shire-wages-too-highAre our council officers too well paid and is our council well equipped to intervene when it comes to the burgeoning impact of wages on the shire’s budget? m112114

SOUTH Gippsland Shire’s CEO, Tim Tamlin, is on a salary of $233,080 a year.

His counterpart at Bass Coast, Paul Buckley, is on similar money.

That’s just under half, for example, what the Prime Minister gets paid.

But it compares favourably with the Federal Member for McMillan’s base salary of $195,130, although Russell Broadbent also gets the benefit of generous living away from home, travel and other allowances.

Locally, though, it would be on a par with the top corporate salaries, such as those paid to our local milk factory heads.

But is $233,080 too much to be paying a shire CEO?

And is the projected increase in shire salaries overall, of almost $1 million this year, to $22.2 million, too high?

If you think it’s too much, you only have until Wednesday next week, May 28, to make a submission to the South Gippsland Shire’s 2014-15 Budget which details expenditures of $46.3 million, not including $10.8m depreciation.

As far as Bass Coast is concerned, residents there will have to wait until mid-way through June to see their shire’s budget for the first time.

This week, the Sentinel-Times went one-on-one with Mr Tamlin over the vexed issue of shire wage increases, as a component of the projected increase in rates of 5.5 per cent, asking how they compare with those of the private sector and what can be done to contain increases.

Mr Tamlin was full and frank with his responses but also asked that we take into account the breadth of the community’s service demands as well as the legislative and risk management requirements on Council which to a great extent dictates staffing requirements.

By way of background, the budget estimates that staffing levels at South Gippsland Shire will remain at the full-time equivalent of 261.49, an increase of five staff members over the previous year, principally because the shire brought some caravan park management (6.6 FTE) in house.

Staff wages overall went up from $21.2m by $918,000 to $22.1m and will hit almost $42m by 2028-29.

Here’s what we asked the CEO

SOUTH Gippsland Shire CEO, Tim Tamlin makes a full and frank response to questions about the constant increases in staff wages, up well ahead of inflation this year by almost $1 million.

This is what we asked the CEO:

Q. Do you benchmark your overall wages’ bill and staff numbers (261.49 FTE) against those of similar shires? If so, how do you compare; more efficient or less efficient? (I appreciate that use of contractors by other shires could make comparisons difficult).

A.Council recently participated in a benchmarking exercise comparing many Council’s structures and service levels. This was run by Bass Coast Shire Council. From a preliminary viewing, we were placed within the average level for expenditure and staffing numbers.

In discussions I have had with my Gippsland regional counterparts, I believe South Gippsland may be the lowest staffed both in FTE numbers and in staff wages. This may also apply to our total revenue and expenditure and possibly lowest amount of income from rates. You may need to check with other Gippsland Councils to confirm.

This information perhaps is not as relevant due to the diversity in municipal service requirements, population, amount of infrastructure and the organisations’ structures.

As you have stated, it is difficult to compare Councils when they use contractors. It is one of the points we have raised when explaining staffing numbers to our ratepayers. We manage many services ‘in-house’ where appropriate, which may save on overall expenditure. Some staff numbers are therefore higher, but they then reduce the overall cost or level of risk to the organisation if otherwise outsourced.

Examples include the operation of the Koonwarra land fill, our depot operations involving parks and gardens, roads maintenance and more recently, Caravan Parks. To outsource them as some other Councils do, would either cost more initially or increase the risk and compliance requirements to Council and therefore our ratepayers.

Some of these operations also provide us with the ability to recoup some of the costs through income we would not have otherwise had access to, such as Caravan Parks. Outsourcing and contracting out does not always allow this to be possible.

Are temporary staff numbers included in the overall end of year or budget figures?

Yes they are.

The rise in employee costs is listed as 4.3% in 2014-15 but this includes an additional 4.66 staff members. What is a fairer number for the increase in existing salaries and wages (what’s in the EBA)? How can this be justified when the CPI is 2.9%?

4.3% is the difference between forecast actual employee costs for 2013/14 and budgeted employee costs for 2014/15. The vast majority of existing staff will receive an annual EBA 4.0% increase. The EBA is a legally binding document agreement for four years.

I understand SGSC negotiates an EBA with its employees. When was the last one and when is the next one due?

As previously stated, the EBA is a legally binding document agreement for four years with the current EBA due to expire 30 June 2016. The EBA will be reviewed at the appropriate time.

What EBA increases are built in for the years ahead (% increases)?

4% increase or $40, whichever is greater.

Can you provide a pay scale for the shire’s bands? How do they relate to the ‘Local Government Industry Award 2010’ levels?

We apply the Local Government Industry Award that is used by Victorian Councils.  Variations apply based on individual EBA’s.

Does the present EBA provide an automatic path to a higher band provided that requirements are met? Is this overly generous?

No, there is no automatic path between one Band and the next Band above it, e.g. between Band 6 and Band 7.

A change in Band level occurs when the organisation’s needs change and impact the specific job. Please note that this moves in both directions and can at times result in a decrease in band level. A progression within the Band e.g. 6A to 6B is based on performance and skill development.

It is never automatic. There is a majority of four levels within a Band. Once staff reach the top of a Band, they remain at that level unless a role review with increased responsibilities is required by the organisation.

I notice that some shire staff members are offered an RDO each fortnight. Are they still required to do an average of 38 hours-a-week?

Staff on RDOs are still required to work a 76 hour fortnight. They work extra hours in the nine days to make the time up to take a rostered day off. They receive four weeks annual leave per year. Council is committed to ensuring the service levels to the community are factored into any arrangements with regards to an RDO.

There is an impression in the community that shire staff members get significantly higher pay for the same duties as those in the private sector. In fact private sector employers tell me they have lost staff to equivalent shire jobs as the pay is higher and the work easier. For example, the Bass Coast Shire Council recently advertised for a ‘Horticultural Team Member’, offering between $25.98 to $27.81 per hour (Perm FT rate) plus super. A gardening firm in the area pays $22 to $23 an hour for employees doing the same work. Are shire staff rates of pay unreasonably high when compared with those in the rest of the country community? Is this taken into account when negotiating an EBA?

Council provides Industry Award wages in accordance with the EBA agreement.  I have not personally been involved in a comparison of private sector rates of pay with local government sector rates of pay.

I notice that the permanent full time staff of six in the CEO’s office account for an expenditure of $800,000 (budget page 50). How much of this is salaries? Does this include the CEO’s salary?

Yes, this includes the CEO’s salary, along with the People and Culture Department (which has recently commenced reporting to the CEO) and Executive Office Support staff. This accounts for 11.7 EFT positions.

What is the CEO’s salary? How does it compare with what is paid to CEOs at similar municipalities?

My salary is $233,080. You would need to check with other municipalities regarding their CEO salaries.

What are the shire directors paid? How does this compare to directors at similar municipalities?

The Director salaries are $166,641. Once again, you would need to check with other municipalities regarding their Director salaries.

The shire’s wages are projected to go up by roughly $1 million a year, reaching almost $42 million in 2028-29 (page 135). What is being done to contain this increase?

A rolling program of service reviews will inform the best way to deliver services and thereby determine staffing requirements. This work will be overseen by Council’s Financial Sustainability Committee.