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Other Pay

 

 

More Surprises than a Walrus with a Fruit Cake


 

By Robert Schussel PhD.

April 22, 2013



Purpose

The purpose of this analysis is provide a greater understanding of the "Other Wages" that the City of Vallejo employees received in calendar year 2012.


Background

Recently, VIB received spreadsheets containing City of Vallejo 2012 W2 wages. As noted in my previous analysis of 2011 wages, "Other Wages" are a smorgasbord of items that range from Bankruptcy Settlement Payouts to Smog Differential Pay. See Glossary for a description of many of the "Other Wages".


To get a better idea of what comprises the $6,468,900 of "Other Wages" the City of Vallejo Finance Office supplied a spreadsheet that listed 51 categories and the total amount paid out for each category.

 

 

Caveats

Some categories (not listed in "Other Wages") such as Educational Incentives, SWAT team member pay, Motorcycle Officer Pay ,Paramedic Pay and HazMat pay are included in employee's base pay. An employee's base pay and other "PERSable pay" determines the size of an employee's pension upon retirement. (PERSable refers to wages that can be applied towards total pay upon which retirement payments are determined by CALPERS aka Caifornia Public Employee Retirement System.)


Other PERSable wages include Uniform Allowance, Canine Pay, Mask Room Pay, Callback Pay, Holiday Buybacks and CAMP Management Incentive (5% of base wage). The CAMP Management Incentives are buried in two categories-- General Flex-bi-weekly payments and General Flex lump sum.


In the past PERsable Educational Incentives and Paramedic pay totaled over $750,000.


Bilingual pay and Longevity pay (also PERsable) are included in both base wages and "Other Wages"


The City's Finance Director responded "I don't know" to what are General Flex Biweekly Non PERsable Payments and Retroactive Supplemental Payments (categories on 2012 employee wage report) and who received them.
 


Findings


To help make sense of the 51 "Other Wages" provided by the City I grouped them into several categories. The 51 categories total $6,468,900. Educational Incentives and Paramedic Pay are included in Base Wages. The current reports provided by the City do not disaggregate the various incentives and bonuses included in base pay.


"Other Wages" identified as being paid to a specific bargaining unit are shown below.


1 )The largest ($2,100,000) "Other Wage" payout was made to IAFF (fire union) as part of their claim against the City during bankruptcy. In addition to the $2,100,000 paid to IAFF the City also paid the IAFF lawyers $900,00 for a total of $3,000,000. In bankruptcy claims IBEW got $2,100,000 and VPOA $1,000,000 for a grand total of $6,100,000. Many employees who had complained that they had given back monies during bankruptcy were made whole/nearly whole.


2) Holiday buybacks cost the City $689,029 plus an additional $280,367 for employees pensions

( total=$969,396). Employees receive time and a half for all holidays even though the odds of working a holiday vary from 71% for IBEW to 33% for IAFF.


3) Uniform allowances cost were $165,811 plus an additional $68,011 for pension contribution increases due to the PERSable nature of the uniform allowance.

(total=$233,822).
  
 

There were several categories that compromised a significant portion of "Other Wages".


1) For current employees the City now spends about $4.7M for health insurance.

$2,142,089 was placed in various medical cafeteria plans for all employees except VPOA. 100% of VPOA members health insurance is covered by the City ($1,281,256).

To help contain the cost of medical insurance the City now gives employees $300 per month (approximately $1,000,000 in total) toward the actual cost of their health. In addition a Cafeteria/Flex account is provided that pays up to 75% of the health insurance cost . Employees have to pay the remainder--$167 to $435 per month depending on the plan. Most retirees only receive the $300 per month payment and have to pay $338 to $1438 per month for their plan. CAMP retirees only pay 20% and VPOA retirees entire costs are covered.


2) Bankruptcy costs of various types accounted for $430,859. The largest amount $176,915 was to pay for individuals who did not receive all of their sick leave/vacation pay when they retired during bankruptcy.


The Finance Director did not know what the Retroactive Non PERSable Payments and Retroactive Supplemental payments were for.


3) CAMP employees received $326,858 for a 5% Management Incentive Pay. [Comment--I have never received a satisfactory explanation why the Management Incentive Pay is considered a Flex Benefit].


4) Acting pay ( working in a position classified higher than ones normal position) was $158,908.

 

 

  

The table below summarizes "Other Wages" that were difficult to classify



Miscellaneous

 

Expense Reimbursement

$27,300

 

 

Mayor's Expense Allowance

$19,800

 

 

Longevity Pay - DOH Post 7-4-04

$5,626

 

 

Auto Allowance - City Manager

$5,000

 

 

Bilingual Pay

$3,600

City Paid 401(a)

$2,667

License Differential

$2,456

Cell Phone Allowance

$1,400

Taxable Fringe Benefits

$750

Smog Differential Pay

$404

 

 

TOTAL

$69,003




Comments


Other Wages provides a Window into the many "deals" put into the various employee contracts. They range from police telephone pay (for payphones?) which serve no purpose today to highly abusive ones such as Longevity Pay, Paramedic Certificate, Clothing Allowance , Educational Incentives and Holiday Buybacks ,all of which are PERSable. In additional there was $1,225,868 for buyouts of vacation and sick leave.


To be blunt those in CAMP should be ashamed. While they want to be considered management they have done nothing to help the City's financially even though they are well compensated. CAMP continues to fly under the radar by getting 100% of their health care paid by the City and making sure that 80% of their retirees health coverage is paid for by the City. In addition they continue to get 5% Management Incentive Pay which is not offered by most cities as well as Longevity Pay.


To date VPOA has not made any concessions despite having archaic and numerous abusive "other wages" . Hopefully they will see the light before contract negotiations reach impasse.


Other Wages are great example of how an expense that seems reasonable on the surface carries forward year after year into a cumulative increase in already unaffordable pension expenses facing cities all over California today; pension expenses paid to retired employees for decades after they retire and who are no longer contributing to the city. Furthermore, newly hired employees are being given smaller pensions and at a lower rate. The cumulative effect of exceptional pension fattening makes it impossible for current pension contributions to “catch up” with the unfunded pension liability.





GLOSSARY OTHER WAGES


Below is an explanation of specific "Other Wages"


Bankruptcy Settlement --IAFF ($2,100,000)

"The City set aside $6 million into the bankruptcy claims pool. From these funds, we paid IBEW $1,650,000 and their lawyer $450,000 for a total paid to IBEW of $2.1M. We paid IAFF $2,100,000 and their lawyer $900,000 for a total paid to IAFF of $3M. The amount that was paid to each employee was provided by the union. IBEW was paid in 2011 and IAFF was paid in 2012". [email from Deborah Lauchner Finance Director]. VPOA settled separately for $1,000,000.


Cafeteria Plan ($1,880,695)

To get around paying 100% of a retirees healthcare insurance the City gives current employees and retirees.$300 per month for health insurance. For current employees a Cafeteria Plan was developed that pays the for the amount between the $300 and 75% to 80% of the cost of a Kaiser HMO plan. VPOA members (police) and CAMP (management) continue to have 100% of their health insurance paid for. The remaining employees have 75% of their health insurance paid for by the City..


Holiday Buyback ($689,029)

Holiday pay is in lieu of taking time off for the holiday. Employees in Fire, Police, Water Plant Operators and Communication Operators are most likely to use this buyback. They receive time and half for all holidays even though the odds of working a holiday varies from 71% for IBEW, 57% for VPOA and 33% for IAFF.


Management Incentive Pay ($326,858)

Employees in the CAMP bargaining unit receive a 5% bonus. Unlike Vallejo most Cities do not offer this benefit.


Medical Flex ($261,394)

Medical Flex pay is given to employees who elect not to use the City's health insurance plan as they have other coverage. The amount per month varies from $250 to $600 depending on the bargaining unit.


Uniform allowance ($165,811)

Employees in Fire ,Police and those in IBEW who wear uniforms receive an allowance to defer the cost of their uniforms and keep them clean and in good repair. although the City pays for this benefit it is considered part of their wages.


Differential Pay ($128,183)

Examples of differential pay include covering for a co-worker who is out for an extended period,

workload increase, performance of higher-level duties or performance of duties outside of current classification.


Standby Pay ($63,524)

Employees in IBEW receive one hours pay for every 8 hours of standby and 4 hours if standing by for 24 hours.. Police receive 1.5 hours for each 8 hours and 3 hours if standing by between 5PM and 830AM.


Acting Pay ($158,908)

An employee is paid at a higher rate for filling in, typically for a manager/supervisor etc.


Longevity Pay($63,798)

VPOA (police) and CAMP members with 20 years of service (8 years can be somewhere else) receive a 5% bonus and those with 25 years of total service receive an additional 10% of their base salary.


Mayor Expense Allowance ($19,800)


Paramedic Preceptor Pay($18,814)

Vallejo Firefighter/Paramedics who are certified as Preceptors( trainers) in Solano County are compensated on a monthly basis at five percent (5%) above their base salary.


Canine Pay ($23,045)

Canine Officers receive pay for the care and feeding of their K9 dog. The contract specifies these expenses must have advanced approval. In the past 7.5% of an officers base salary was used.






Mask Room Pay ($9,838)

Two firefighters are assigned to repair and maintain breathing apparatus. They receive per month 5% of the top step of a Fire Engineer base salary.


Educational Incentives Chiefs Only ($12,998)

Police and Fire Chief receive 5% bonus for advanced courses such as POST or a Bachelors degree


Meal Allowance ($5,905)

As an example the maximum amount a police officer out of town can charge per day for meals is $33.62 .


Telephone Allowance ($7,046)

Police officers receive $6.53 per month to maintain a telephone and/or possibly pay for Pay Phone calls. .


Firearms Qualification Pay ($5,520)

Police are paid for the cost of bullets etc to be recertified with their firearms.


Bilingual Pay ($3,600)

Police and Fire employees whose position qualifies for bilingual pay and pass an exam receive a 1% increase based on their base pay.IBEW members receive $75 per month.




Other types of pay


Computer Support A bonus of 5% of base salary is paid for maintaining fire department computer network etc.


Hazmat Pay Fire department employees in the Hazmat team receive a 5% incentive which is included in their base pay.


EMT/Paramedic Pay Those with an EMT certificate receive a 5% incentive pay and those with a Paramedic Certificate 10% (which is included in an employee's base pay).


Motorcycle Duty Motorcycle Officers receive 2.5% incentive pay which is included in their base pay.


SWAT Team Police officers on the SWAT team receive a 1% bonus which is included in their base pay.


Education Incentives for Police and Fire Depending on the number of additional POST or Fire Officer Certification courses taken( or obtaining an AA or Bachelor degrees), employees receive a 3.5% or 5% incentive that is included in their base pay.


Call Back Pay

From IBEW MOU Section 2.2 E. Overtime.

Employees who have completed a regular work shift and are called back to work shall be paid at the overtime rate and shall be paid a minimum of two (2) hours.


Section 2.4 Stand-by From VPOA MOU Section 13.B

Call Back - Employees called back to duty during off-duty hours shall be compensated at the rate of time and one-half for all hours of such call back with a minimum of three hours compensation. This minimum shall not apply when an employee is called back to duty within one (1) hour of a scheduled work shift. In this case, the employee shall receive one hour pay at the rate of time and one-half.