Deschutes County is nearing the end of a contentious 19-month process to alter the pay structure of many of its approximately 1,000 employees, a change that would increase the county’s payroll by nearly $2 million.

Earlier this week, the Deschutes County Commission voted 2-1, with commissioner Phil Henderson as the sole dissenting vote, to adopt a salary structure that will elevate the county’s pay scale above the market average. Kathleen Hinman, director of the county’s human resources department, said the choice would increase the county’s payroll obligations to its 1,087 employees from $45.5 million to $47.2 million, a 3.7 percent increase.

“We wanted to create a compensation program that meets the needs of the organization,” Hinman said. “So (the county) attracts, rewards and retains the best employees.”

The new structure standardizes the county’s pay structure for union members and nonaffiliated employees. Advocates say it provides a way for the county to keep employees in a tight labor market. However, Henderson criticized aspects of the process, including the composition of the budget committee and the inclusion of private employees, and disagreed philosophically about how the county’s employees should be compensated going forward.

“I’m interested in getting fair wages and fair benefits for the county, but I don’t want these jobs to necessarily be above what other people in the communities of Deschutes County get paid,” Henderson said before Wednesday’s meeting.

The pay scale change draws on a classification and compensation study that was commissioned in spring 2016, according to Hinman. The study incorporated wage data from around 680 county employees and compared it with data from peer organizations, including Lane, Marion and Clackamas County, as well as the city of Bend. The study also pulled from private-sector job data provided by three research organizations.

The goals of the study were ensuring that county employees make competitive wages, as well as placing employees represented by the American Federation of State, County and Municipal Employees, a union for government employees, on the same schedule for annual pay increases as nonunionized employees.

Jared Kollen, a council rep for AFSCME, said the union, one of six the county negotiates with, represents about 420 employees at the county, from the health department to the juvenile community justice department.

In some cases, unionized and nonunionized workers cover comparable jobs for the county, Hinman added. “We want to make sure that they’re paid similarly, given that the essential duties are similar,” Hinman said.

Ultimately, the study found that the county’s compensation is near the middle of the pack. However, two of the county commissioners, Tammy Baney and Tony DeBone, expressed desire for the county to fall in the 75th percentile of the market, ensuring that the county stays competitive with other large employers in Central Oregon and across the state.

“There needs to be an adjustment to our compensation structure to meet that philosophy,” Hinman said.

Henderson said salaries and associated benefits for local government employees have risen significantly in recent years, which affected his decision not to sign off on an additional $1.7 million increase.

“Maybe that change doesn’t seem that high, except that we have this recession in the middle of it,” Henderson said.

Hinman said wages for full-time employees of Deschutes County have increased by just under 26 percent over the past 10 years. However, the trend isn’t limited to county employees. Overall, wages for local government employees working in the county — including those working for cities and other public employers — rose by 21.7 percent from 2007 to 2016, according to data provided by the Oregon Employment Department.

Hinman added that these wages are important in helping the county recruit quality employees and keep them around. The county recruits nationally for positions, especially high-level ones, and Hinman said employees often start at the county before their spouses have a job lined up in the area. Erik Kropp, deputy county administrator for Deschutes County, said the county’s high cost of housing adds another challenge.

“We recognize that we’re a high-cost-of-living, high-growth area,” Kropp said.

Kollen noted that several positions, including behavioral health specialists, make less than the market average, which can drive them to leave for other jobs in the area.

“I know we’re training behavioral health specialists for the private market,” Baney added during the meeting.

Still, Henderson said the county doesn’t need to compete with the high end of the private sector to be effective. He added that the county’s health benefits are more significant than what they could expect in the private sector, which gives the county an advantage in retaining employees, and renders the study’s comparison with salaries at private companies misleading. The commission ultimately voted not to incorporate data from the private sector when setting its pay scale.

“My experience and knowledge is that private sector doesn’t have as generous of retirement and health benefits as we do,” Henderson said.

Additionally, Henderson criticized the composition of the county’s steering team for the study, which didn’t include anyone from private businesses.

“I think it’s important that it’s not just fair to employees within the organization, but fair to members of the community, to taxpayers,” Henderson said.

Hinman said the county never looked at adding members of the private sector to its steering committee and did not comment on whether it would.

With a pay structure in place, Hinman said, human resources will let employees know their new designations and allow employees to appeal those designations. Ideally, the county hopes to get the new pay structure implemented by the start of January.

“It will be tight,” Hinman said.

— Reporter: 541-617-7818, shamway@bendbulletin.com

Editor’s note: This article has been clarified. The original version was not clear about how many employees would be affected.

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