OPINION | Goodwill COLA gesture exposes delicate relationship with Civil Service Board

Council gets second joint meeting August 7th

Some on council soften, recant support for higher COLA at recent budget meeting

Who really said what at the first joint Civil Service meeting?

Editorial

No good deed goes unpunished.

What started out as a noble gesture to the hard-working employees of the City of Mandeville — after decades where pay scale adjustments were few and far between — the City Council decided to put into law that a cost-of-living adjustment (COLA) would be part of the Mayor’s annually proposed budget.

This was on the heels of what many saw as a generous yet much-needed pay scale overhaul in 2022, where most city employees saw significant raises, which also baked in an annual COLA moving forward to be based on the Social Security Administration’s annual number. No one ever imagined that we’d see the 8.7 number that was announced this year due to inflation during the Biden administration. The Mandeville COLA mandate was later amended to give both the Municipal Employees Civil Service Board (MECSB) as well as the City more flexibility in negotiating a COLA at a joint meeting.

The only problem is, what happens when the two parties are seemingly a mile apart on their numbers?

That’s what we’re seeing play out now.

5.8 percent versus 2.7 percent

The Civil Service Board returned a recommendation of a 5.8-percent COLA for the upcoming fiscal year, but Mayor Clay Madden proposed only 2.7 percent, which some on the council seem fine with, by the way.

Others on the council, like Councilman at Large Rick Danielson and District II Councilman Dr. Skelly Kreller, sent mixed signals, advocating 5-percent and 4.5-percent COLAs respectively during the July 18th joint Civil Service Board meeting, but then during later City Council meetings they seemed to back off those prior statements made in front of the Civil Service Board members and moved toward advocating a second joint Civil Service Board meeting.

To be fair, Danielson did take care to surgically qualify his recommendation at the joint meeting, saying “but that’s going to be a budgeting thing.”

Kreller, however, did such an about-face during the special budget meeting just eight days later on July 26th — suggesting a pay freeze for 2024, cutting City-paid retirement system contributions, as well as a pay increase for the City Council — that Councilman at Large Jason Zuckerman expressed frustration at the contradiction.

As for Zuckerman, he had deferred offering a specific number during the July 18th joint Civil Service Board meeting, only saying that he wanted to wait until the council moved deeper into the budget review process, which is still going on as of this posting.

Mandeville Daily submitted a public records request for and received the audio recording of the July 18th joint Civil Service Board meeting. A transcript of key exchanges from that meeting as well as the City Council special budget meeting July 26th can be found at the end of this piece.

Overshooting the mark

It was during the July 26th special budget meeting that a consensus of resistance to the Civil Service Board’s 5.8 number began to materialize, not just from Kreller’s reversal.

Danielson, Zuckerman, Kreller, District III Councilwoman Jill McGuire, District I Councilwoman Rebecca Bush… they all peppered Finance Director Kathleen Sides with questions and scenarios during the meeting.

Zuckerman warned of the risk of “overshooting” the number by going too high, especially considering that the pay scale overhaul of 2022 — which established and paid a 5.9-percent COLA that first year after the new pay scale — was less than 18 months ago.

Most City of Mandeville employees, including police, saw anywhere between 10 and 40-percent raises, even without that first COLA of 5.9 percent.

Zuckerman drummed up enough support from his fellow council members at the July 27th regular meeting to ask the Civil Service Board if they’d be willing to meet to reconsider the COLA.

And now it would appear that Zuckerman has been granted his request with the second joint meeting scheduled for August 7th at 6 p.m.

The City has about $48.9 million in the bank, so to speak, (excluding enterprise fund) and even with a 5.8-percent COLA is projected to continue a trend of surpluses in the millions.

But Zuckerman and others on the council expressed that they are not worried about this year, per se, but rather what could happen over the next decade.

A COLA is not the same thing as a one-time bonus which would be based on how well the City did just this year. The COLA is a percentage and it is permanently added to an employee’s pay rate which then becomes their new pay rate.

When Zuckerman says they don’t want to “overshoot the mark” he is likely referring to the effects of payroll growth outpacing revenue growth and compensation for certain positions moving beyond their real-world marketplace valuations.

Not-so-subtle hint

What further complicates things is the unique relationship that Mandeville’s Civil Service Board has with the City of Mandeville compared to other cities in Louisiana. According to longtime Municipal Employees Civil Service Board member Jack B. McGuire, they have the authority to outright set the salaries for police, even though the City Council still has to vote to fund it.

During the July 18th joint Civil Service Board meeting he said, “So this board has the authority to set the salaries of the police officers who are covered by the police system and that is our sole authority subject to funding by the city council.”

McGuire then dropped a not-so-subtle hint to the City Council members in attendance about what could happen if they didn’t fund the request. He recounted the events of four years earlier when the Civil Service Board was asking for a 15-percent across-the-board increase when the City Council at that time initially only wanted to grant 3.5 percent.

“But thanks to a large number of city employees and police officers who attended some meetings then, the council eventually adopted 14.2 percent, which probably is the highest annual raise that we’ve ever had and that was made the same for non-employees and municipal employees,” McGuire said.

At the July 26th City Council special budget meeting, when council members asked what would happen if they refuse to fund the Civil Service Board’s 5.8-percent request, Human Resources Director Joanna Anderson — who is hired by the Mandeville Personnel Committee, which in turn is appointed by the Civil Service Board — echoed McGuire’s sentiment with only two words, “unfunded mandate.”

Apparently, the Louisiana Legislature saw fit to create an exception for Mandeville in 1984 when it comes to civil service boards. With Act 164, it supposedly granted the Mandeville Civil Service Board the authority to set police pay, but not regular civil service pay. There have been other acts by the Legislature in the intervening years to amend the original act.

As of this posting, Mandeville Daily has requested the full text and an opinion of Act 84-164 from multiple state sources, including the Law Library of Louisiana.

And none of the city officials in attendance at the City Council meeting that night could expound on the “unfunded mandate” explanation. Sides deferred to the legal department, which was not represented at the meeting.

Can the Civil Service Board give themselves raises to whatever they want and the City Council simply must fund it? Or… will the board be willing to come to an agreement August 7th on a COLA that the City Council feels more comfortable with?

We shall see August 7th at 6 p.m.

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Pull quotes:

Joint Civil Service Board meeting

July 18, 2023

Councilman at Large Rick Danielson:

29:48

“(O)ur number one asset is our employees, period. And when we did the salary survey, we made a major investment, we bit the bullet to do a catch-up that had not been done in a long time. What can we afford? What can we not afford?

“Me personally, I feel that 2.7 is too low. What’s the appropriate number? If I was going to pick a number, I’d say at least 5 percent, but that’s going to be a budgeting thing. That’s how I feel.

“I don’t know the perfect number, but I do think that 2.7 is too low.”

District II Councilman Dr. Skelly Kreller:

32:45

“The other thing too, and I agree with, um, Mr. Danielson, you know, when I was crunching the numbers, I thought we should have… I don’t think the city can afford an 8.7, but… the 2.7 figure is low, and I think we should be in the middle, and my number was about 4.5…

“Because what I think we need to consider is, along with that, the COLA, if it’s 4.5, and we give merit raise, OK, and let’s say this individual gets a 4… so that’s 8.7. That’s a nice number. Coming from a 2.7 and adding 4, that’s really, you know, I think kind of chintzy. So I would um, I’d like to meet little bit in the middle.”

Councilman at Large Jason Zuckerman:

48:00

“We want to pay highly competitive salaries and very good compensation packages so that we can retain, we can attract and retain.

“For me it comes down to what can we do and what’s reasonable. We’re just now getting into the budget process. … So I’m not ready to throw out a number yet that I can agree to. I think for me I need to get through much more of the budget process to decide what can we do.

“Certainly I’d like to do as much as we can. And I would certainly put it above other priorities to do as much as we can for our employees.”

District I Councilwoman Rebecca Bush: (did not speak)

District III Councilwoman Jill McGuire: (did not attend)

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City Council special budget meeting

July 26, 2023

Zuckerman attempts to gauge support for COLA

41:05

Zuckerman: “So those are my thought’s on it. I know Dr. Kreller, you were at the meeting, and Mr. Danielson, you were at the meeting, were pushing for a higher COLA than what was being presented [the 2.7 in Madden’s budget].”

41:18

Kreller: “I’m gonna correct that. I was not pushing for a higher COLA. What I was listening to was, Mr. McGuire wanted it much higher than the 5.8 and what Brian Burke said and what they decided was, let’s get an average, and they asked us. And so my number 4.9* but they, you know, recommended 5.8, and so that’s where we are. But… a recommendation to us. Now, at that point, I didn’t have the budget in my hand, and so we’re going to have to take all that into consideration. Uh, 5.8, 5.8, and this was Kathleen’s number, it would affect $698,000. And 2.7 is $325,000. Um. So I mean that’s a significant change. I’m open to anything. Personally, I think our employees make good money… with the merit raise and with their package, and a COLA 2.7, or 3.5, whatever it is, I think they’re making a real nice, nice salary, and I mean that’s competitive.”

Zuckerman: “I hear ya, and I agree with a lot of that… I do wish that you would have verbalized that at the Civil Service joint meeting. Because what I heard at the joint Civil Service meeting was, you were recommending a 4.9-percent* COLA and you were good with that, when they came back to us all and asked so if 4.9* percent is, just say, that’s fine, I think that’s overshooting the mark. I think we need to stay conservative with it considering everything we’ve done in the last 18 months, but 4.9* is what came out of Dr. Kreller at the meeting. The recommendation from the Civil Service board was 5.8, um, we have to decide, like you said, we have to decide what we’re going to do.”

Kreller: “Quite frankly I’m not sure where you’re going with that but I stand, you’re right, I said 4.9*. I was trying to break it, get an an average there because I knew what they were doing.

Zuckerman: “I’m just trying to figure out, trying to move the discussion along and figure out where everybody’s at on what they think the COLA should be, that’s all.”

*Kreller had actually proposed a 4.5-percent COLA at the July 18th joint Civil Service meeting and not the 4.9 percent that Kreller first mentioned in this exchange at the July 26th meeting. It would appear that once Kreller mentioned 4.9, both he and Zuckerman kept referring to that number instead of what Kreller had actually said.

Kreller floats salary freeze for 2024

1:03:05

Kreller: “With the salary survey we brought everybody up and they’re getting paid very nicely and now with this high COLA, now I’m talking about the 5.8, OK, let’s just say that. Can we think about a possible salary freeze for 2024? And put a freeze on the salaries?”

Joanna Anderson, Human Resources Director: “We have civil service rules that talk about merit increases and words they use are ‘shall.’ It’d be pretty hard to get around the merit increases.”

Bush: “I’m not sure I’m conformable with that.” (chuckles)

Kreller: “Several years ago, if I’m not mistaking, they froze the salaries in the City of Mandeville.”

Danielson: “I think it was only for the directors.”

Kreller: “It was the directors? OK. So… it seems like that’s a possibility.”

Bush: “Look, the good will we have attained in the past year, you just, that all goes down the drain.”

Kreller: “You think the good will that we’ve raised all these salaries? … For the directors. That level.”

Bush: “I mean I think you have to … continue to strive to be an employer of choice. I want to attract top directors as well.”

Kreller: “I’m just throwing this out. I ran a business for 38 years and I assure you, some of these increases, I would have never done that, because I could not even afford that. And we are getting to a point here we need to consider down the line.”

Kreller asks about a pay raise for council members

1:38:05

Kreller: “I do have one item. On page 7. The council meeting fees. I just noticed. Those have been the same.”

Danielson: “That’s your pay.”

Kreller: “I know it is. That’s where I’m going. OK? I’m thinking about that you know as a retiree. You know, maybe we should adjust that a little bit.”

McGuire: “Have fun with that one, Dr. Kreller. You’re on an island on your own, my friend.”

Kathleen Sides, Finance Director: “I think the ordinance says you can adjust it for the next council.”

Kreller: “I would rather do it, you know, prior to an election.”

Danielson: “Although it did actually increase about four years ago. It was $60,000 and went to $72,000 because it was $1,000 a month and it went to $1,200.”

Kreller suggests asking employees to start paying city-funded retirement

1:52:08

Kreller: “We have got to think about not paying the 100 percent… The employees are going to have to participate… That’s my feeling, OK. Because it is absolutely, it cannot be sustained. And I don’t think it’s going to go five years.”

1:52:30

Anderson: “So the city of Covington felt that way for a very long time and recently they have started paying the employee portion of retirement, and it was to retain their employees and to attract the best of the best. And they’re doing a good job since they’ve done that.”

Kreller: “But they just did that, not too long ago.”

Anderson: “They did, a few years ago.”

Kreller: “But in the private sector, the employee pays something. That’s it, you know. That’s how you survive as a business owner.”

1:52:10

Zuckerman: “I don’t think you can make a general statement like that… I just think you have to look at the total package. What your total compensation is… I think what’s important is the total compensation. If pay is less, benefits might be higher. If pay is high and you gotta pay your own benefits, that’s gotta be taken into account… People do those calculations… they do that math. They see what the value of benefits is.”

Kreller: “The cards are gonna come falling down and we’re going to have to do something drastic.”

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