JEFFERSONVILLE — As the Jeffersonville City Council has considered a salary study, pay increases and raises for unionized police officers and firefighters in the last few weeks, city records show that spending on employees’ salaries has increased by nearly 50 percent in the last few years.

The number of positions listed in the city’s salary ordinance has also swelled  by 71 during the same period: Going from 262 positions in 2005 to 333 positions in 2009.

In explaining the increase, Mayor Tom Galligan and other city officials point to the fact that Jeffersonville’s borders have expanded via annexation and a 2008 takeover of the city sewer plant, which had previously been operated by a private contractor.

Another update to the city’s salary ordinance — one that would increase annual payroll by $76,000 — may soon be back up for consideration in the next month. In the meantime, The Evening News has looked back at five years worth of salary ordinances and employee job pay summary reports generated by the Clerk-Treasurer’s office.

The job pay reports — which total up each employee’s base salary, longevity pay, overtime, certification pay and other compensation —  showed that total salaries went from $9.53 million in 2005 to $14.25 million in 2009.

In order to gauge the number of positions, the newspaper counted each title in the salary ordinance to conclude there were 333 city positions in 2009. Some employees staff multiple positions in the ordinance — for instance a deputy clerk might double as the city council’s stenographer —  so that doesn’t necessarily mean there are 333 employees.

When Galligan took office, he created numerous new positions, including a finance director, communications director, growth coordinator and others. Some of those positions were created as need arose, but a few were announced in December 2007, the month before he came to office.

TAKING THE SEWER PLANT

However, it was what happened a full year later, in December 2008, that contributed heavily to the growth of city government.

It was about then that Galligan, along with two police officers, took control of the city’s wastewater treatment plant from Environmental Management Corp., a company that had been contracted to run the plant a few years prior. About the same time, the council approved an update that added 21 employees to the salary ordinance to run the plant. A legal battle over the contract continues.

“What we did is rearrange where the money is going,” said Galligan, noting that EMC was being paid $1.4 million annually to operate the plant.

The employee job pay summaries showed that wastewater treatment plant salaries totaled up to about $1.33 million in 2009, the first full year of having a city-run sewer plant. However, that doesn’t include the insurance and benefits costs the city covers.

The plant takeover took place during a time when the city was negotiating with the U.S. Environmental Protection Agency about the need to eliminate combined storm water and sanitary sewer overflows. Galligan said the takeover of the sewer plant was a large part of that because “things we were supposed to get done, weren’t getting done because [EMC] didn’t have the staff.”

Galligan said a lack of maintenance and staff led to the takeover. Company attorneys argued during the subsequent trial that its staffing at the plant met contractual obligations. And EMC was awarded $584,111 in lost profits and attorney fees after the trial. The city is appealing.

“Without a question, we’re getting much more for our money,” said Council President Nathan Samuel, who said he’s toured the plant and seen some of the improvements that have taken place.

“Privatization doesn’t work well,” Galligan said, “because you can’t control your costs.”



MAJOR ANNEXATIONS

In addition to the plant takeover, city leaders look at major annexations as a contributor to the salary increase. A six-part annexation, containing about 7,800 acres north and east of the old city limits, was approved by the council in 2007.

About half of that came into the city in 2008. However, a legal challenge prevented the other half — called Area B, the most densely-populated area which includes Oak Park — from coming in until 2010.

In 2008, as the first part of the annexation was made official, the city began hiring more employees in order to implement services in the new parts of the city.

Galligan and Human Resources Director Kim Calabro noted that about 12 firefighters and six police officers were added to the staff to cover the initial part of the annexation. Now that Area B is coming on board, the city is hiring an additional 10 officers and three firefighters this year, the two noted.

There’s also four commercial drivers, two laborers, a mechanic, an assistant engineer, an assistant in the technology department, a full-time safety director and an electrical technician that have been added to the ordinance since annexation.

The new ordinance being considered by the council in the next month adds three more police dispatchers. Calabro said those are needed because police officers are being used to answer phones during busy hours — sometimes while they’re on overtime.



MAKING COMPARISONS

Salaries in the closest neighboring municipality, Clarksville, have seen increases as well, but only by about half as much as Jeffersonville. According to records from the town of Clarksville’s Clerk-Treasurer’s office, spending on salaries has increased by about 26 percent from 2005 to 2009 — going from $6.24 million in 2005 to $7.92 million in 2009.

Charlestown salaries have grown by about 24.20 percent, going from $1.64 million in 2005 to $2.04 million in 2009. Most of that growth has taken place during the last year or so, city records show.

Salary spending by the state of Indiana has increased by about 10 percent over the five years — growing from $2.91 billion in 2005 to $3.21 billion in 2009.

The growth in government occurs as other employment sectors are still recovering from job losses. The total number of jobs in Clark County has increased by about 2 percent — going from 46,398 in the last quarter of 2005 to 47,355 in the last quarter of 2009, according to the Indiana Business Research Center at IU’s Kelley School of Business. However, job growth in the county peaked in 2007 — meaning there were job losses in both of 2008 and 2009.

Manufacturing, warehousing and transportation, retail and construction sectors were among the hardest hit during that time, said Uric Dufrene, Sanders Chair at the School of Business at Indiana University Southeast. Corporate earnings have rebounded since the recession started but jobs haven’t followed, he noted. Unemployment in Metro Louisville was still at 9.8 percent in June, up only a 10th of a percentage point from a month earlier.

During the five year period being examined, average salaries for Clark County grew by about 9.5 percent, going from $621 per week in the final quarter of 2005 to $680 per week in the final quarter of 2009.



REACTION

Most of the Jeffersonville council members reached for this story said they weren’t surprised by the amount that city salary totals have grown.

“With annexation, of course there’s going to be more,” said Councilwoman Connie Sellers. “It’s more city to cover.”

Councilman Mike Smith said drainage — which cognates somewhat with the sewer plant takeover — and making sure annexation is done correctly are among his top issues.

“I’d just soon be prepared than run in like it’s a house fire,” Smith said of the annexation.

“I’m not surprised, I can see where the money has been spent,” said Councilman Ron Grooms. “It seems to be on a level not outside of my expectations.”

“I would say that’s high,” Samuel admitted. “However, there are very valid reasons for that” considering the annexation and plant takeover, he said.

“Adding employees may not be a bad thing,” Galligan said.

An engineering inspector is one of the new positions created in the most recent iteration of the salary ordinance. Galligan said the city can save by having an in-house engineer, as opposed to paying outside consultants to inspect sewer projects after completion.

And because the city is in the midst of numerous sewer upgrades, the mayor said the inspector will have plenty to do and can work on other projects for the city when not inspecting.

“We can have our own guy inspect,” he said, “ and save that money.”

City government is hiring at a time when Clark County government is struggling, recently laying off nearly 20 workers.

Sellers said the county is completely different from the city because there had been a mismanagement of funds there. Smith noted the council trimmed nearly $3 million out of its budget when it wasn’t receiving budget orders from the state on a timely basis.

“I know the county is laying off and the city is hiring, but it’s not apples to apples,” he said.

Galligan said if the city did face financial crisis and had to cut jobs, it would do so across the board and where it would make the most sense.

However, he believes the quality of city services would suffer as a result.

“You can’t say, ‘When we get some employees, I’ll pick up your garbage.’”



LOST COSTS

Putting a dollar figure on how much each employee winds up costing the city is a difficult task because there are so many variables between departments. Sanitation employees are given a uniform, for instance. Police and firefighters are given a clothing allowance. Police officers also have take-home vehicles to consider.

What can be counted but is not included in the job pay summaries is insurance costs. That adds up to between $6,038 and $13,698 per year per employee, depending on whether the employee has individual or family coverage.

Most also get Public Employee Retirement Fund, or PERF, benefits as well. Under that program, the city pays 9 percent of each employee’s salary into a fund for retirement. Parks employees have a better plan in which the city puts 10.5 percent of the annual employee’s salary into a retirement fund each year.

Under state statute, the city could require employees to pay up to 3 percent into the fund, but has always paid it for the employees.

Police and fire, which are unionized positions, have different retirement plans. The city pays 22.5 percent of each police officer’s and firefighter’s base pay — plus 20 years of longevity pay — into a retirement account. The police and firefighters pay three percent into the account as well.