A growing workforce and rising salaries have spurred a 6.8 percent jump in Palo Alto's employee costs last year, according to data released by the city Tuesday afternoon.
The data, which is available here, shows that the city has spent $9.5 million more in employee compensation in 2014 than it did in 2013. The main drivers behind the trend are a growing number of workers on the city's payroll and the city's recent contracts with its labor unions, which include salary increases.
The city added 52 new employees in the calendar year, raising the number of workers on the payroll by 3.4 percent.
David Ramberg, assistant director of the Administrative Services Department, said the city created 23 new positions in the years 2013 and 2014 and filled numerous positions that had been vacant for several years.
At the same time, the number of employees making more than $200,000 annually in total compensation has more than doubled between 2013, when the group included eight employees, and 2014, when the number stood at 19.
Meanwhile, the number of employees making more than $100,000 rose sharply for the second straight year. While this category included 372 employees in 2012, the number went up to 408 in 2013 and to 440 in 2014.
On the city's list of top earners, City Manager James Keene led the way in 2014 with $289,344 in total wages. He is followed by City Attorney Molly Stump ($264,166), Fire Inspector John Parks ($247,470, which includes $114,365 in overtime), Utilities Director Valerie Fong ($242,720) and Chief Operating Officer Lalo Perez ($240,937).
The growing number of workers now earning more than $100,000 reflects the City Council's approval last year of new contracts with the city's labor unions and its non-unionized group of managers and professionals.
In March 2014, the council granted the city's largest union, the Service Employees International Union (SEIU), its first salary increase since 2008. Every worker received a pay hike of at least 4.5 percent, spread out over two years. The council followed that up by approving a two-year contract with similar raises for the management group.
In addition to the 4.5 percent raises, the city adjusted salaries of both SEIU workers and managers to better align with similar positions in neighboring cities. On the SEIU side, this resulted in 320 workers getting additional raises, ranging from 2 to 10 percent. For the management group, which last year included 211 employees, this led to 19 positions being reclassified so that they are within 5 percent of the median market.
The new contracts also made significant changes to the health-care benefits of employees. Under last year's agreement, the city's contributions toward health care became a flat rate, rather than a percentage of the overall cost.
Even with the adjustment, the city's overall obligations for salaries, health care and pensions went up by about $9.5 million between 2013 and 2014, rising from $139.7 million to $149.2 million in a year as the overall employee headcount jumped from 1,532 to 1,584.