Palo Alto's spending on employee salaries and benefits rose by $2.4 million between 2012 and 2013, despite the city's generally successful efforts to curb the rising costs of benefits and reduce overtime, according to data city officials released Monday.
The data, which the city released on its OpenData platform, indicates that while the city has been successful in dealing with the problem of rising pension and health care costs, its actions have come at a price. Benefit costs still increased by 2.3 percent between 2012 and 2013, though the rate is far below the 8 percent growth in benefit expenditures that occurred between 2011 and 2012. In exchange for greater contributions by employees for health care and pensions, management agreed to raise workers' salaries, a tradeoff that resulted in a $2.4 million increase in overall compensation.
The increase in pay came despite a lower headcount in the city's workforce. The number of workers (including temporary employees) went down from 1,622 in 2011 to 1,560 in 2012 to 1,522 in 2013. After decreasing from $137.6 million to $137.4 million between 2011 and 2012, the city's total spending on salaries and benefits rose to $139.7 in 2013.
City officials highlighted a decrease in the number of employees making more than $80,000 in overtime, from five in 2012 to zero last year. Whereas in prior years, the list of top ten earners was dominated by police officers and firefighters with sizable overtime sums (in 2011, 12 out of 15 top earners were public-safety workers), in 2012 it was mostly top managers and department heads that topped the list. The trend held in 2013, with City Manager James Keene and Assistant City Manager Pamela Antil topping the earners list with total compensations of $264,689 and $238,433, respectively. They were followed by Utilities Director Valerie Fong ($226,884), Chief Financial Officer Lalo Perez ($225,622) and Police Captain Robert Beacom ($222,947).
In a particularly dramatic departure from the past, only two members of the Fire Department were among the city's 20 highest earners. Only Fire Chief Eric Nickel, who received $199,122 in total wages in 2013, was ranked in the top ten (he was tenth). As recently as 2011, eight of the top 20 wage earners in the city were firefighters, including six of the top 12. In most cases, overtime made up a large share of the total wages in public safety (in several cases more than $100,000).
The city's overtime expenditures have since dipped substantially, partially as a result of the city's abolishment in 2012 of the minimum-staffing provision in the firefighter union's contract. The clause, which had required the city to have at least 29 firefighters on duty at all times, helped drive up overtime costs.
Even though there were no six-digit overtime earners in 2013, in several cases overtime earnings totaled more than a third of an employee's salary. Adrienne Moore, a police sergeant, took in $75,266 in overtime in 2013, which brought her salary up to $214,029, while Fire Captain Ryan Stoddard took in $78,479 in overtime, bringing his total wage to 193,989.
At the same time, even though employees' salaries have generally risen, the number of employees making more than $200,000 dipped in 2013. There were eight officials whose salaries were above that threshold in 2013, seven fewer than in 2012 and 14 fewer than in 2011. Meanwhile, the number of employees who made more than $100,000 jumped by 36, from 372 in 2012 to 408 in 2013.