City response to Police negotiations

June 29, 2001
I am responding to Santa Paula Police Officers’ Association President Carlos Juarez’s letter to the editor regarding Police negotiations. I would prefer a direct dialog with Sergeant Juarez rather than exchanging viewpoints via letters. I feel, however, it is necessary and fair for the public to hear the City’s view. First, I would like to congratulate Sgt. Juarez as the newly elected President of the Police Officers’ Association. Also, the public should know that the City Council and I have the greatest respect for our police officers. The officers are to be commended for their bravery and the outstanding service they provide daily to our community.Unfortunately, I disagree with Sgt. Juarez’ view of the City’s offer. A 13% salary increase over a four year period is fair (2% last year, plus a 5% raise retroactive to January 1, 2001, plus a 3% raise in June 2002 and another 3% in June 2003). We also offered an improved retirement benefit, called 3% @ 50. Basically this benefit results in a 50% increase in salary at the time of retirement. To put this benefit increase into perspective I submit the following example. A 50 year old police officer who has been with the Department 25 years would receive 50% of his salary for life under the old plan and 75% of his salary for life under the new plan. This is a 50% increase in salary benefit at retirement. This benefit, coupled with the raises, is what truly makes the City’s offer outstanding. Sgt. Juarez states he agrees with the City that this is “a great benefit” and that the “plan is going to be expensive”. The new benefit is very expensive; it will cost the City $2,800,000 in our retirement account. Because of the existing savings in our account (PERS retirement system), we would pay nothing (zero) for their current benefit for the next 22 years. As soon as we implement the new benefit, our savings starts to dwindle and it will be completely depleted in five years. Beginning with the sixth year of the new benefit, the cost to the City will be $210,820 annually. The $210,820 yearly, ongoing expense, is equal to an 11.5% salary increase. This would be an annual expense borne completely by the City. The only thing the City asked for is “time”. We asked that the implementation of the benefit be delayed in order to delay the depletion of the savings and to give us more time to find a source of funding for the benefit when the $210,820 must be paid. The City Council felt proud to give our officers and their families this benefit, which is currently only enjoyed by two other police departments in Ventura County. The City has no money currently to pay for the $210,820 annual PERS payment plus 1.7% or $30,000 of their salary offer. The Council has committed a total of $240,820 annually to the police officers that the City currently can’t afford to pay. What this means is that $240,820 of future revenue growth is already committed to our Police. Does this level of commitment reflect a group of elected officials who are bargaining unfairly. I think not. Not only has the Council given all extra funds it has to police, it also has given to police $240,820 it currently does not possess. This is why the Council has grown concerned. Whenever you promise money you don’t have you risk not being able to come up with it. The national economy is sputtering. Some say recession. The State of California’s surplus is gone due to the energy crisis. Will the State balance its future budgets by taking away money from the cities? They have in the past. Our $210,820 future annual PERS payment is based on an actuary that assumes no future raises. We have already committed to 13% higher salaries for police. This and other future raises will make this annual payment grow and/or come sooner than the currently anticipated 5 years. The Council is concerned with possibly having to cut services to the public or have other City employees losing their jobs because of the enormity of this offer.I feel it is important for the public and all of the Association members to know that many cities in California who have given the 3% @ 50 benefit have asked their officers to help pay for the benefit, and many of these cities did not have salary parity for their officers in their areas. Association Presidents throughout the State worked with their cities to help offset the extreme cost of the benefit regardless of what their salary increase might be. Some reduced their existing benefits to obtain the enhanced retirement benefit. The City of Santa Paula, due to the officers’ low salaries, chose not to go through that kind of process. The City is giving this benefit with no strings attached, plus a salary increase. The officers and their families will never have to worry about how the benefit will be paid.The fee study that Sgt. Juarez discusses (he stated we did not provide the paperwork relating to the study) resulted in an additional revenue source of about $80,000 annually. The $80,000 allowed us to give a 2% increase last year to all employees, including the officers. We apologize to the Association for not giving them the fee data earlier, however, we knew that the fee study was not going to be the answer to increasing their salaries above 2% in 2001, 2002 and 2003. We needed more time to study our economic situation and to find other resources besides fees, in order to make the unprecedented offers given to both Police and Fire this year. This information was shared with the unions.Sgt. Juarez discusses binding arbitration. This is a new law, imposed upon cities and counties by the State of California. The City of Santa Paula, the League of California Cities and most cities and counties in California feel that local governments should retain their right to decide salary levels for their employees. It only appears logical that local governments would know more about their own budgets and know how much they can afford to give to any employee or group. The new law requires an outside arbitrator to make those salary decisions for us. Recently the County of Santa Cruz challenged this new law. A Superior Court Judge in Santa Cruz County declared the law unconstitutional. Ultimately the California Supreme Court will have to make the final determination on the enforcement of binding arbitration. While this issue is being fought in the courts, the City of Santa Paula would be negligent in their duty to the citizens, if they accepted this flawed legislation and established binding arbitration for the City. In other words an arbitrator at some point in the years ahead could literally choose a salary and benefit package requested by the Police Association that could prove to be a financial hardship for the City. Sgt. Juarez is correct that some cities in the State have had binding arbitration as part of their city ordinances or charters for many years, however, the vast majority of cities do not have such local laws and those of us without binding arbitration should have the right to decide for ourselves. The State should not take away our local right to make local decisions regarding employee salaries.
I would like to state at this point that the City Council has an obligation to treat all of their employees as fairly as possible. We are blessed with a management team and support staff who are extremely talented and dedicated to the City. Many of these employees, especially our managers, are underpaid. It was an agonizing process for the City Council to only approve a 4% raise for them in the last two years. I believe that is one reason why it is especially difficult for us to accept that a police officer would accuse us of not bargaining in good faith. We are simply a small City with a small budget. The City Council does the best they can with the resources they have.To put the City’s “total” offer in a clear perspective, one must put all costs in a salary equivalent. This illustration shows how enormous the City’s offer truly is. In a four year agreement 13% is in increased salary (or $230,100 annually once it is all given). A $210,820 annual PERS payment that is equal to a 11.5% annual salary increase and the one time payment of $2,800,000 for the increased retirement benefit which equals a one time salary increase equal to 158%. If you add all these up and divide by the four years of the contract (including last year’s increase) it equals a salary increase equivalent to 45% each year for four years. This is clearly the best labor contract in the history of the City of Santa Paula. Sgt. Juarez states “all we are disagreeing on is six months”. Sgt. Juarez might want to ask his Union representative why he chose not to accept the City’s offer when we are only 6 months apart in agreement, considering how much the taxpayers are going to have to pay for this labor agreement.Again, I agree with Sgt. Juarez, our officers are underpaid. Now, how are we, as a community, as a City team, going to work together to correct that very serious problem. May I suggest as a start that we form a task force with representatives from the City Council, business community, citizen groups, all City employee associations including our non represented employees, and management team. This task force would be charged with developing new areas of funding sources, which is an extremely difficult task but I feel we should at least try . Working as a team rather than as adversaries may prove to be more constructive.

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