O.C. Workers’ Pay Within ‘Market Rate’

Refuting claims of lavish paychecks and extravagant perks, a study released Friday comparing public and private-sector compensation concluded that the salaries and benefits paid to county employees are largely on par with those of nongovernment workers.

The long-awaited report, funded by the county and prepared over the last four months by an independent consulting firm, found that county workers earned salaries within the “market rate” for more than 70% of the positions compared.

The study also said that the county’s costs for employee benefits were lower than the average private-sector costs calculated by the U.S. Chamber of Commerce in 1994.

The county Board of Supervisors commissioned the study a few months after the December 1994 bankruptcy in response to charges by some anti-tax activists that county workers were overpaid.

The supervisors also appointed a special compensation committee made up of county managers, business leaders and residents that helped establish the criteria for the study.

County leaders on Friday praised the report for its thoroughness and objectivity, adding that the document should give both government officials and the public a better understanding of government wage scales.

“This is probably the most comprehensive study we’ve done on the subject,” said Supervisor William G. Steiner. “I think it might put to rest some of the myths that surround public employee compensation.”

Irvine attorney Bill Mitchell, who sits on the compensation committee, agreed.

Although Mitchell and others noted that the study identified several jobs, such as custodian, for which the county pays more than the private sector, he said the report “shows that if there is waste in county government, it is not being caused by worker salaries.”

“There is not a largess that public employees receive . . . that those in the private sector do not,” Mitchell added.

But some activists questioned the accuracy of the results and accused the county of “stacking the deck” by selecting large corporations for its wage comparisons, rather than small local firms that offer less generous compensation packages.

“I’m skeptical,” said Bruce Whitaker, an anti-tax activist and member of the compensation committee. “You can do just about anything you want with a survey like this if you choose which companies to compare.”

Whitaker also questioned some specific survey findings, including one concerning holidays, vacations and sick days. The report said that the average county employee receives 37.5 days of potential paid time off annually, compared to 39.5 days for private-sector workers.

“I was surprised by that,” Whitaker said. “I don’t know about you, but I’ve never received anywhere close to 39 days” off per year.

But the KH Consulting Group of Los Angeles and county personnel officials defended the survey’s methodology, as well as its conclusions.

Following suggestions from the compensation committee, the consultants included other public agencies as well as a diverse cross-section of private firms from across the state for its study, officials said.

More than 1,000 employers were invited to participate in the study. Of the 160 that took part, 103 were private firms and the remainder were public agencies. According to the report, 53 of the private businesses were “large,” 33 “medium-sized” and 17 “small.”

Local companies that participated in the study included the Walt Disney Co., the Irvine Co., Smart & Final Inc., Electro Rent Corp., Hoag Memorial Hospital Presbyterian, Carl Karcher Enterprises Inc., Chapman University and the Rutan & Tucker law firm.

The county and the consultants settled on 57 jobs--ranging from chief executive officer and clinical psychologist to secretary and plumber--for comparison. The consultants said a few positions, such as deputy sheriff and animal control officer, proved difficult to survey, however, because there weren’t many comparable private-sector jobs.

Despite the debate over government salaries, the consultants said the results generally showed little disparity with those of private companies.

“When we were starting this, we thought we would have these dramatic, earth-shattering” results, said Gayla Kraetsch, president of KH Consulting. “But when it came out, it was very logical.”

Kraetsch said one reason the county fared so well in the survey was its frequent use of hiring freezes, early retirements and other forms of “salary management controls” over the last few years.

Of the county jobs surveyed, 70.9% paid at or below the market rate, which was determined by averaging all wages--both public and private sector--for each specific position. About a fifth of the county jobs paid up to 15% above the market average, while an additional 9.1% paid more than 15% above the average, the report found.

Compared to the private-sector wages surveyed, many county salaries were competitive while others were substantially higher or lower.

The county pays its chief executive officer $140,000 per year, compared to $265,000 for the private-sector average. The private average salary of a general counsel is $204,615, compared to $121,160 for the county counsel.

On the other hand, a county air-conditioning mechanic makes $46,509, compared to $39,820 for the private average.

The county also compared favorably when it came to worker benefits.

The county’s cost of benefits ranged from 11% to 25% of base salary, according to the report. By contrast, the U.S. Chamber of Commerce listed the average cost of private-sector benefits to be 28.8% of salary. With the exception of law enforcement, the county’s benefit costs were also “generally below” those of private-sector survey participants, the report stated.

One of the greatest disparities was for the position of custodial worker. County custodians earn $25,202 in salary, plus more than $5,000 in annual insurance, retirement and other benefits. By contrast, the private average salary for positions was $18,364 and several firms offer no benefits.

Supervisor Marian Bergeson said custodians and other county jobs that pay significantly more than outside businesses should be considered for possible privatization. She said the proposed county charter, which was defeated by voters in March, would have made it easier for the county to spin such jobs off to the private sector.

“This gives us an objective data base with which to move forward,” she said. “I think this verifies that most county employees are working hard for about the same wages as those in the private sector.”

County labor leaders said they were pleased but not surprised by the results of the survey.

“We knew it all along,” said Frank Eley, president of the Orange County Employees Assn. “I think people who have notions about all the money county employees make haven’t visited the county and don’t know what we do.”

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Pay Parallels

County employee wages and benefits are largely in step with those of their private-sector counterparts. A few places where they differ:

*--*

County Private Sector* Chief executive officer $140,000 $265,000 General counsel $161,634 $204,615 Air-conditioning mechanic $46,509 $39,820 Custodial worker $25,202 $18,364

*--*

* Average of firms in study

Source: KH Consulting Group

Researched by SHELBY GRAD / For the Times