Palo Alto looks to raise council salaries

Council committee recommends increasing monthly stipends from $600 to $1,000

Having approved raises for most city workers over the past year, the Palo Alto City Council is now shifting its focus toward a group that hasn't seen a salary adjustment since 2001 -- the council itself.

By a 2-1 vote, with Greg Scmid absent and Greg Scharff dissenting, the council's Policy and Services Committee Tuesday recommended raising the council's monthly stipend from the current level of $600 to $1,000. The change would not apply until 2017, which means current council members would not see the higher pay unless they get reelected.

Chair Gail Price and Councilman Larry Klein, who supported the increase, framed the issue as a way to encourage more residents to get involved in local governance. Klein cited a decline in candidates for the council and local commissions, arguing that the workload for council members has been increasing even as inflation has made the council's stipend less lucrative.

Running for the council still won't make anyone rich, Klein said, but the adjustment could help would-be candidates have enough money for child care or whatever resources they might need to accommodate the council workload, which he estimates takes up at least 25 to 30 hours a week. Raising salaries, he said, would be a "democratic move."

"I do want to (leave) our council open to as broad a group as we can," Klein said.

Price agreed and said she feels very strongly that raising council stipends is important way to give more people the opportunity to serve.

"We come from a variety of economic situations," Price said. "If people are interested in serving, some may or may not have circumstances that allow it."

The nature of the council's work, she said, requires significant time and attention, which makes it important "to make it at least somewhat possible for people who have fewer means to consider trying to do this work while trying to earn a living at the same time."

The proposal to raise compensation for council members came out of a colleagues memo penned by Mayor Liz Kniss, Vice Mayor Nancy Shepherd and Price, the same memo that also recommended extending term limits and cutting the number of council seats from nine to seven. On Monday night, the council agreed to pursue the latter proposal on the November ballot but balked on the former, with both decisions coming by a 5-4 vote. The issue of compensation was not considered on Monday night.

The June 2013 memo notes that the council's workload would only increase if voters agree to reduce council seats.

"In the event that council size is reduced, elected members would need to manage more liaison

positions, roles and appointments which will impact their ability to serve in time and quality," the memo reads. "Additionally, serving on the City Council demands a significant amount of time, including preparing and attending meetings, meeting with the community and attending events. We recommend that council discuss this impact, consider an increase to the $600 per month (plus benefits) stipend, to accommodate this possible change."

Scharff disagreed with his two colleagues and said he sees no reason to raise salaries at this time. Cities tend to stop giving raises when times are tough and to ramp up salaries and "take on long-term obligations" when times are good. The council, he said, should resist this temptation. The city is currently close to the middle when it comes to compensation, he said, which is "where we should be."

"Because times are good, that doesn't' mean we should necessarily have our handout," Scharff said.

He also noted that council members get health benefits, which should be considered as part of the compensation conversation.

"We moved to look at total compensation," Scharff said. "We asked our employees to look at total compensation. If we as council members don't look at total compensation ... I don't think we're being transparent."

If the council approves the committee's recommendation, members would see a raise for the first time since 2001. The current stipend of $600 a month places Palo Alto about $150 below average on a list of 36 jurisdictions surveyed by staff (this survey did not consider health care benefits). At the lowest end are cities like Atherton, Woodside and Portola Valley, where council members get no stipends at all. At the other extreme are Sunnyvale ($2,194), Hayward ($2,082) and Daly City ($1,414). San Jose is the major outlier, with a monthly stipend of $6,760.

The issue of balancing council work with other jobs also came up during Monday night's discussion over Charter amendments, when Kniss took an impromptu survey and asked her colleagues how many of them have full-time jobs. Only Pat Burt and Marc Berman raised their hands. Kniss noted that when she was on the council in the 1990s, everyone had full-time jobs.

"I'm puzzled now that you feel like you need to have your own private resources or you need to be retired," Kniss said.

But Scharff said it's still possible to balance council duties with a regular job. In his first two years on the council, he said, he spent more than 50 hours a week on his law practice. These days, the number is closer to 30.

"I think you can work full-time and have a job on the council," Scharff said. "It just depends how much time you want to put into it."

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2 people like this
Posted by senor blogger
a resident of Palo Verde
on Jun 18, 2014 at 12:02 pm

$1000/month is a pittance for what the amount of time the Council works. Dont forget approx $500/mo. for Health ins.

We owe it to these hard working folks.

Like this comment
Posted by musical
a resident of Palo Verde
on Jun 18, 2014 at 1:00 pm

Are these stipends subject to 15.3% social security tax? Seems that any City outlay as a "paycheck" would result in less than half in take-home pay in most council member's tax brackets. Using tax dollars to pay more taxes just strikes me as inefficient.

Like this comment
Posted by randy albin
a resident of Mountain View
on Jun 18, 2014 at 1:45 pm

so, no kidding. how can people represent the city unless they can afford the cost of living? this seems to make sense, doesn't it? put them on a payroll

Like this comment
Posted by Que?
a resident of Community Center
on Jun 18, 2014 at 1:48 pm

$500/month for health insurance??? must be some crappy policy! I pay a portion of my employee health care plan out-of-paycheck every month, and that was just raised to $1500/month ( and that IS a crappy policy--an HMO).

Like this comment
Posted by J. Lyons
a resident of Downtown North
on Jun 18, 2014 at 3:38 pm

Salary is just part of the cost. Medical benefits, retirement, parking, travel, and special privileges may be others? What are they? What do they cost us? It has been those "other costs" that that were easily approved years ago and now stress our public coffers.

Like this comment
Posted by Alphonso
a resident of Los Altos Hills
on Jun 18, 2014 at 4:50 pm

The ought to get benefits similar to any other part time PA employee - no less and no more.

Like this comment
Posted by Crooks
a resident of Old Palo Alto
on Jun 18, 2014 at 8:50 pm

[Post removed.]

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Posted by resident
a resident of Another Palo Alto neighborhood
on Jun 19, 2014 at 6:30 am

This raise is the right thing to do but it will make no real difference in the outcome that Klein says he is so concerned about. And this ties into the
discussion about number of Council members and motivations there as well among other Council members. We need to create a strong Mayor position, with a salary of $250,000,and with broad administrative powers to change the direction and focus of the City with a strong voter mandate behind
him/her. There are some very capable people out there who under these conditions would step forward. This is what we need to do.

Like this comment
Posted by Dean
a resident of Midtown
on Jun 19, 2014 at 7:35 am

In the interests of full disclosure, I am a former Mid-Town reisdent.

Note to Musical--

All the City Council People I'm quite sure make more than $105,000 a year, and hence, like over 90% of Palo Altoans, find that by summer of each year, they are not contributing to Social Security (and neither is the city or any private employers).

Stepping aboard my high horse/soapbox, I will again say the caps on Social Security contributions by EEs and ERs are one of the most regressive, yet not so hidden, taxes in America.

Virtually all issues with funding SS going forward could be solved if Congress simply REMOVED the caps and every "earned" dollar ( but NOT the exemption on dividends, interest and capital gains) was fully taxed without upper limits.

1/2 a millionaires, millionaires, and billionaires would never miss the scraps from their table. Working folks outside the Bay Area like me and my family members surely do now. Temporary fixes to income inequality like BO's payroll tax holiday for a year are window dressing.

Where are Buffett, Gates, and Forbes on this critical fiscal issue?

Like this comment
Posted by Palo Alto Native
a resident of College Terrace
on Jun 20, 2014 at 12:02 am

I am in favor of a full-time mayor who is elected by the people of Palo Alto, not the city council members. Moreover, I would like these positions to be full-time council members (paid professionals) so that we could achieve more capable individuals running than those who can afford to volunteer. In the short term, increasing the stipend to 1K seems very reasonable - especially given the amount of years since the last increase and the low stipend in the first place.

Like this comment
Posted by musical
a resident of Palo Verde
on Jun 22, 2014 at 2:54 am

@Dean, thanks for the response, sorry for delay of my reply. The article indicates that only two on the City Council have full time jobs, so it's not clear to me that they all max out their social security. The current limit is $117,000 -- congratulations to the 90% of Palo Altons who have already hit that number now that summer has started.

Regarding the regressiveness -- of the 117,000, your benefit is based on 90% of the first 10,000, then 32% of the next 55,000, and only 15% of the final 52,000. Anything we'd pay on greater than 117,000 would not result in any increased retirement check. That sounds more like an ordinary tax than a retirement plan, so rather than lifting the cap, any increase should just be folded into the overall tax brackets. Remember that social security taxes are not deductible -- we pay state and federal income tax on those dollars we never see.

The entire system is opaque, which may explain how we can pay more and more for less and less.

Sorry, but further commenting on this topic has been closed.

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