Bennies from Heaven

 Angelic Perks and Golden Fringies for City Employees

By Robert Schussel, Ph.D

5/20/13

Purpose

To analyze the cost to Vallejo of the benefits (health insurance, employee assistance program etc) that employees receive. Most of these benefits are available at no cost to City employees.

Caveats

1) The cost of benefits are for calendar year 2012.

2) As the number of employees receiving cafeteria plan monies was not provided an estimate of 410 employees was used.

3) The cost of holidays, vacations, and sick leave were not included in these analyses.

4) The General Fund budget was estimated to be approximately $82,000,000. It was based on the average of fiscal years 2011/12 and 2012/13.

5) Retiree Health costs increased by $16,928 over the prior year for each VPOA employee and $7,148 for each CAMP (Confidential, Administrative, Managerial & Professional Association)* employee.

In retirement, CAMP employees pay 20% the cost of their health insurance while VPOA retirees get their health insurance for free. All other retirees receive $300 per month.

6) In the 1980s cities were given the opportunity to stop offering Social Security if they offered CalPERS (California Public Employee Retirement System) benefits.

Since Vallejo did not opt out, it must offer Social Security (i.e. employee and employer split contribution) Only 2 or 3 other cities in the area did not opt out.

Background

As in the private sector the City of Vallejo offers its employees a variety of benefits that range from paid holidays to health insurance. This is the first year that IBVallejo.com has been provided separate breakouts for all of the benefits offered.

Findings

1) Without pension contributions the City spent $17,650,807 on various employee benefits. The average cost of these benefits was $37,829 per employee. The inclusion of pensions ($12,447,113) increased this amount to $30,097920. (see table below--the City contributes 100% of the cost for bold items)

2) Unlike Vallejo, many cities do not offer Social Security to their employees (cost to City $1,229,247). Because Vallejo did not opt in the 1980s, Vallejo it is now required to offer Social Security to all non public safety employees .

3) The City spent $67,921,942 or approximately 83% of the General Fund budget for employee wages and benefits.

4) Worker Compensation costs are significantly higher for Public Safety workers --an estimated $16,588 per VPOA employee and $27,831 for IAFF. Part of the higher cost for firefighters is due to a high percentage of individuals going out on disability the year before they retire.

Comments

The City could save at least a half million dollars per year in current benefit costs if all employees had to pay for some of the cost of their health ,dental and vision insurance.

With the significant increases in the cost of health ,vision and dental insurance shouldn't all employees help pay for these generous benefits?

Camp, Exempt and IBEW (International Brotherhood of Electrical Workers) employees get two pensions (Social Security and CalPERS ). The CalPERS plan should be reduced for new employees to reflect the value of the Social Security plan they will be receiving.

Final thoughts

In more progressive private sector companies, employees pay a different cost for major benefits (such as health insurance) based on their salary. For example employees earning under $80K might pay for 15% of the cost of their health insurance and more highly compensated might pay 25% to 30% of the total cost. This is a much fairer system and I don't understand why the City is unwilling to consider it.

As is obvious from this article and others, different bargaining units have different deals for almost everything. It is time that a single benefit structure be adopted . Benefits should be identical no matter what bargaining unit one belongs to. Vacation and sick leave need to be standardized . If educational incentives etc. are offered (which I think is a bad idea) it should be offered to everyone. The percent contribution structure for healthcare etc. should be the same across bargaining units.

It's time that the Unions stop their divide and conquer tactics and accept uniform employee benefits for all employees. Employees need to pay their fair share.

* city management and directors

Comments

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Anonymous   |May.24.2013 @wr Get mad at the past HR and post strike CM for the "scam". It was their idea, their proposal, with that said, it appears to be going away. Wonder why such a concept was ever proposed it in the first place?

wharf rat   |May.23.2013 Pay outs on unused sick leave is a scam sickleave is a bennifet that should only be used when needed and they should be damed glad to have it . Unused sickleave should be pooled and used as needed the remainder should return to the general fund . These huge payouts on retirement are criminal they already enjoy a gravy retirement wth .

Mark Twain   |May.23.2013 There are liars, damned lairs, and staticians!

Anonymous   |May.23.2013 @cause of bankruptcy The "perks" you mention (1. disability and 2. unused sick leave) were a product of either 1. state law or 2. an idea proposed by the COV HR negotiator. Just info

Anonymous   |May.23.2013 Under caveat #2 What exactly does it mean 'employees receiving monies'?

wharf rat   |May.22.2013 @ Anon perhaps You confuse Unions with PAC's .. The word Union means "many comming together" Our Employee PAC's are just that (political action commities) only out for what their membership can gain through the political process . They are in no way like a traditional trade Union , with the associated Aprentiship and continuing education process with democratic representation of the Members . Political action commities are just a special interest group plain and simple ... City Government should not aknowledge PAC's it is a conflict of interest and not Democratic ....

Anonymous   |May.21.2013 The power of the VPOA and IAFF in Vallejo is due to the fact this city is 90% democrats. Don't upset the unions. COme on. No one wants to break the union. They are needed. BUT WE CAN'T AFFORD THIS. It's a straight revenue/expense analysis and crying, get more revenue in thecity, does not change the fact we cannot afford this now. We can't pay what VPOA and IAFF want us to pay or cry should be paid if more business came into the city. WE WENT INTO BK WHEN WE WERE AT 80% SALARIES/BENEFITS/CAL PERS. WE ARE NOW AT 83% OF OUR GENERAL FUND THE SAME THING.... COME ON, GUYS. DO SOMETHING AND DO IT THIS YEAR.

It's. a D thing   |May.21.2013 Going on disability a year before retiring has nothing to do with the city contract. That state law and if an employee gets a doctor to sign, the city is powerless. It's grossly abused and yet nothing will change until the laws change. And that won't happen because in California the state Dems are controlled by the unions and their campaign money. The unions are basically writing the bills and then getting weak Dems to carry their water and getting them passed. Just look at Noreen Evans, the biggest fake sellout of them all. I'm a Dem and am ashamed of our state leaders. It's disgusting.

Anonymous   |May.21.2013 You must vote out progressive democrats at the congressional level if you want this to change. It's the only way to break the stranglehold of union money corruption in politics.

cause of bankruptcy   |May.21.2013 Such staggering costs -- no wonder we went bankrupt. I hope the City is negotiating hard to get better deals, and to eliminate the "only in public sector" kind of perks -- like going on "disability" a year before retirement, or getting huge pay-outs for "unused" sick leave. We can't afford these kinds of benefits and wages. Plus, they are totally out of synch with what the average person makes in Vallejo. A platinum retirement, all costs funded? A lot of us struggle to put together a living wage now, let alone in "retirement." Vallejo has enabled a class of workers with royal privileges, living WAY better than the rest of us. We can't afford it, and it isn't fair.

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