevens countered that General Manager Bob Thompson should have the flexibility to offer raises, in exceptional cases. Thompson agreed.
“This is an interesting discussion toward the end of the budget process,” he said. “I adamantly disagree with removing the [funding].”
Thompson pointed to several salary studies, saying the roughly three percent increase was not only appropriate, but also “probably a low number.” He also reminded the board that three percent was the number suggested by the directors in their budget guidance earlier this year, and added that raises would not be uniform, but would be based on the performance of each employee.
“There are people that may get zero or one percent in a given year, because their performance hasn’t been to the level we expect them to be,” he said.
Director Jack Collins said the last three budgets have included funding for across-the-board salary increases of 7.1 percent, 3.96 percent and 3.3 percent, respectively.
“I think, as an association, we’ve been very generous over that three-year period of time. I’m going to have to come down on Cheryl’s side,” he said. “We may be entering into some difficult, challenging times.”
Collins said the budget draft had $296,000 in payroll increases, including $124,000 for base salaries in fiscal year 2017 and an additional $38,000 for overtime.
“You can’t count overtime,” Thompson said. “Either that, or when the roads need to be plowed we don’t have to bring them in because I have to pay them overtime, or when a police officer has to go down to court, I can’t have them work later in the week on their regular duty, because I have to pay them overtime.
He went on to say Collins and others were assuming Ocean Pines employees were overpaid, which, he said, was not the case.
“You believe that our people aren’t paid enough to begin with – that’s separate from whether or not the economy says we ought to act different,” Jacobs said.
“Fair enough, but take home pay is take home pay for an employee,” Thompson said. “Cost of goods increases, so if we hold the line on our salaries their dollar amount that they get paid actually purchases fewer items – it purchases less, so it is, in effect, a decrease in their take-home salary.”
Thompson said the 2.6 percent increase was essentially a “cost-of-living” adjustment, and that the price of virtually everything outside of gasoline was going up.
“I absolutely believe what we’re putting forth isn’t only reasonable, it’s the low-end reasonable,” he said. “You’re telling me a gallon of milk, a loaf of bread, a box of Pampers – none of those things have increased in the last few years in cost?”
The other side of the argument, Stevens said, was that salary increases for the 81 full-time Ocean Pines workers would negatively affect the 8,452 homeowners in the community.
“Given the economy, I think Cheryl is right to consider a reduction,” Stevens said, adding that he was concerned with the continuous rise in payroll.
“When you do these systematic increases year over year over year, and you’re always raising the base of salaries over that period of time … you get the creeping salary issue,” he said. “What we’re talking about is slowing that curve.”
“I can’t hold more strongly on any item in this budget than to pay our people,” Thompson said. “I think the message that we’re sending … is just a miserable message to send our people right now.
Looking for a compromise, Terry asked for a consensus to keep the current payroll increase in place, with the caveat that a human resources study be performed before the next budget cycle.
Stevens and Collins appeared to disagree, but Jacobs acquiesced, leading to an unofficial 4-2 vote. Director Tom Herrick was not present during the meeting.
The directors will meet again to discuss the budget on Friday, Feb. 19 at 9 a.m. in the community center. The final budget vote is slated for Feb. 25.