Q&A: City employee pay, benefits still a big issue

Pay and benefits for city employees are at the center of an ongoing debate in Anchorage.

Mayor Dan Sullivan's plan to take away some of the power of city unions -- and give the city administration tighter control of labor costs -- was approved by the Assembly in March, but the battle may not be over yet.

Now union leaders hope to undo the legislation with a referendum petition. The city attorney's office has twice rejected unions' attempt at writing a referendum petition, saying it doesn't meet legal requirements.

Now the petition backers say they will head to court to challenge the city attorney's opinions.

Meanwhile, city administrators and several unions are beginning a new round of contract negotiations that will be governed by the labor law rewrite.

Here is some basic information about city employees, unions, pay and benefits:

Q. How many people work for the city?

A. City officials provided a spreadsheet that showed everyone on the payroll in 2012. It was 3,200 people. The list includes the mayor, police officers, firefighters, trash collectors, lawyers, engineers, electrical workers, election workers, seasonal maintenance workers, lifeguards and more. The roll includes everyone on the city payroll in 2012; in cases where someone left and was replaced, both names are on the roll.

In 2010, a similar Daily News look at the annual city payroll found 4,116 people.

Q. How many of those on the payroll in 2012 were in unions?

A. Nearly three-fourths.

Of those not in unions, 566 were "unrepresented." This includes librarians, legal secretaries and clerks, accountants, police lieutenants, Municipal Light and Power superintendents and fire battalion chiefs. All of them were entitled to overtime.

Another non-union group is the 182 employees classified as executives -- department directors, attorneys, mayoral assistants and the like. They were not entitled to overtime.

Q. What's the average wage, benefit value and overtime for city employees?

A. For 2012, the average wage was about $72,000, average benefits were $35,500, and average overtime was $5,300, said city employee relations director Danielle Fegley. This adds up to a total average compensation of $112,800 a year.

Q. Who are the highest-paid city workers?

A. Municipal Light and Power employees held nine of the top 10 spots for 2012, with regular earnings and overtime combined. A police officer rounds out the top 10.

Other points about the top of the list:

• Highest regular pay: A senior engineer at Municipal Light and Power, Victor Yep, had the highest regular pay, at $159,244, according to city payroll records.

• Highest combined pay and overtime: ML&P foreman Robert Reese, at $249,489. His base rate was $140,123, and overtime, $109,366.

• Highest total compensation, including benefits: ML&P superintendent Victor Willis. His base was $128,255, overtime $95,210, benefits $79,567, and total compensation, $303,033. Most workers' benefits, including retirement contributions and health care, are significantly lower than Willis'.

Yep and Reese are members of the IBEW. Willis is not represented by a union but is not an "executive."

Q. What's the story behind ML&P overtime?

A. In 2012, ML&P had $868,000 more in overtime than the year before. Some of it was due to the fact that "hiring was delayed somewhat last summer, partly in order for the city to do due diligence with regard to cost containment, but also because of a lack of qualified applicants and the level of compensation offered," according to a written statement from Lindsey Whitt, the mayor's spokeswoman. ML&P employees worked overtime to meet construction deadlines, she said.

Also, $340,000 of ML&P's overtime in 2012 was due to the huge fall windstorm, Whitt said. Most ML&P customers lost power when all three of the utility's transmission lines were knocked out.

Q. What about the police officer in the top 10?

A. John Vandervalk, a detective in the sexual assault and crime scene unit, earned $119,327 in straight pay and $70,866 in overtime. His unit is regularly called out at night and weekends, and its officers have frequent court days, said police union president Derek Hsieh. Vandervalk makes himself available for call-outs, Hsieh said.

Q. The police department uses seniority to determine who works some of its overtime, particularly voluntary OT. Is that an issue with retirement pay? How many officers are in retirement programs where the highest years' pay and overtime count toward retirement pay levels?

A. We could not find a definitive answer to this question.

Hsieh says high-pay years count toward retirement for a diminishing number of police department employees. The most senior employees are in an old police and fire pension system where overtime doesn't count toward the rate of retirement pay. New employees have a 401(k) savings plan instead of a fixed benefit pension.

There is still a group of police department employees in Tiers 2 and 3 of the state Public Employees' Retirement System for whom high-pay years do count, Hsieh said. He said he did not know how many.

Q. What does a city wage include?

A. The base salary, any increases for education, pay for working a late or overnight shift, longevity or other bonus pay earned, specialty pay, standby pay and allowances for tools or clothing, Fegley said.

Also, city employees are allowed to cash out some of the leave they accumulate, and that can boost pay in a given year.

Q. Can you give an example of how someone's earnings are broken down?

A. Here's an example provided by Fegley for an average senior patrol officer in the police department:

Base Wage: $82,500

Base wage after adding pay enhancements, shift differentials, special teams: $92,400

Overtime: $9,500

Benefit Package: $49,500. (Note: The city does not make Social Security payments for police officers.)

Key components of benefit package: Health, $24,300. Retirement: $23,300.

Q. How much does the mayor earn?

A. The mayor earned $132,878 in 2012. In the Daily News' previous review of the city payroll in 2010, Mayor Dan Sullivan earned $114,960 between Aug. 1, 2009 and July 31, 2010. His current salary represents a 15.6 percent increase.

The mayor is the highest paid city executive, followed by city attorney Dennis Wheeler at $123,879.

The mayor's salary and that of other elected officials in the city and School District are set by a Commission on Salaries and Emoluments.

Turnagain resident Pat Redmond, a commission member, said the commission took into account the mayor's pay in other cities of similar size with similar budgets. It seemed like the mayor should get some sort of raise, she said. "We really had to compromise on the amount."

The commission's decision on Nov. 10, 2008, was effective beginning July 1, 2009, when Sullivan took office. The recession was already beginning to sap city revenues in late 2008.

It was also about the same time the Assembly was considering new five-year-contracts for the biggest city employee unions.

Q. Where does the mayor's salary fit on the city payroll list?

A. If you take into account overtime pay, 153 employees made more than the mayor.

Q. The Alaska Public Forum, a conservative nonprofit group, said in a newspaper advertisement on April 1 that 306 city employees made more than the mayor, not 153. What's the difference?

A. The Alaska Public Forum added in the value of the city's benefit contributions to each employee. Sullivan has declined city health insurance, which is worth about $20,000, Fegley said, so his total benefits are lower than most employees.

Sullivan is covered by his wife's health insurance, a benefit of her employment as a teacher for the Anchorage School District, he said.

Sullivan will get a pension under Tier 3 of the state Public Employees Retirement System.

Q. What benefits do city employees get?

A. From Fegley: Key components of the benefit package are: health insurance, retirement and employer-paid taxes. The health insurance is typically a fixed cost, while others, like retirement, vary with compensation.

"Here is snapshot of benefits on average: Employer-paid taxes: 6 percent of their pay. Insurance: 24 percent. Retirement: 20 percent. Health alone averages $17,000."

Q. How does city health insurance compare with the School District's?

A. Sullivan cited two differences: The School District's plans are simpler, while the city has 650 different options in its various health insurance plans. District plans cost the district a few hundred dollars less per employee per month than city plans.

The city is working with the district to see if the two entities' plans can be standardized, Sullivan said.

Q. How is the city health plan more complicated?

A. Fegley said the city contributes an amount ranging from $1,660 to $2,234 per month, depending on the union or other work group, for each employee's health insurance.

If an employee chooses a $250-deductible city plan, he'll have to pay some out of pocket each month to cover the cost of that plan, Fegley said. With a $500-deductible plan, the employee might still have to pay something each month. With a higher deductible plan, city contributions more than cover the cost of the plan, and the employee then gets the balance of the city's contribution in cash.

Q. How much is the pension?

A. Most city employees are under the state Public Employees Retirement System. The city must pay an amount equal to 22 percent of earnings to PERS for each covered employee. Some of that money is for the annual pension costs for an individual, and the rest is for the pension fund's unfunded liability.