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Healthy Scrutiny of Public Pay
December 2, 2016
by Rick Cole
Media coverage of pay for Santa Monica City staff recently touched a nerve with many residents.
Let me begin by saying: we never forget who we work for – you. Let me add that the topic of public pay is a public issue and I welcome healthy scrutiny.
The spark for this most recent controversy was a press release from a right-wing think tank based in Nevada that maintains a statewide database of employee pay called “Transparent California.” In a subsequent post, I will address their agenda – but let’s first examine the claims that got people’s attention and led to several media stories from reporters and opinion columnists.
Transparent California’s key assertion is true, but misleading. Their headline claimed that a total of 105 City workers “cleared” at least $300,000 last year. Of course, in ordinary usage, “cleared” means take-home pay, so no wonder many residents were astonished. Actually, the $300,000 figure used by Transparent California was not their take-home pay, nor even their total salaries, but the entire cost to the City of those employees -- combining their regular salaries, along with the cost of medical and all other benefits, overtime pay, City pension contributions and even payment of unused vacation time owed to retiring employees.
Santa Monica City salaries and benefits are above average for Southern California cities. What’s not true is that they are wildly out of line with other public employers. According to the California State Controller’s Public Pay website, the average employee wage cost of cities on the Westside is:
- Los Angeles $83,356
- Beverly Hills $79,179
- Culver City $74,285
- West Hollywood $72,906
- Santa Monica $72,379
Some residents were astonished that salaries made up 72% of our General Fund budget. But that is pretty standard for cities (nearby Culver City is 77% of their general budget). After all, cities don’t make or trade goods. We provide services and those are mostly provided by people --whether it is patrolling our streets and responding to fires and medical emergencies 24 hours a day, seven days a week; or maintaining our parks; or driving our Big Blue Buses. We spend a lot on books in our Libraries – but you only have to buy a book once. You have to pay the library staff every hour that the library is open – and our four branch libraries are all open 49 hours a week and the Central Library is open 63 hours a week.
One of the errors in Transparent California’s claims (repeated by several news outlets) was that our Police Chief earns more than the Police Chief of Los Angeles. Transparent California included pension contributions in the total cost of our Chief’s pay, while it failed to include pension costs for LA city employees in their calculations, hardly a balanced comparison. Chief Jacqueline Seabrooks’ pay in 2015 was actually $42,296 lower than Chief Charlie Beck with a comparably lower total compensation cost when pension contributions are included for both.
More than two-thirds of the staff named on the Transparent California list were Police and Fire staff who earned significant overtime pay in 2015. Two factors drive these costs: the number of vacancies in our police and fire ranks and the costs of providing protection for special events such as movie shoots and the LA Marathon -- as well as mutual aid deployment of fire crews to wildfires. Last year, movie shoots and special events alone racked up 6704 hours of overtime coverage for the Police Department. The overtime costs are reimbursed for movie shoots and for most special events that are not produced by the City.
I share the concern about managing overtime costs. We are working diligently to fill our public safety vacancies. What we will not do, however, is compromise the protection of the public due to staffing shortages.
In assessing the cost of government, it is important to assess its value as well. Santa Monica has long delivered a high level of public services – and a wider range of services than most communities. There are just three libraries in all of California that have earned the top rating of Five Stars from Library Journal Magazine – and Santa Monica is one of them. There are only about a dozen Fire Departments ranked as Class One by the insurance industry – and Santa Monica is one of them. The City of Santa Monica is nationally recognized for our affordable housing programs, our environmental efforts, our public works projects and the social services we provide to residents.
Santa Monica is one of fewer than 10 cities statewide (out of 482) that have a AAA rating (or its equivalent) from all three credit rating agencies. We have healthy reserves and unlike most California cities, have maintained and improved our infrastructure even during the recent downturn. Our finances are audited rigorously every year by an independent firm and those audits – and our detailed budgets -- are all online:
The Budgets & Reports database contains financial reports by year and type. These include operating and capital budgets, the Comprehensive Annual Financial Report ...
We also have an interactive site that allows you to examine both our operating and capital budgets with all our expenses and revenues that can be compared year to year at a glance:
In addition, the City Council’s Audit Committee, which includes citizen finance experts who volunteer their time, oversees internal auditing by an outside firm. The Audit Committee will commission a public audit of Santa Monica’s staff compensation and overtime costs in the weeks ahead and the results released when it is completed. All the records of the Audit Committee work are also online:
I would be the first to acknowledge that overall public sector compensation costs in California are high -- and that our statewide public pension structure is not sustainable in the decades to come. Even in good times, we have a responsibility to constantly strive to hold down costs and improve results. Public service is a public trust.
In the next two “Long View” posts, I want to share what we are doing about the long-term challenges to maintain Santa Monica’s fiscal health – and then to reflect on the threats clouding the future of public service.
Thanks for reading. As always, I welcome your feedback: