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Public Safety Salaries

          Why Are They so High?

02/20/2008

 By Paul Norberg--Retired CFO (With Glitter Sprinkles from Katy Miessner--Aging Disco Queen)

 

 

 

A History of Union Negotiations

We often hear that Vallejo’s public safety salaries—Fire and Police pay—are among the highest in the Bay Area and even the state. For a city with a low tax revenue base, with median household income among the lowest in the Bay Area, and with fire risk not different than other cities, how did  this happen? 

Here is a little history of our public safety contracts. They were originally negotiated in 2000 and covered the years 2000 to 2005 and then were extended to 2010.

In 2000, when the current Public Safety Union contracts were negotiated with the Fire and Police Unions, the City agreed to set union salaries at 10% higher than 14 surrounding cities and fire districts. If this weren’t bad enough, the 14 cities include affluent cities such as San Mateo, Santa Clara, Berkeley and Palo Alto, but exclude neighboring cities that are more like Vallejo: Fairfield, Vacaville and Napa. Future increases were based on the average increase of the 14 cities, so Vallejo would theoretically always be 10% higher than the other 14 cities. 

Also, in 2000, pension benefits were increased—apparently the City received no concessions in return.  This increase now allows a union employee to retire with a pension equal to 90% of their final year’s pay if they had 30 years of service plus a 2% CPI increase every year. Consider what this could cost for only one fire captain; let’s say “John Doe” started working in Vallejo as a firefighter at age 25.  He is required to contribute into his pension; 9% of his salary or an estimated $207,000 over his 30 years of service.  But if he retires at age 55 and then lives  another 25 years, the City will have to pay his pension that will total almost $4.3 million after John Doe’s contribution.  And that’s only one employee.

And even when the fire and police union contracts were signed in 2000 the city couldn’t afford the high base salaries, so a pattern of deferral was started.  Deferrals do not mean that fire and police employees give up raises completely; it means the raises are merely postponed to a future year.

The attached chart (scroll down) shows the increases and deferrals that were negotiated each year

The contracts were amended twice in 2003 and because the unions agreed to defer a portion of their raises, the City agreed to extend the contract until 2008 and added:

  • 10% increase to pay for employees with 25 years of public safety experience, whether or not  the employee worked those years in Vallejo or another City.
  • 5% increase to pay for employees with for those with 20 years experience, whether or not the employee worked those years in Vallejo or another City. The experience could be with any city, so it rewarded all prior service not just service in Vallejo.  37% of the firefighters and 27% of the police officers were receiving this extra pay in 2007.
  • 5% increase to pay for Haz-Mat work
  • 1% increase to pay for bi-lingual experience
  • The maximum vacation accumulation was increased from three years to four years
  • Union business leave was increased from 180 hours per year to 600 hours per year
  • Extra 1% increase effective 7/1/05
The increase to Union Business Leave set up the opportunity for abuse that was outlined in a  report to City Manager Joe Tanner in 2007. See our full report on Union Business Leave
 
It is also interesting to note that the 600 hours of union business leave is in addition to any hours that union representatives spend renegotiating the contracts during their normal work schedule.

Who is responsible for all of this? It’s hard to say. The original contract was drafted in 2000 by City Manager David Martinez and unanimously approved by a mayor and council. Why they approved it is not clear but here are some things to consider:
  • Asst Fire Chief Kurt Henke already filed defamation suits against council and community members. Maybe the council seated at the time was intimidated by this.
  • Possibly some council members were influenced by generous Fire and Police Union campaign contributions,
  • Perhaps Martinez projected future revenues that never materialized—maybe even the LNG plant?—which were to pay for these increased costs;
  • Perhaps council members realized that with binding arbitration in place in Vallejo, if the City  and the Unions couldn’t come to an agreement, the City would have no choice but to go into binding arbitration which is traditionally more favorable to unions and not to cities;
  • Perhaps the Council realized that there was (is?) no political will in Vallejo’s voting populace to support the council in stopping the practice of excessive pay and benefits and/or getting rid of binding arbitration;
  • Or perhaps the Council simply wanting to avoid controversial issues and discussions that seemed to plague the mayor and council prior to 2000.

The contract amendments in 2003 were again drafted by City Manager David Martinez, and unanimously approved by a mayor and council that really had not much of a choice because they needed the savings. Fire and Police contracts weren’t up until 2005.  The City’s only option would be to enter into binding arbitration and that would have looked like a long shot.

In 2004 Interim City Manager Otto Giuliani was facing another budget crisis and went back to the public safety unions for help.  The Contract was amended in 2005, and they agreed to defer the 4.5% raise due in 2004 to 2007, and added an additional 1% increase in 2005. In return for the deferrals, the City also agreed to extend the contract to 2010.  This was   approved by the Council and again, unfortunately, at this point they really had no choice since the contract was already extended until 2008.  The unions could simply agree to nothing at all, so the council had to take what they could get unless they entered into binding arbitration.

By July 2007 all the deferrals finally came to roost and the city had to face an increase of 8.5%.  Remember, the deferrals only postponed the raises.  Compare raises for the Fire and Police  unions to other city unions: from July 2000 to July 2007, fire & police employees received increases totaling 45.6% while other city employees received between 15.6% and 18.4%, and did not defer any raises due to them.

Then compare this to the consumer price index to really see how askew the raises Vallejo gave to fire and police. It went up an average 3.2% per year during the eight year period. Public safety salaries went up an average of 5.5% during the same time.  Other city employee raises were actually less than the consumer price index, theirs went up an average of 2.0% to 2.3%. 

July 2007—the City is at its lowest point in years, with a plummeting housing market and related revenues, and facing 8.5% raises to Police and Fire.  Knowing that any concessions would still not help the City get out of its fiscal crisis, the majority of the council voted not to accept the Fire Union’s meager concessions and chose to enter into binding arbitration.

How did the public safety unions manage to negotiate a better deal than the other city employees? A deal that is essentially unfounded in other job sectors? Perhaps their large contributions to selected council members explain it.

Our current council consists of a majority of members who received contributions from Fire and Police Unions—some contributions so large they broke records. These members are Bartee, Hannigan, Sunga and Wilson.  With a current council majority influenced by fire and police unions, we will probably see more of the same: extremely generous pay and benefit packages, and an extension of these contracts beyond 2010.

And if the Council does this—and does not take drastic action such as bankruptcy and/or challenge the binding arbitration decisions in court—the current council will continue to commit any potential increases to City revenue to already bloated Fire and Police pay and benefits. This will leave nothing for other causes and will only heap drastic City debts upon the backs of future Vallejoans for years to come. 

 


  Vallejo Salary Increases          

Effective

 

Date

CAMP

EXEMPT

IAFF

IBEW

VPOA

 
 
07/01/2000 2.00% 2.00% 6.50% 3.60% 6.50%  
01/01/2001 2.00% 2.00% 0.00% 0.00% 0.00%  
06/30/2001 1.50% 1.50% 0.00% 0.00% 0.00%  
07/01/2001 5.00% 5.00% 8.46% 5.00% 8.46%  
07/01/2002 0.00% 0.00% 6.38% 0.00% 6.38%   Safety Positions in CAMP & EXEMPT 4%  
10/01/2002 4.00% 4.00% 0.00% 2.10% 0.00%   Safety Positions in CAMP & EXEMPT 0%  
07/01/2003 2.10% 2.10% 4.09% 1.60% 4.09%   Safety Positions in CAMP & EXEMPT 3%  
07/01/2004 -5.00% -10.00% 0.00% -5.00% 0.00%   13 to 26 days furlough leave with no pay  
07/01/2005 3.00% 3.00% 5.92% 4.00% 5.92%  
07/01/2006 3.00% 3.00% 5.73% 4.00% 5.73%  
01/01/2007 0.00% 3.00% 0.00% 0.00% 0.00%  
07/01/2007 0.00% 0.00% 8.50% 3.10% 8.50%   Safety Positions in CAMP 8.5%  
Total 17.60% 15.60% 45.58% 18.40% 45.58%  
Yr Avg 2.20% 1.95% 5.70% 2.30% 5.70%  
     
Source - budget detail package included with city council agenda for 12/18/2007 meeting  
  • CAMP = Confidential Administrative Managerial Professional
  • EXEMPT = Senior Managers/Department Heads
  • IAFF = International Association of Firefighters
  • IBEW = International Brotherhood Electrical Workers (this is the union that represents most of the nonmanagerial city employees other than public safety
  • VPOA = Vallejo Police Officers Association
  • 07/01/2000 - based on salary survey plus 10%, but limited to 6.5%. Deferred 2% to 2001, 1.5% to 2002, 1% to 2003
  • 07/01/2001 - salary survey increase plus 2% from 2000
  • 07/01/2002 - salary survey increase plus 1.5% from 2000(scheduled to get 9.38%, but deferred 3% to 07/01/2003
  • 07/01/2003 - salary survey increase plus 1% from 2000 (took 4.09% and deferred 2% to 07/01/2004, 2% to 07/01/2005 and 2% to 07/01/2006) also added an additional 1% on 07/01/2005
  • 07/01/2004 - salary survey increase of 2.5% plus 2% deferred from 07/01/2003 then entire 4.5% deferred to 07/01/2007
  • 07/01/2005 - salary survey increase of 2.92% plus 1% plus 2% deferred from 07/01/2003
  • 07/01/2006 - salary survey increase of 3.73% plus 2% deferred from 07/01/2003
  • 07/01/2007 - salary survey increase plus 4.5% deferred from 07/01/2003. An additional 2.5% is also due based on late salary survey increase plus 4.5% deferred from 07/01/2003. An additional 2.5% is also due based on late reporting cities which would bring 07/01/2007 to 10% for fire and police.

Note that CAMP, EXEMPT and IBEW took a decrease at 07/01/2004 and took no increase at 07/01/2002 and 07/01/2007

Consumer Price Index for San Franciso Metropolitan Area (source US Department of Labor)

06/30/1999    171.8
06/30/2007    216.1

Increase of 25.8% total with a per year increase of 3.2%