July 14, 2010: County Report Finds Municipal Employee Compensation Out of Line with Economy, Cost of Living, Municipal Revenues

By Carolyn Schuk

Once upon a time, public sector workers earned far less than employees in private businesses. In return, civil service employees received generous benefits. A 2010 study by the Santa Clara County Civil Grand Jury, "Cities Must Rein In Unsustainable Employee Costs," finds that today's public sector wages and benefits have grown "dramatically" over the last decade, and total municipal compensation "is out of sync with private industry and…unsustainable."

Between 2000 and 2010, the median salary and benefit package for regular

municipal employees in Santa Clara County cities grew between 32% and 93% –

averaging 61%.

The Grand Jury surveyed 15 South Bay cities and found consistently increasing compensation, even though revenues and services are declining across the board. Although the economy has plummeted, compensation – wages, health care benefits, vacation, holiday and sick leave are all growing at substantially faster rates than the local economy and municipal general fund revenues, according to the report.

Between 2000 and 2010, the median salary and benefit package for 

municipal public safety employees in Santa Clara County cities grew an average 

of 41%. Figures for 2000-2001 not available.

Between 2000-2009 the Bay Area's Consumer Price Index increased of 27 percent – averaging 2.7 percent annually. By comparison, during the same period the median total compensation – salary and benefits – for regular (non-public safety) municipal employees increased 37 percent (to $113,704 from $71,379). Public safety employees (police and fire) registered 41 gains in total compensation (to $173,714 from $102,646).

Communities cannot sustain these costs, the report says, and local elected governments need to bite the politically unpalatable bullet of containing them. The Grand Jury's recommendations include:

• Reduce costs by contracting with private businesses, and partnering or consolidating with other cities, special districts or the County for services.
• End the practice of approving contracts with public employee bargaining units – unions – by a single motion and vote as part of the consent calendar. *
• Subject negotiations with employee bargaining units to public scrutiny and approval by conducting well-advertised public hearings both before and after negotiations, specifically reporting the terms of each contract.
• Cities that have binding arbitration agreements (specifically San Jose) should open those negotiations to the public and their Councils should ask voters to repeal binding arbitration measures.

Read the entire report here.

*A "consent calendar" is an umbrella agenda item that groups routine agreements and resolutions together for a single motion and vote. As the name implies, there is a generally agreement on these items.