A Madison consultant has become big business since 2011 by scoring lucrative government contracts to assess local government wages, and in many cases taxpayers are paying twice: Once to pay the consulting firm tens of thousands of taxpayer dollars to evaluate the wages, and then to pay the higher wages the evaluation often finds is needed.
The consultant, Charles Carlson of Carlson Dettmann Consulting (CDC), and his team have been sweeping up contracts by the handfuls, particularly since the enactment of Act 10, and, of course, Oneida County is one of the latest examples.
In fact, the county recently spent $20,634 for a market study and for reclassification requests that were made as a part of the study - a study in which CDC recommended annual pay increases totaling $800,000 for county employees. In 2013, Oneida County coughed up $32,500 for a CDC study.
Oneida County is far from alone. In 2013, the city of Stevens Point shelled out at least $25,000 for a highly controversial study in which some council members raised the specter of legal action before resolving differences. In Neenah, according to school officials, in 2014, CDC billed the school district at least $28,000.
And, in a contract signed by the city of Oshkosh in 2015, the city agreed to pay CDC $20,000 for a market study, while positions submitted to the company for evaluation were charged at $250 a pop. The city also agreed to pay travel expenses.
The hourly rate for Carlson and his colleagues? A cool $250 an hour for Carlson; $200, for Patrick Glynn; and $175, for Jenna Bidwell.
While it's hard to pin down just how much other local governments are paying for specific contracts, a 2017 proposal for the city of Faribault, Minn., provides an example of what the company charges.
In the proposal, the base fee for employee classification and compensation was $30,000 for up to 65 job classifications identified by the city. For each job evaluation beyond 65 employees, the price rose by $350.
Then there were the add-ons. If the city wanted a detailed custom benefits survey, the fee would be $7,500. If the city decided to have certain non-department head employees interviewed, the rate was $100 for a 30-minute interview.
It all adds up to a lucrative business, with taxpayers footing the bill. In 2013, various reports estimated that the firm had already inked contracts with 42 of 72 counties, and Gannett Wisconsin Media reported nearly $600,000 in contracts.
Business has only mushroomed since then.
The firm's own website lists current public-sector projects for the city of Oshkosh, Waupaca County, Dodge County, Calumet County, and the city of Fond du Lac. It might be a shorter list to compile a list of cities and counties that have not contracted with CDC.
It should also be noted the firm does contract with private businesses, but this report focuses solely on the firm's public sector work, led mostly by Charles Carlson.
Pay it again
In most cases, taxpayers are paying not only CDC, but also the higher wages CDC recommends.
As reported, the company recommended $800,000 in overall wage increases for Oneida County employees. In 2017, Oconto County boosted wages by about $490,000 based on a CDC study, and wages have continued to spiral upwards.
For 2017, the city of Burlington reportedly authorized $120,000 to bring wages and benefits in line with an incentive system proposed by CDC.
Over in Marinette County, the county's administration committee voted to recommend pay raises in 2020 of between 2 and 2.5% for most employees, in line with a CDC study.
The price tag was reported to be in the neighborhood of $400,000.
To be fair, higher wages are not always the outcome - a wage study for Rhinelander in 2016 found the current pay for city employees was 108% of the market average for comparable jobs - but it's usually a surprise when that happens and seems to be the exception rather than the rule.
And, of course, many counties have raised their wages based on CDC's analysis of wages in comparable counties, after CDC recommended wage increases in those comparable counties. That raises the question of whether CDC itself is the reason many counties are slipping behind their "comparable" counterparts.
Indeed, when Patrick Glynn of CDC presented the findings of the wage study to Oneida County's labor relations committee late last year, some supervisors wondered how the county could fall so far behind the others despite doing its due diligence since the last wage study in 2013.
It's because other counties raised their wages during that period, Glynn told them.
"Anywhere from half to two-thirds of the original comparables have done some sort of compensation work," he said. "They've updated their compensation structures. Lincoln County, Marathon, Portage, Price, Sawyer, Wood, Door - all have done some work. It's a pretty decent big chunk.That's the primary reason why."
Of course, at least five of those seven counties contracted with CDC to do wage studies.
Some observers have said Carlson Dettmann in reality is the new public employee union after Act 10 eliminated most collective bargaining, showing up with wage studies that effectively negotiate new and higher salary and wage levels for public employees.
And while public sector unions have their own beef with Carlson Dettmann, arguing the distribution of higher public employee wages is tilted toward supervisory positions, it's clear that overall, the wage studies have helped boost public sector wages substantially since 2010.
The company has not been without criticism.
For one thing, the company does not share much of its data, especially private sector data that it uses in its wage comparisons. That refusal to divulge information was a major part of the controversy in Stevens Point and elsewhere. Local officials have complained that, without access to that data, there's no accountability and the results could be flawed.
Here's how Daniel Guild, now the Rhinelander city administrator but then the administrator of the village of Weston, put it in 2013, in a memo he wrote about the Carlson Dettmann study performed for the village.
"Most concerning to me is the inability to share private sector comparatives used in determining the market pay grades and steps for various job requirements when supposedly 75% of the recommended base wage is supposed to be related to the private sector component," Guild wrote. "When I asked about this at the personnel committee meeting the answer was given that the comparatives cannot be divulged for reasons of protecting proprietary information or technique. I don't see how this study can have any credibility without some way to verify whether the private sector comparatives are appropriate, though."
Over in Oconto County, supervisor Gary Frank has also raised serious concerns.
"We're not only going to pay that this year, but we're going to pay this every year in the future," he told the Green Bay Press-Gazette last year, speaking about the CDC proposed pay raises. "I know we need to balance a lot of different issues here, because we have good employees, we need to pay them, but we also have limited resources."
Frank recently repeated those concerns in an email to The Lakeland Times.
"I have had many discussions with Carlson Dettmann, mostly about the source of the data they used to calculate the 'average' wage for each 'grade' (position description/type)," Frank said. "When I pressed them to provide us with the 'range' and 'median' of the data used, they quit calling the center of pay range the 'average' and started calling it the 'market rate.' They never did provide us with any background data."
Not only did the study propose a hefty overall hike in wages, it created inequities and led to employee complaints, Frank said.
"New employees started at 12.5% below the average (market rate) and the top step was 12.5% above market rate," he said. "Employees were to receive a step each year plus an 'across-the-board' increase in the entire wage scale. I felt this underpaid new employees and overpaid others. Why pay above market?"
Meanwhile, the county was paying more each year across the board.
"It also meant we had a 2.5% increase in wages each year without our 'market' average wage increasing," he said. "This led employees to complain we were not keeping up with inflation, we did not value them, if we did not have an across-the-board wage increase at least equal to inflation."
Frank said the study also rated position job descriptions according to a "grade," which led to continually tweaking position descriptions to see if an employee could move up a grade, especially for employees near or at the top of the pay range for a grade.
"When a position moved up a grade, the employee was moved down to the step, in the new grade, just above their current pay," he said. "This caused the employee to be several steps lower than they were in their previous grade and meant that they would continue to get steps."
Finally, Frank said, the average pay versus "market" went down because they were moving individuals from a high step to a lower step, and being below "market" caused employee complaints.
Accordingly, the county would be paying more but would still fall behind the so-called market rate.
Frank said the county was abandoning Carlson Dettmann in 2020.
Even the public sector unions have their issues with CDC.
AFSCME has complained about transparency but also believes the studies are biased toward paying supervisory employees more than nonsupervisory employees, with huge increases near the top.
Regardless of how the wages are distributed, telling counties and other local governments they have to raise wages overall to stay competitive is big business these days, and it's a big bill to taxpayers.
Richard Moore is the author of the forthcoming "Storyfinding: From the Journey to the Story" and can be reached at richardmoorebooks.com.
Posted: Saturday, September 21, 2019
Article comment by:
Does anyone else see a level of irony in this situation? For years, unions were the bogeymen. Along came Act 10 and the inions were gutted. Now, we have always heard how the private sector does things so much better than the public sector. Sure looks like this consultant firm knows how to beat local government out of money. At least when the unions were around, the money stayed in the community, not some companyís Bank account.
The Northwoods River News | Walker Communications, LLC 232 S. Courtney Street, Rhinelander, WI 54501 | Office (715) 365-6397 | Fax (715) 365-6361
Corporate billing office: The Lakeland Times / Lakeland Printing Inc. | P.O. Box 790, Minocqua, WI 54548 | (715) 356-5236 | Fax (715) 358-2121 Members of the Wisconsin Newspaper Association, Wisconsin Community Papers, Rhinelander Area Chamber of Commerce, Minocqua Area Chamber of Commerce