DMV supervisor unaware that sleeping on the job for 4 years straight requires disciplinary action

The most robust study ever conducted on the topic found that the average California state government worker earned 23 percent more in total compensation than their similarly skilled and educated private-sector counterpart.

That number rose to 33 percent above their private-sector counterpart, when the value of California state government workers’ legendary job security was included. But a recent report by the California State Auditor leaves one with the impression that the study vastly underestimated the true value of job security for government workers.

In February of 2014, a DMV employee was documented by her supervisors for sleeping at work. According to four separate witnesses, the employee continued to sleep at her desk for a minimum of three hours a day, for nearly 4 years straight.

The most mind-boggling part of this story is that there is no dispute that this employee was sleeping on the job, every day, for nearly 4 years.

In addition to the four witnesses, her daily sleeping was also documented by her supervisors in written, periodic performance evaluations, which the employee signed off on without disputing any of the factual allegations contained within.

When the state auditor got involved midway through 2017, the employee’s supervisor defended her failure to perform her core duty by claiming that “because she woke up the employee three to four times each day, she believed the employee missed only 20 to 30 minutes of work time daily.”

The auditor rejected the obvious falsehood that an employee who needed to be woken up “three to four times each day” somehow missed only 20 to 30 minutes of work.

The auditor instead found that the employee slept for at least 3 hours a day from February 2014 through December 2017 — a finding consistent with the statements provided by four separate witnesses and the fact that the employee’s work output was only 35 percent of the amount expected.

That 35 percent figure just reflects the number of reports the employee turned in, compared to what was expected. If we’re measuring productivity or value, it’s possible the employee was actually a net negative to the department, given what her colleagues and supervisors had to say about the few reports she did turn in:

Further, the employee’s evaluations mention that she made mistakes when entering data. In fact, during the investigation, a witness explained that the employee’s work was often so inaccurate that the witness would not trust the employee to accurately enter the witness’s own address or vehicle ownership change. Thus, the employee’s behavior may have prevented DMV from providing the public with an appropriate level of service.

So what was the final outcome? Despite sleeping on the job everyday and producing error-filled work for 4 years, the employee received no disciplinary action of any kind, and continues to collect her full salary and benefits.

What’s much worse, in my opinion, is the gross negligence of the supervisor. The DMV is a large employer. There will be some bad apples. Moreover, if an employee who is sleeping at their desk everyday receives no penalty of any kind, it’s not terribly surprising they never change their own behavior.

So what happened to the DMV supervisor who, by her own admission, did not take any disciplinary action against an employee that she needed to wake up three to four times a day, every day, for 4 years?

Nothing.

While the auditor recommended that the DMV take disciplinary action against the supervisors, the DMV countered that because they had no prior issues, they would instead only require that the supervisors undergo training to ensure they understand that employees who sleep on the job every day for four years should be disciplined, should such a situation arise in the future.

And that is why so many are critical of government. It’s not because this story is reflective of government employees generally — it’s not. The audit only occured because of the employee’s coworkers who blew the whistle.

The continually justified criticism of government, however, is that it is a grossly negligent and irresponsible steward of taxpayer dollars — something perfectly reflected in the DMV’s response to the auditor’s findings.

Marin County promised pension benefits up nearly 1000%, dwarfing rate of economic growth

The total pension benefits promised by Marin County increased 982 percent from 1986-2016 — a rate 58 times greater than the cumulative increase in the county’s population, according to a just-released analysis from Transparent California.

Last week, Transparent California released Nearly 900% increase in CalPERS benefits dwarfs economic growth, taxpayers’ ability to pay, which analyzed the state pension fund.

Marin County, however, belongs to the Marin County Employees’ Retirement Association (MCERA), and is thus separate from CalPERS.

Applying the same methodology as used in the CalPERS analysis reveals that promised Marin County benefits grew even faster than CalPERS, as shown in the chart below:

MCPensionGrowth2

The below chart reflects the cumulative growth in Marin County’s promised pension benefits (accrued liabilities) alongside a variety of Marin County economic metrics:

Marin County Indicators Growth from 1986-2016
Promised Pension Benefits 982%
Personal Income 377%
Median Household Income 167%
Inflation 139%
Population 17%

Data sources:

  • Promised pension benefits reflects the growth in accrued liabilities for the County of Marin and related Special Districts, as reported by the Marin County Employees’ Retirement Association (MCERA).
  • Marin County personal income “is the income that is received by all persons from all sources,” calculated and reported by the U.S. Bureau of Economic Analysis.
  • Median Household Income data was provided by the U.S. Census Bureau. The Excel Trend function was used to fill in years in which data was unavailable.
  • Inflation is derived by calculating the growth in the Consumer Price Index for All Urban Consumers: All items in the San Francisco-Oakland-Hayward, CA region.
  • Population data was provided by the U.S. Census Bureau.

For more information, please contact Robert Fellner at 559-462-0122 or Robert@TransparentCalifornia.com.

Transparent California is California’s largest and most comprehensive database of public sector compensation and is a project of the Nevada Policy Research Institute, a nonpartisan, free-market think tank. The website is used by millions of Californians each year, including elected officials and lawmakers, government employees and their unions, government agencies themselves, university researchers, the media, and concerned citizens alike. Learn more at TransparentCalifornia.com.

Marin union votes to strike

Despite the fact that local government workers in Marin County receive wages higher than local government workers in over 99 percent of counties nationwide — even after adjusting for regional cost differences among the 50 states — the largest government union in Marin has formally authorized a strike, according to the Marin Independent Journal.

The dispute centers over the size of pay raises that will be provided over the next 3 years, as well as other unknown conditions. The unknown conditions reflect the fact that state law shrouds government union negotiations in secrecy, ensuring the taxpayers responsible for paying the entire cost of the eventual contract are kept in the dark.

The Marin IJ also reported that a salary survey revealed that Marin County workers are paid, on average, 7.8 percent higher more than their government peers in the Bay Area.

And this is on top of non-wage benefits (like job security, number of paid leave days, retirement benefits and health insurance) that are all significantly greater than what the average private-sector worker receives.

It is an uncontroversial fact that one of the defining features of a monopoly is its ability to obtain excess wages/profits, at the expense of social welfare.

This is true even when the monopoly in question is a labor union.

Thus, a willingness to strike despite receiving pay and benefits that are already significantly above market levels — even when that market is restricted to only other Bay Area governments — is an entirely predictable, and even rational action from the perspective of the monopoly union.

Absent a change to the state laws that grant government unions coercive, monopolistic powers, it is likely that Californians will continue to see their taxes raised in order to fund the demands of government unions.

Despite wages that rank in the top 1% nationwide, Marin union considers striking

The average wage for Marin County local government workers is richer than what their peers in 99.8 percent of counties nationwide receive, according to new wage data released from the federal Bureau of Labor Statistics (BLS) last week.

In 2017, local government workers in Marin County received an average annual wage of $76,138 — which ranked 6th out of the 2,867 counties surveyed nationwide, and was 53 percent higher than the $49,712 received by local government workers nationally.

Remarkably, even after accounting for regional cost differences among the 50 states, Marin County local government workers’ average wage still ranked firmly within the top 1 percent of counties nationwide, placing 8th out of the 2,867 counties surveyed.

Accounting for regional cost differences was achieved by adjusting the nominal wages received by each state’s 2016 Regional Price Parity, as calculated and reported by the Bureau of Economic Analysis.

For example, Marin County’s average was of $76,138 was reduced to $66,554 to account for average prices in California that were 14.4 percent above the national average, according to the BEA.

As indicated above, after a similar adjustment was made for all 2,867 counties nationwide, Marin County’s RPP-adjusted average wage for local government workers ranked 8th highest nationwide.

Government wages as % of private

In addition to outranking their local government peers in over 99 percent of counties nationwide, Marin County local government workers’ wages were significantly above average when measured against private-sector earnings.

Nationwide, average local government wages were 10 percent below private-sector workers. In Marin County, however, local government received an average wage that was 13 percent above what Marin County private-sector workers earned:

GovtvsPrivateNat.png

Similarly, while Marin County private-sector wages were 6 percent above private-sector wages nationally, Marin County local government workers’ wages were 34 percent higher than local government wages nationally:

GovtvsPrivateNat2

Why government pay matters

Because employee compensation is by far the single largest category of government expenditures — accounting for nearly 70 percent of Marin County’s general fund budget — it is critical that taxpayers have complete and accurate information regarding the government pay packages that they are required to fund.

While the BLS data reflects all local government workers in Marin County and not just those employed by the County of Marin, it is nonetheless a strong indication that county wages are already at very competitive levels.

This is particularly true given the average $86,629 wage[1] received by County of Marin employees — excluding police and fire officers — was significantly above the $76,138 reported by the BLS for all local government workers in Marin County.

Beyond Wages

In addition to wages, compensation for Marin County employees includes employer-paid health and retirement benefits, paid leave, job security and retiree health benefits.

Because the terms of benefits vary by collective bargaining group, this analysis will focus solely on the Marin Association of Public Employees (MAPE) General Bargaining Unit, sometimes referred to as “rank-and-file” workers.

In addition to being Marin County’s largest bargaining group, an assessment of these workers overall compensation is particularly relevant given the union has called for a strike vote over allegedly insufficient pay.

Like all government workers, Marin County employees receive significantly greater levels of job security than their private-sector counterparts. Academic research has estimated the job security premium for California local government workers to be worth between 5 and 15 percent of wages.[2]

Marin County government workers also receive significantly richer amounts of all non-wage benefits than the average private-sector worker[3], as shown below:

Type of Compensation

Average Private Sector

Marin County Government

Marin County Government vs Private

Employer-Paid Retirement, as a Percent of Wages

5%

22%

+320%

Employer-Paid Share of Employee Medical Premium

$5,310

$12,011

+126%

Employer-Paid Share of Family Medical Premium

$12,840

$18,843

+47%

Paid Holidays

7

14

+100%

Annual Paid Sick Leave for 10+ year employees

8

12

+50%

Annual Paid Vacation Leave for 10-20 year employees

17

20

+18%

Annual Paid Vacation Leave for 20-30 year employees

20

25

+25%

The cause

Such outsized pay packages for California’s local government workers — and the burden they impose on the taxpayers who, on average, earn much less themselves — are the inevitable result of the state’s mandatory collective bargaining laws.

Because California state law forces local governments to bargain with a single government union, the union is able to wield this monopoly power to push labor costs well above market prices — a cost that is then passed on to captive taxpayers.

Adding insult to injury is the fact that these negotiations are done entirely in secret — ensuring that the taxpaying public is shut out of the process entirely.

Unsurprisingly, this arrangement has resulted in about $10 to $20 billion annually in added costs to California taxpayers, according to the most comprehensive study ever conducted on this issue by scholars at the Heritage Foundation.[4]

The current landscape is a result of the profound differences between unionization in the public and private sectors — which is why, historically, the idea of government unions was widely opposed by economists, policymakers and politicians on all sides of the ideological debate.

In addition to well documented opposition from traditionally pro-union policymakers such as President Franklin Delano Roosevelt, even labor unions themselves historically opposed the concept of unionizing government workers.[5]

For example, in 1955, AFL-CIO President George Meany said, “It is impossible to bargain collectively with the government.” Four years later, the AFL-CIO executive council passed a resolution declaring that, “In terms of accepted collective bargaining procedures, government workers have no right beyond the authority to petition Congress — a right available to every citizen.”[6]

So what changed?

As Geoffrey Lawrence and Cameron Belt document in The Rise of Government Unions: A review of public-sector unions and their impact on public policy, the shift towards favoring government unions didn’t occur because of any change in logic or analysis, but was simply the result of union bosses scrambling to find new dues-paying members in response to declining private-sector membership:

The American Federation of State, County, and Municipal Employees (AFSCME) was the first labor organization to explicitly acknowledge these points and to begin a systematic effort to bring compulsory collective bargaining to state and local governments. “Industrial unions seem to be at the end of a line…as more and more plants are automated,” and craft union membership “is growing only slowly,” the organization observed. “In public employment, however, there is an expanding reservoir of workers.”

While the original labor movement was created to prevent the exploitation of workers by profit-hungry corporations, no such justification exists for unionization in the public sector, which has neither owners nor profits over which to negotiate.

And because the government is funded via taxation, it faces none of the cost restraints found in the for-profit private sector. Private employers, on the other hand, are only able to generate revenue to the extent that consumers voluntarily purchase their goods or services.

Governments, by contrast, can finance above-market compensation by simply taxing the public. Most problematic is that the elected officials who approve these labor contracts bear none of the cost. In fact, these elected officials are routinely rewarded for doing so, as the concentrated political support bestowed upon them by appreciative government unions far outweighs the cost of taxpayers’ dispersed frustration.

On this point, Lawrence and Belt observe that:

Instead of resisting union demands, politician-employers have a keen interest in encouraging unionization among government employees because they can use government unions as political machines to secure election.

Thus, mandatory collective bargaining in the public sector has led to the very one-sided, exploitative arrangement that private-sector unions were originally designed to prevent — albeit with organized labor wielding the power, and the taxpaying public at large left largely powerless.

Given such a lop-sided power dynamic, it is little surprise that California’s public unions continue to push for more, despite already receiving compensation packages that, on average, significantly exceed market levels.

Illustrating the point

Despite belonging to the top 1 percent of counties with the highest-paid local government workers nationwide, in addition to receiving benefits that dwarf private-sector levels, the Marin County union (MAPE) recently rejected an across-the-board 7 percent pay raise over the next three years, and is demanding 11 percent instead (3.5 percent in FY19, 4 percent in FY20 and 3.5 percent in FY21).

It is worth mentioning that these across-the-board raises are on top of average yearly step increases of nearly 5 percent, which are available to employees who receive a “meets standards” or above assessment in their annual performance review and have not already reached the fifth step maximum.

So an employee still working their way up the step pay ladder would receive annual wage increases of roughly 7 percent under the county’s offer, and 8 to 9 percent under MAPE’s counter-offer.

As this example shows, government unions are not in the business of securing fair wages for workers who are being underpaid by profit-hungry employers. Instead, the incentives are such that most unions have one simple, unchanging goal: More.

Indeed, this approach is precisely what drove public compensation so far above market levels to begin with.

This is why, despite already having one of the highest tax burdens in the nation, municipalities across the state are seeking to raise that burden even further. And because the vast majority of these tax hikes — sales tax and fees for public services — are regressive in nature, it is precisely California’s lower- and middle-income residents who will fare the worst.


[1] Marin County Employees’ Retirement Association
Actuarial Valuation Report as of June 30, 2017.

[2] Jason Richwine and Andrew Biggs, “Are California Public Employees Overpaid?” The Heritage Center for Data Analysis, March 17, 2011.

[3] Employee benefits data for private-sector workers in not available on a state level, and thus this analysis uses national data for private-sector workers’ paid leave data and Pacific regional data for retirement and health benefits.

[4] How Government Unions Affect State and Local Finances: An Empirical 50-State Review, The Heritage Foundation, April 26, 2016.

[5] Cameron Belt and Geoffrey Lawrence, The Rise of Government Unions: A review of public-sector unions and their impact on public policy, Nevada Policy Research Institute.

[6] Ibid.

The Palo Alto City Council gets it!

The Palo Alto City Council is in the process of (hopefully) approving a proposal that would add transparency to negotiations with government labor unions.

I wanted to share the below excerpt from Monday’s city council meeting in which the proposal is discussed, as it represents a benchmark against which all other city councils should be measured when it comes to the issue of transparency in government:

The Council’s willingness to try and fix the the status quo of secrecy in government union negotiations is commendable, if not long overdue!

Hopefully more of California’s elected representatives will follow suit.

Madera mayor misleads residents in attempt to hide unjustifiable, excessive pay raises

Summary: The City of Madera is facing significant financial problems, with a general fund deficit projected for each of the next five years, rising from $1.7 million in FY2018 to $3.9 million by FY2023. Over that same time period, the city’s estimated annual pension costs will rise from $5.1 million to $8.5 million.

As employee compensation — salaries plus benefits — accounts for approximately 66 percent of the general fund budget, it is unsurprising that area residents concerned about the city’s fiscal health have started looking there.

Last month, an area resident discovered the city’s employee compensation costs for top administration staff had increased significantly over the past few years.

After the resident’s findings were covered in an ABC30 report, the issue received widespread attention, culminating in a full-length commentary by Madera Mayor Andrew Medellin in the Madera Tribune.

The mayor wrote that, in FY2015, the city approved a pay increase after a city-commissioned study found that the average Madera job paid 4.4 percent less in total compensation than the “market median” of the 10 other city governments surveyed.

However, the mayor described this pay increase as one that merely increased Madera compensation levels to the market median level. This is false.

The city did not merely increase compensation to the market median. Rather the city provided a pay increase to the market median, plus an additional 5 percent across-the-board pay increase to all employees, followed by an additional 3 percent across-the-board raise to all employees in FY2016 and FY2017.

Thus, the city provided an additional, 11 percent across-the-board pay raise on top of the raise to the market median.

All of these raises were authorized and approved in the same action at the start of FY2015, so it is unclear as to why the Mayor provided residents with only partial information.

Consequently, this analysis merely intends to provide Madera residents with the complete and accurate information they are entitled to.

In FY2015, the city approved a series of pay raises that produced cumulative raises ranging between 11 – 44 percent, depending on job classification. The average job classification received a 20 percent salary raise.

In aggregate, we estimate these raises will result in an additional $1.835 million in annual compensation costs.

We also note that the justification for these raises appears to be weak. There were no signs of staffing shortfalls or difficulty with regards to hiring and retaining employees. In fact, the mayor reported that the average management employee had been with the city for 14 years, a strong indication that the city does not have a retention problem.

Moreover, Madera, when measured on a variety of metrics, was the poorest of all the cities included in the survey. Thus, it is not terribly surprising that their compensation levels were 4 percent below the median. While a desire to increase to the median is not terribly surprising, why the council approved an additional 11 percent raise on top of that increase appears particularly hard to justify.

Background

Last month, a Madera city resident found that city administrators received a significant increase in their total compensation — pay plus benefits — over the past 5 years, despite the city’s growing financial concerns.

The resident’s findings sparked an ABC30 report, which generated significant attention and prompted a response from Madera Mayor Andrew Medellin in the Madera Tribune.

In his response, Medellin attempts to discredit the resident’s analysis by falsely claiming that the source of his data — TransparentCalifornia.com — was unreliable.

In fact, Transparent California’s data comes directly from the city in response to a request for employee compensation data under the same formatting and reporting guidelines used by the California State Controller’s Office.

So it was surprising to see the mayor allege that the information on our site “has no guidelines or procedures for reporting,” in addition to claiming that the cost of benefits is mistakenly reported as base pay — a demonstrably false claim that can be dispelled in the 5 seconds it takes to visit the website.

More troubling than the mayor’s poorly executed “smear the messenger” campaign, however, were his comments regarding the pay raises provided to city staff. In 2014, the city commissioned a study to compare the compensation it offered for various positions to the levels found at 10 neighboring city governments.

The study found that the average Madera job classification paid 4 percent less in total compensation than the middle-point (median) of the cities surveyed.

The mayor described the city’s response to this study as follows:

We agreed to meet the market median or in the middle of the comparison (median) when looking at the combined value of pay and benefits.

Some positions received a small increase while others were given a greater increase to meet the market median. Some didn’t receive a market adjustment at all.

As will be discussed later, the study was fundamentally biased in favor of higher pay and, even ignoring that, failed to justify the pay raises provided.

But in a commentary ostensibly designed to set the record straight about pay increases at Madera, the mayor badly misleads residents by omitting a key fact: the city didn’t merely increase salaries to meet the market median, they also provided an additional 11 percent pay raise in addition to and on top of that!

The Mayor’s omission of this point is particularly glaring given this additional raise occurred at the exact same time as the increase to the market median, as shown below:

unionmm

This cumulative 11 percent raise on top of the increase to the market median can be found in every union contract that the mayor and the rest of city council approved, as well as in the most recent budget. In fact, other than the mayor’s commentary from last week, there does not appear to be any reference to the market median increase that does not also immediately, and in literally the very next sentence, reference the additional raises provided.

As will be shown below, there is little compelling evidence to justify the pay increase to the market median on its own. But the 11 percent raise on top of that is particularly indefensible, something the mayor appears to recognize by his conspicuous omission of that fact.

Methodologically flawed study

There is no economically valid justification for conducting a salary comparison that is restricted to only other governments. While this is appropriate for the few government-specific jobs like police and fire employees, there is no legitimate basis for comparing the pay for common jobs like an administrative assistant, accountant, engineer, human resources staff, payroll specialists, secretaries, etc. exclusively to other governments. And precisely because California government workers already, on average, earn up to 30% more than their equally-skilled counterparts in the private-sector, such an analysis is guaranteed to only further that disparity.

Determining whether compensation is at an appropriate level should be informed by whether an agency is able to adequately attract and retain staff. As the mayor points out, the city has had no problem retaining employees, with the average management employee having been with the city for 14 years — hardly a sign of constant turnover and an inability to fill positions at the previous salary level.

And while it may sound reasonable to increase pay to the middle of the (poorly defined) market, it is worth emphasizing the obvious mathematical necessity that not everyone can be at the middle, and that half of all agencies surveyed must be below the middle.

It is precisely because of government agencies’ misguided desire to be at the middle of an arbitrary and misleading salary survey, along with the absence of the cost restraints found in the private sector, that public pay continues to rise.

For example, Madera’s recent pay increase now moves the median benchmark that much higher. As the now comparatively lower ranked agencies seek to match the recently-increased median, their efforts will also boost the median higher, thus perpetuating an ever-increasing race to the top, with only the degree to which taxpayers can bear this burden serving as the ultimate backstop.

Madera poorest of all cities surveyed

Even setting aside the issues raised above, the prudent response to the city-commissioned study, particularly in light of the city’s financial woes, was to simply do nothing.

As shown below, Madera, when measured on a variety of metrics, is the poorest of all the cities surveyed in the study.

City Average household income City Median workers’ earnings City Per capita income
Clovis $85,195 Clovis $34,552 Clovis $29,876
Manteca $75,246 Manteca $31,610 Turlock $24,582
Turlock $69,487 Hanford $31,508 Manteca $24,532
Hanford $68,098 Turlock $29,455 Lodi $24,267
Lodi $67,605 Tulare $27,202 Hanford $23,300
Ceres $64,587 Lodi $27,159 Fresno $20,141
Tulare $60,301 Ceres $24,264 Ceres $18,715
Fresno $60,242 Fresno $23,899 Tulare $18,707
Merced $55,940 Merced $23,207 Merced $18,415
Porterville $54,148 Porterville $21,439 Porterville $16,319
Madera $51,893 Madera $20,749 Madera $15,131
Average $66,085 Average $27,430 Average $21,885
Madera vs Avg -21% Madera vs Avg -24% Madera vs Avg -31%
Source: U.S. Census Bureau, 2012-2016 American Community Survey 5-Year Estimates, Selected Economic Characteristics

Thus, a finding that Madera’s average job pays 4 percent less in total compensation than its much richer neighbors is hardly a compelling reason for an across-the-board pay increase, and the corresponding burden such an increase imposes on area residents.

Given Madera has forecasted a multi-million dollar general fund shortfall that gets larger in each of the next 5 years, alongside a nearly 70 percent increase in pension costs, the city’s recklessness couldn’t have come at a worse time.

Yes, several Madera jobs paid less than what their neighboring, richer governments paid. The fact that Madera had no trouble filling these jobs makes clear that their previous compensation levels were more than adequate. Nonetheless, if even the very poorest city surveyed is unwilling to be one of those who must be in the bottom half of a salary survey, who will?

True size of the FY2015 pay raise

By comparing the just-released FY2017 salary schedule against the FY2014 salaries in place at the time of the study, we can measure the total impact of the pay raises approved at the start of FY2015 — which include the immediate increase to the market median plus an immediate 5 percent increase on top of that, plus an additional 3 percent increase in both FY2016 and FY2017.

In the summer of 2015, after learning that the average Madera city job paid 4 percent less in total compensation than the market median, the Madera City Council approved a series of pay raises that would provide an average 20 percent increase in base salary over the next three years. A complete table showing the cumulative pay raise for each classification can be found in Appendix I.

In aggregate, we estimate that this cumulative 20 percent pay raise will result in $1.372 million in additional annual salary costs, which totals $1.835 million when including the corresponding increase in retirement costs that accompany any salary increase.

How does Madera compensation compare now?              

As a result of these newly-increased salaries, total compensation for Madera jobs range from 2 percent above the market median to as much as 28 percent above for the city administrator. The average job went from being 4 percent below the market median to more than 8 percent above it. See Appendix II for the complete table.

There are two caveats to this finding. First, it does not factor in any increases that might have occurred at the comparator cities. Thus, it is likely that this would reduce the compensation premium reported if the assumedly higher 2017 salaries of the comparator cities were used.

Second, when calculating the value of benefits, we simply adopted the static dollar values used in the original study. But because higher salaries translate to higher retirement benefits, the value of benefits will increase correspondingly. Properly accounting for this would increase the compensation premium received for Madera employees.

We have not corrected for these two, slightly off-setting variables, as the purpose of Appendix II is to merely get a sense of the size of the cumulative, one-time increase approved in 2015, rather than providing a perfectly up to date comparison.

Conclusion

Madera’s general fund is expected to be in the red for each of the next 5 years, with a forecasted annual deficit that rises from $1.7 million in FY2018 to $3.9 million by FY2023. Over that same time period, the city’s estimated annual pension costs will rise from $5.1 million to $8.5 million.

The effects of the cumulative average 20 percent salary increase approved in FY2015 will be felt twice, with the higher salaries generating a corresponding increase in pension costs. In total, we estimate the FY2015 raise will cost the city an additional $1.835 million annually.

While it is fairly common for governments to provide pay raises by employing the seemingly reasonable, albeit profoundly flawed, approach of paying the “market median,” Madera went beyond that by granting all employees an additional 11 percent pay increase above and beyond the increase to the market median.

Madera residents deserve elected officials who are both responsible stewards of taxpayer dollars and transparent with their constituents. By voting for such an excessive and unwarranted pay raise, and then providing the public with misleading and incomplete information, the mayor, in this instance at least, appears to have failed on both accounts.

 


Appendix I

Cumulative salary increases for Madera job classifications from FY15-17

Job Title % increase (FY15-17)
Fleet Operations Manager 44%
Electrician III 44%
Director of Community Development 43%
City Clerk 39%
Deputy City Clerk 36%
City Attorney 34%
Director of Human Resources 33%
Public Works Maintenance Worker II 31%
Director of Parks & Community Services 31%
Water System Technician 30%
Waste Water Treatment Plant Manager 29%
City Administrator 27%
Parks Worker II 27%
Plans Examiner 26%
Administrative Analyst 26%
Public Works Operations Director 24%
Network Administrator 23%
Combination Building Inspector 22%
Financial Services Manager 22%
Information Services Manager 22%
Animal Control Officer 22%
Chief Building Official 21%
Accountant II 21%
Facilities Maintenance Technician 20%
Water System Supervisor 20%
Associate Planner 19%
Wastewater Collection System Supervisor 18%
Construction Inspector II 17%
Accounting Technician II 17%
Payroll Specialist 17%
Mechanic II 16%
Assistant Engineer 15%
Director of Financial Services 15%
Recreation/Community Programs Coordinator 15%
Park Planning Manager 15%
Engineering Technician II 14%
Police Sergeant 14%
Administrative Assistant 14%
Office Assistant II 14%
Computer Technician 14%
Police Chief 14%
Public Safety Dispatcher 14%
Program Manager-Grants 13%
Planning Manager 13%
City Engineer 12%
Records Clerk 11%
Assistant Planner 11%
Police Officer II 11%
Recreation/Community Programs Manager 11%
Deputy City Engineer 11%
Water System Worker II 11%
Human Resources Technician II 11%
Engineering Project Manager 11%
Neighborhood Preservation Specialist II 11%
Police Office Supervisor 11%
Building Permit Technician 11%
Police Commander 11%
Utility Billing Supervisor 11%
Water Quality Specialist II 11%
Parks Supervisor 11%
Senior Planner 11%
Public Works Maintenance Worker IV 11%
Average 20%

 

Appendix II

Total FY2017 compensation for Madera job classifications as a percentage of FY2015 Market Median

Job Title Madera compensation as % of median after FY15 raise
City Administrator 128%
Engineering Project Manager 124%
Senior Planner 117%
Recreation/Community Programs Manager 117%
Water Quality Specialist II 117%
Assistant Planner 116%
Water System Worker II 116%
Police Commander 116%
Neighborhood Preservation Specialist II 115%
Records Clerk 114%
Utility Billing Supervisor 113%
Deputy City Engineer 113%
Public Works Maintenance Worker IV 112%
Building Permit Technician 110%
Director of Parks & Community Services 110%
Police Office Supervisor 109%
City Engineer 109%
Planning Manager 108%
Director of Financial Services 108%
Human Resources Technician II 108%
Parks Supervisor 108%
Police Officer II 108%
Chief Building Official 108%
Information Services Manager 107%
Public Works Operations Director 107%
Park Planning Manager 107%
Program Manager-Grants 107%
City Attorney 107%
Computer Technician 107%
Assistant Engineer 106%
Engineering Technician II 106%
Police Sergeant 106%
Director of Human Resources 106%
Administrative Assistant 106%
Public Safety Dispatcher 106%
Construction Inspector II 106%
Associate Planner 106%
Wastewater Collection System Supervisor 106%
Mechanic II 106%
Recreation/Community Programs Coordinator 106%
Financial Services Manager 106%
Animal Control Officer 106%
Office Assistant II 106%
Director of Community Development 106%
Water System Supervisor 105%
City Clerk 105%
Accountant II 105%
Payroll Specialist 105%
Network Administrator 105%
Accounting Technician II 105%
Combination Building Inspector 105%
Facilities Maintenance Technician 105%
Plans Examiner 105%
Administrative Analyst 105%
Waste Water Treatment Plant Manager 104%
Water System Technician 104%
Parks Worker II 103%
Public Works Maintenance Worker II 103%
Deputy City Clerk 103%
Fleet Operations Manager 102%
Police Chief 102%
Electrician III 102%
Average 108%

2018 a decisive year for reining in pensions

A great column by Jody Morales on the impact court rulings in 2018 might have for public pensions:

Many noted reporters and columnists proclaim that every new tax is a pension tax. We of Citizens for Sustainable Pension Plans agree.

The city of San Rafael is struggling to continue services without new taxes, but it seems both unlikely and impossible that they can do so.

The Transportation Authority of Marin is revving up to once again raise the sales tax cap.

The Marin Municipal Water District initiated rate increases to occur over the next few years, shifting pension costs onto its customers.

These are but a few local agencies turning to taxpayers to pay more to maintain an unsustainable system.

Whether or not our local agencies, including city councils and the Board of Supervisors, have the courage to put an end to ever-increasing taxes, rates and fees, coupled with reduction or elimination of services, is yet to be seen.

Read the rest at the MarinIJ.com website.