Randolph links union raises to growth in revenue

Mass Innovations, From The Beacon, December 2010

The firefighters’ and patrolmen’s unions in Randolph have agreed to a plan that will tie future contractual raises to the growth in town revenue.

Town Manager David Murphy said the agreements, which appear to be the first of their kind among Massachusetts cities and towns, are designed to help avoid layoffs among public safety personnel and put Randolph in better position to manage rising health care costs.

“Difficulty presents opportunity,” Murphy said. “In a more difficult fiscal time, I think that people are more willing to be creative.”
As of mid-November, two other Randolph unions were considering the town’s offer, Murphy said.

The agreements with the firefighters’ and patrolmen’s unions lay out 10 brackets of revenue growth – ranging from “Negative to 0.49 percent” to “5 percent and greater” – with corresponding wage increases for each level.

For the current fiscal year, the growth in revenue is only marginally above zero – less than one-tenth of one percent of a $68.7 million town budget – meaning that firefighters and patrolmen will see no increase in their pay. Each higher level of growth, in half-percentage-point increments, would lead to an additional one-half of 1 percentage point raise.

The maximum salary increase in a single year would be 5 percent, even if revenue growth exceeded that amount. Murphy said that while it is conceivable, in a very favorable economic climate, that unions would object to having their raises capped at 5 percent, “That would be a problem that I would love to have.”

As a means of confirming the rate of growth, each spring a third party will review the town’s estimates of local aid, town receipts and revenue from property taxes.

An analysis dating back to fiscal 2002 shows only two years in which the town’s revenue growth exceeded 4 percent, Murphy said. In one of those years, the growth rate reflected a Proposition 2½ override. Under the terms of the agreement with the unions, revenue resulting from an override cannot be counted as revenue growth.

Robert Bliss, the communications director in the Department of Revenue, said officials there are aware of only one other instance where a local government entity tied salary increases to a future event or outcome. In the Athol-Royalston Regional School District, salary increases were at one time linked to the school district’s ability to retain students, Bliss said.

For more information about Randolph’s program, contact David Murphy at (781) 961-0911.