PITTSFIELD — When city councilors deliberated over the recently passed FY 2023 budget last month, they noted that for one group of city employees, the down-turning of the economy is — at least momentarily — reaping positive results.
As the new fiscal year kicked off at the start of this month, a group of about 50 city department heads, managers and non-union employees received a 7.5 percent salary increase thanks to a clause in the city’s code that ties their annual salary increases to the prior January’s consumer price index for all urban consumers.
During the budget talks, Mayor Linda Tyer and Finance Director Matthew Kerwood noted that the CPI of 7.5 percent was a 42-year high for the CPI — a measure of how much the cost of basic goods and services like food, energy and shelter cost from one year to the next.
At the midpoint of the calendar year, the consumer price index (CPI) continues to climb, reaching 9.1 percent in a report released Wednesday by the U.S. Bureau of Labor Statistics.
City leaders are on their way to changing how high these increases can climb. On Tuesday, the City Council sent a proposal from Tyer capping the annual increases to the council’s ordinance and rules subcommittee.
The subcommittee, which is set to meet on Aug. 1, will consider and then offer a recommendation to the whole council on whether or not it should amend the city code to cap increases for this employee group at 5 percent — creating what Tyer called during May budget deliberations a set of “guardrails” for the city’s employee costs.
Paying out the cost of living increase to city leaders became a controversial talking point early on in the city’s consideration of the city’s $188.8 million operating budget.
Human Resources Director Michael Taylor told the council in May that the increases accounted for about $300,000 more in paychecks this fiscal year to management staff and about $100,000 more to non-union employees.
The annual increases are set out in a section of city code, not in a formal contract with the employees. While Tyer said she and other city leaders were “stunned” with how high January’s CPI was, she decided the city had to meet its commitment from the ordinance.
“After some careful deliberation, we came to believe that what is contained in the city code carries the same legal weight as the provisions that are contained in our collective bargaining agreements,” Tyer told the council in May.
Councilor Earl Persip III said during that meeting that if the city wants to keep a competent and hard-working staff, it needs to continue to meet the cost of living increase this year.
“It’s time to start paying your employees,” Persip said. “You have to pay your assets. The private sector was willing to pay qualified, educated people a lot more than we are. The people who do this love it, they have a passion for it.”
Persip said in May that for years the cost of living increases have “only been small percentages, it just happens to be a high one this year.”
The minimum salary for someone in a management position last fiscal year was about $39,350. The 7.5 percent increase this fiscal year adds about $2,950 to the minimum salary, for a total of about $42,300.
The maximum salary any management position can receive last fiscal year was about $132,690. The 7.5 percent increase this fiscal year added about $9,960 to the maximum salary, for a total of about $142,650.
The council voted unanimously in February 2019 to tie increases for management and non-union staff to the January CPI. Prior to that, the city code stated that “changes of the compensation plan shall be made in a manner … to reflect changes in the cost of living.”
Taylor came before the ordinance and rules subcommittee in 2019 to explain that using the CPI was an attempt to make fair and transparent cost of living increase. He said though it was part of the code, “historically this group really hasn’t ever gotten the cost of living increases.”
The proposed FY 2023 budget presented to the City Council Tuesday night, would direct nearly $100 million to the municipal operating budget, $72 million to the Pittsfield Public Schools budget, $16 million to the city’s water and sewer enterprise budgets and $10 million to other expenses.
“Everyone knows exactly what data is being used to determine those increases,” Taylor said of the CPI. “Then it’s not just arbitrary depending on who might be within the administration. Rather it’s just data that anybody can find and it’s objective, it’s transparent.”
When the cost of living increases were discussed in May, some councilors said any increase — to meet cost of living or otherwise — should be counted as lucky in a time when the future of the nation’s economy seems rather bleak.
“Most people that work in the public don’t have a guaranteed cost of living increase, sometimes they actually take furloughs in time such as this,” Councilor Charles Kronick said at the time. “I’m not saying that we do that, but I’m just saying maybe we don’t need a guaranteed [cost of living adjustment] but an optional COLA.”