News 13 Investigates: Buncombe County ordinance provides automatic employee raises

    <p>Buncombe County seal (Photo credit: WLOS staff){/p}

    In Buncombe County, raises for county employees are automatic. While some say it's an incentive, it's costing taxpayers millions and it's gone on for a decade.

    News 13 sat down with the outgoing interim Buncombe County manager George Wood to talk about why he'll recommend changes to a new Buncombe County leader.

    Smaller businesses struggle to offer employees incentives

    “Asheville is a really foodie city, but the one thing it didn't have was popcorn,” said Ginger Frank, co-owner of Poppy Hand-Crafted Popcorn.

    Frank and the employees of Poppy have changed that.

    “It was the snack I grew up on,” added Frank.

    It’s a snack that now appears on Bloomingdale's shelves in New York City, in addition to a pop up shop in Union Square Holiday Market in NYC because of dedicated employees. Recently, Frank was awarded Entrepreneur of the Year at the Venture Asheville Honors. It’s an award chosen by a selection committee after an open nomination process. Poppy was also named the fourth fastest growing startup in the area, as determined by Compounded Annual Growth Rates.

    “They're supposed to give up time with their family, all those things required to keep this business running, and yet I know for sure they could go other places and get paid more money than I'm able to pay them,” Frank said.

    That tumbles heavily in Frank's mind.

    “I feel like everybody on staff is underpaid, I'm very open with them about it. Nobody here is getting paid what they're worth,” Frank said.

    Buncombe County's unique ordinance

    It’s the opposite from one of Buncombe County's largest employers, Buncombe County itself. A 2008 recommendation to add eight patrol deputies included a guaranteed cost of living adjustment, or COLA, for every county employee, every year for the last decade, except 2011. Even then, employees were retro-payed in 2014. Over the last four years, the COLA increased from $1.1 million to $1.6 million.

    “This county has built into its personnel policy that whatever the CPI, Consumer Price Index, is, which is whatever the federal government determines, whatever that is for December, then it is an automatic increase, effective April 1 of the next year,” Wood said.

    Why is that a problem?

    “As we're doing the budget, it doesn't matter what the financial condition of the county is, it's already been determined and the fact that employees get it April 1, even before the start of the new year,” Wood said.

    So, recently, when revenues slipped to $1.6 million short of expenditures, Wood recommended eliminating the automatic adjustments.

    “Just like they're going to have to look at how much can we afford to give the schools and, of course, the other major issue I made them aware of, too, which is in the past we have been eating all of the increase for medical insurance,” Wood said.

    Commissioners voted not to make changes to health insurance premiums this past fall.

    How other counties do it

    In Henderson County, a system similar to Buncombe County’s wouldn't fly.

    “There's nothing guaranteed here,” Henderson County manager Steve Wyatt said.

    Wyatt said employees get increases only when they better the county's bottom line.

    “They're challenged by management to come in with better ways for doing things, delivering quality service but coming in spending less money,” Wyatt said.

    “If we're able to save money through the year, then the chances are much greater for a cost of living or some kind of salary adjustment,” Wyatt said.

    From comparable sized counties of Pitt and New Hanover to Haywood and Henderson counties locally and the cities of Hendersonville, Charlotte and Waynesville, the common thread was salary increases are reviewed annually and approved when budget availability allows. In fact, in Haywood County employees got no increase from 2008-14. The same was true in Henderson County from 2009-12.

    “While this may not be a very common strategy that's used by local governments, it is a very strategic and innovative way of both recruiting and retaining the best and the brightest,” said UNC Chapel Hill’s School of Government’s Leisha DeHart Davis, who is a professor of public administration and government .

    UNC’s School of Government surveyed cost of living adjustments for all 100 North Carolina counties in 2017. Forty-one provided COLA adjustments, the average around 2 percent, but even DeHart Davis said counties must budget for it.

    “There's no doubt, including automatic COLA increases in a budget means a county is going to have to real plan for that and think very hard about where that money is going to come from,” DeHart Davis said.

    When News 13 asked Wood, who’s worked in several North Carolina County governments, if had he ever seen anyone else do it quite this way, the interim manager answered, “No, that's why I brought it up.”

    Wood's recommendation to Buncombe County's incoming manager is to remove the guarantee and add a performance review system.

    “We would love to be able to offer our employees what these employees get offered,” Poppy's Frank said.

    Frank, who is worried about repairs to the Black Mountain production facility that was damaged in December snow, said she'll keep juggling, hoping employees stick with her.

    “It's impossible to provide raises while we’re trying to grow,” Frank said.

    Just this past weekend, Buncombe County commissioners started work to narrow down their selection in the nationwide search for a new county manager. Wood's last day with Buncombe County will be Feb. 28.

    Here's a look at the policies for other counties/cities:

    Pitt County

    According to Pitt County’s deputy county manager, they use the Consumer Price Index as a guide in their Cost of Living Adjustment decisions, but ultimately, a COLA is determined by their financial capacity to increase salaries. The CPI is the starting point, but managers have the flexibility to adjust the percentage change based on projected budget numbers. There have been years where the CPI had a positive increase, but the county could not afford a COLA, and there have been years were the county provided a COLA increase that was larger than the CPI. Ultimately, Pitt County says it comes down to the projected ability of the county to be able to afford the COLA and the will of the board of commissioners.

    Haywood County

    Haywood County told News 13, “Each year, when the budget is being prepared, our Board of County Commissioners along with County Manager and Finance Director carefully consider the revenues and expenses and makes a determination based on several different factors as to whether or not to include a Cost of Living adjustment. This is reviewed each year. We do not have requirements in our personnel policy manual that automatically provides for a COLA adjustment.”

    New Hanover County

    According to New Hanover County, “Salary adjustments may be tied to changes in the cost-of-living-index, typically to the consumer price index (CPI). As a result, employees may be eligible to receive an increase to their base pay rate as a cost of living adjustment (COLA). If changes to the CPI justify a cost-of-living increase, funding for increases may be recommended in the budget and then considered for approval by the Board of County Commissioners during the budget adoption. Salary adjustments are not automatic. They may be determined as explained above. Funding for salary adjustments are included in the budget adoption process by the Board of County Commissioners.”


    In Hendersonville, similar to Henderson County, “Employees who meet expectations or better in their annual evaluation (levels include: does not meet expectations, needs improvement, meets expectations, exceeds expectations, and outstanding) are eligible for a market adjustment (i.e. cost of living) in their salary, in addition to their annual merit based (performance) increase. The level of market adjustment is determined based on the average percent change in the consumer price index for the southeast and all urban consumers, in addition to the implicit price deflator. Our personnel policy details the pay plan for the City. Specifically, it delegates this administration to the City Manager and Human Resources Officer, laid out in Article III Section 2 of the City’s personnel policy (excerpt below). This is also dependent on budget availability which is approved annually by the City Council.”


    The city of Charlotte told News 13, “A need for market adjustments to remain competitive with the labor market is reviewed annually. If market adjustments are warranted, they are included in the City Manager’s budget, which is approved by City Council.”


    In Waynesville, “The Town Board considers salary adjustments on a year to year basis. The Town is working on a 5 year cash flow plan that has a target of a 3.5% cost of living adjustment every other year and a 1.5% annual career track adjustment. Career track is similar to a merit increase except that each department has specific career goals the employee must meet in order to qualify. Final consideration of both the COLA and Career Track are set when the Board considers the budget.”

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