UPDATE: Report on Earnings of City Employees Inaccurate, Says Mayor

A report published Feb. 20 by the Mackinac Center for Public Policy on the 2011 earnings of some Dearborn city department heads is grossly misleading, Mayor Jack O'Reilly said Thursday.

The report from the conservative policy think tank says that at the same time the city was asking residents to vote to raise taxes, they were giving large salary increases of up to 12.8 percent for some city officials.

Capitol Confidential, the Mackinac Center's publication, quotes one of its own experts, chastising the city for the double standard.

“When they’re pushing tax hikes, residents hear a lot from local government officials about ‘shared sacrifice,’” said Jack McHugh, the legislative analyst for the Mackinac Center for Public Policy. “These figures give the appearance that the sharing stops at the city hall door.”

According to the city, the report's numbers were gross earnings of listed employees for 2011–including the heads of recreation, economic and community development, finance, information systems, public works, public information and the executive assistant to the mayor.

Those earnings range from $96,000-$131,000, but O'Reilly said that includes base salary plus things like longevity payments to employees serving 10 years or longer, mileage and payout for unused paid time off. City officials said those totals varied greatly from the base salary levels for those department heads.

Salaries in 2011 for those same employees ranged from approximately $85,000-$112,000, he said.

In 2011, O'Reilly explained, gross earnings also included a one-time payout of retroactive salary increases–1 percent in 2008 and 2 percent in 2009. The retroactive increase was based on the resolution of contracts for union employees, but was also applied to salaried department heads, who are non-union.

The total increase in pay was also applied to 2011, meaning that all city employees make 3 percent more now than they did in 2010.

"The year 2011 was different because union contracts had expired and we had to negotiate," he said. "We negotiated for two (retroactive) years on contracts."

The retroactive pay was applied as a one-time lump sum in 2011, accounting for much of the pay difference from the previous year.

Salary increases for appointed department heads are not decided by the mayor, but made under a city charter mandate that allows those appointees to receive "an average of up to the same annual increases and decreases negotiated within city unions." Those pay increases are approved by city council.

Addionally, unioned employees are eligible for overtime, shift pay and step increases; department heads are not.

"Department heads don't have to get increases with union contracts," O'Reilly explained, "but the city decided they should in 2010-11."

Furthermore, O'Reilly touted Dearborn's hands-off system, saying it prevents politics from playing a part in pay negotiations.

"Department heads become a political issue (in other cities)," he said. "Here, that can't happen. We've got a good system."

No pay increases will be applied in 2012. Additionally, all city departments are being asked to make a 10 percent reduction in personnel costs this year, which could come in the form of pay cuts, pre-tax cuts, pension contributions, or other negotiable forms. That request includes police and fire unions.

Director of Public Information Mary Laundroche also said that longevity payments, which are applied to all full-time city employees after a period of 10 years, were on the discussion table for 2012 cuts. However, the elimination of the payments for union employees would have to be negotiated through their contracts.

Correction: This article was clarified to explain that the 3 percent raise was a one-time increase in salary levels for department heads, 2 percent of which was also applied retroactively to 2009 pay and 1 percent of which was also applied retroactively to 2008 pay.