Part II – FY 2022 Borough Manager’s Proposed Salary – Follow-Up to My Letter of May 3By Dan Bockhorst
May 11, 2021
Those comments reflect the perceptions of those who made them. I don’t apologize for anything I did and would take the same action again if faced with the same circumstances. The comments regarding my May 3 letter were by no means universally negative. I also received many positive remarks about my letter. Mayor Dial took the time to write a lengthy note to me the other day (just after midnight!). Mayor Dial was courteous, explained his views on the matter, candidly told me he didn’t agree with some of the things I had said, but thanked me for my comments. That was professional and much appreciated. I won’t speculate about how other elected Borough officials might view my comments. I’m a strong believer in transparency in government. During the time I was the Ketchikan Borough Manager, I wrote standards to ensure that the Borough budget and other financial documents promoted transparency and accountability, were easy to understand, and provided trust and confidence. I wanted those standards to be given great weight. Therefore, I proposed to the Assembly that it enact an ordinance instituting those standards in law. The Assembly did so by adopting Ordinance Number 1777S2. The standards are codified in KGBC 4.05.015, a copy of which appears below.
My letter of May 3 to the Assembly had one purpose. I wanted to shine a bright light on a proposal to adopt a budget that included an outrageous salary increase for the Borough Manager. The table of “Ketchikan Gateway Borough Wages and Benefits by Department” in the proposed FY 2022 budget shows the Manager’s total wages at $174,997.13; his total benefits at $100,420.53; and his total wages and benefits at $275,417.66. A copy of the table showing the heading and the line item for the Borough Manager follows; the table for all 112 Borough employees appears on pages 163 and 164 of the proposed budget.
At least two elected Borough officials have claimed that the budget was never intended to give the Manager that salary and benefits – it was just a placeholder to allow room for negotiation of a new contract. A “placeholder” of $174,997.13 seems to be a peculiar number – if the number were a simple proxy, why not $175,000? Further, when most employers negotiate a contract, they probably wouldn’t disclose beforehand what upper limit they’d be willing to pay. The better course, in my view, would be to start on the fiscally conservative (but reasonable) side and work up from there. If necessary, a supplemental appropriation would be readily attainable (it wouldn’t even be necessary as already-appropriated funds could be redirected). Almost any line item can be changed in a proposed budget (school funding is a notable exception) and almost any figure can be shifted to another purpose once the budget is adopted. (Until now, I never considered the prospect that the $174,997.13 figure might be the low-end figure to open negotiations.) The FY 2021 (current year) wages and benefits for employees are found on pages 173 – 178 of the current budget. The figures for the Borough Manager are shown below.
In addition to his salary, the Borough Manager is entitled to an amount equivalent to 10% of his salary which is placed in a “longevity incentive compensation account” to be paid upon the completion of his initial five-year term. That figure does not appear in the budget. A comparison of the proposed 2022 wage and benefits table to the same table for the current year, shows a $49,526.70 (39.5%) increase in wages, $21,047.39 (26.5%) increase in benefits, and $70,571.09 (34.5%) increase in total compensation. The 17-page document dated April 27, titled “Fiscal Year 2022 Budget and Capital Program Overview,” signed by the Borough Manager, addresses three elements relevant to the issue at hand: wages, the recent Borough employee compensation study, and proposed appropriations in the entire office of the Borough Manager. That information is presented below. I’ve highlighted portions that I consider relevant. A copy of the entire overview is available in the May 3 Assembly meeting packet. Regarding Wages and the Employee Compensation Study, page 4 of the 2022 budget overview states:
Regarding the Increase in Administration Costs, page 6 of the overview states:
To be clear regarding my May 3 note, I carefully combed the proposed FY 2022 Budget and did not find anything that specifically states the proposed increase in the Manager’s salary and benefits for FY 2022. The only way I found it was by comparing the wages and benefits for FY 2021 to those for FY 2022. How many members of the public and how many Borough elected officials are likely to know how to determine such a change? That’s not intended to disparage the public or elected officials. Rather, it’s that the budget is complex and formatted in a manner that doesn’t always lend itself to such comparisons. In one instance addressed later in this letter, it is necessary to reach back to an Assembly meeting packet from April 20, 2015, to make comparisons. Consider carefully whether the above description of the budget presentation meets the standards in KGBC 4.05.015 – is it transparent, is it easy to understand, and does it promote trust and confidence? In terms of what’s included in the budget and how it’s presented, it’s important to know that the Manager alone has the duty in State law (AS 29.20.500(3)) and Borough law (KGBC 4.05.020(a)) to prepare and submit a proposed budget to the Assembly. Thus, the Manager cannot escape full responsibility for the degree of clarity and transparency of the information contained in the budget and the budget overview. It takes many months to develop a large budget involving many tens of millions of dollars like that of the Borough. This year’s proposed budget is 166 pages and proposes expenditures and transfers out amounting to $55,571,511. Borough staff spend a great deal of time assisting in the preparation of the budget. From time to time, the Borough Assembly gives direction to the Borough Manager about the budget, but any direction by the Assembly must be given openly, in public, and during a formal meeting of the Assembly. I repeat an important point noted above – the Manager has the exclusive duty and responsibility to prepare the budget reflecting the standards in KGBC 4.05.015. Ask yourself whether, this year, the budget was handled in a manner that serves the transparency and accountability standards listed in Borough Code. Another point to consider. One Assembly Member has made numerous false and disparaging remarks about me on social media. Those comments reflect poorly on the Assembly, and worse on the Assembly Member who made the remarks. For example, in one post, the Assembly Member states: “what Bockhorst forgot to mention in his letter is that the Assembly has final say over raises, not the manager.” That’s an absurd statement which distracts from the issue. My letter to the Assembly is unambiguous concerning the Assembly’s role. Here are three examples where, in my one-page letter, I recognized the role of the Assembly in making the final determination (emphasis added): 1. In the second paragraph, I wrote: “How do you think other Borough employees will feel if you grant such an increase?” 2. In the third paragraph, I stated: “How do you think taxpayers and other local citizens will feel if you grant such an increase? You have a duty to be good stewards of the public treasury.” 3. In the last paragraph, I wrote: “How could any of you address the deficit with cuts or tax increases if you grant the proposed salary increase?” The Assembly’s Member’s social media comments discredit that Assembly Member and do not reflect well on the Assembly as a whole. It shows that the Assembly Member either isn’t paying attention to important matters or is purposefully trying to distract the public’s attention from the real issue. Moreover, the Assembly Member showed a lack of civility in his comments above and other comments. Is that how the Assembly Member treats others who voice opinions different from his? I am a constituent of that Assembly Member, the Mayor, and all other Assembly Members. The Assembly Member’s personal attack and lack of respect are beneath the office he holds and do not reflect well on our areawide governing body – the Assembly. Moreover, the Assembly Member’s written comments on social media demonstrate a surprisingly poor grasp of important facts about the action taken by the Assembly on Monday. The Assembly Member compared my compensation as the Ketchikan Borough Manager more than 4 years ago, to that of the current Borough Manager. On this point, the Assembly Member stated: "Bockhorsts [sic] salary when he retired as Borough Manager was $148,000. currently [sic] the manager is making $126,000.” First, the Assembly Member expressed no awareness of the longevity bonus for the current Borough Manager that I mentioned earlier. Considering that incentive, the Manager’s current compensation, excluding benefits, is $138,017.47 – not $126,000. If that wasn’t disclosed to the Assembly during its May 3 executive session involving negotiation of a new employment contract, it’s a major problem. Without disclosure, what, if any, increase would the Assembly have offered? The Assembly Member also publicly claimed that I was paid $148,000 per year as Borough manager. That’s a slight (but insignificant) exaggeration; I received a salary of $144,212 in my final year. However, what is significant is that I received that salary level only because I voluntarily reduced my benefits to $43,283. Benefits are certainly an important form of compensation. My total compensation package including salary and benefits during the last of my nine years as Borough Manager was $187,495. To be sure, that’s a lot of money. Thus, my comments here shouldn’t be construed as a complaint or lack of satisfaction about my compensation. In fact, as noted below, I voluntarily declined any increase in compensation during my last year as Borough Manager because, in part, I considered myself to have been amply compensated. Another significant factor that weighed on my decision to forego any salary increase was the fact that the Borough was facing fiscal difficulties due to a poor economy (albeit far less severe than today) which constrained the salaries of other Borough employees. Since their salaries were depressed due to a downturn in the local economy, I couldn’t, in good conscience, seek any increase in compensation for my last full year of employment. (See page 452 of the Assembly meeting packet for April 20, 2015, where it states, “Given fiscal circumstances facing the Borough, the Borough Manager is not seeking any increase in compensation for FY 2016.”) In contrast to my total compensation of $187,495, the Manager’s current compensation package is $218,350.45 (comprised of $125,470.43 in salary, $79,373.14 in benefits on that salary, $12,547.04 in a longevity bonus, and $959.84 in benefits on that bonus). The current Manager’s proposed increase – assuming he would continue to receive the longevity incentive bonus – would raise his compensation package by roughly $27,000 to a new total of about $245,000 annually. No doubt, the current Manager has had a lengthy career in local government, as have I. By the end of my last year as Borough Manager, I had 40 years of experience in local government in Alaska. I hope this letter brings much needed transparency and clarity to the topic of the Manager’s proposed compensation for FY 2022. Cordially, Dan Bockhorst Sent to:
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Received May 07, 2021 - Published May 11, 2021 Related Viewpoint:
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