Despite fewer permanent positions in City Hall, Palo Alto's payroll went up by $11.8 million last year, an increase that officials attribute to a combination of salary increases and a calendar oddity that created an additional pay period in 2015.
The calendar anomaly occurs every 11 years at organizations that use a two-week schedule. According to David Ramberg, assistant director of Administrative Services Department, a typical year has 26 pay periods; last year had 27. This occurs because 26 two-week periods account for 364 days and the "unaccounted" days ultimately add up to a pay period every decade or so. Ramberg noted that next year there will be a compensation decrease because the city will drop back to 26 pay periods.
According to Ramberg, the calendar accounts for about $6 million of additional expenses. The remaining $5.8 million is a result of salary raises that were approved in 2015 and a related rise in benefit expenses. The rising costs come despite a decrease in the number of employees on the city's payroll. The head count of city employees (which includes temporary employees) dipped from 1,584 in 2014 to 1,561 in 2016.
The numbers reflect the raises that the council approved last year as part of efforts to keep up with the area's growing cost of living and to bring salaries up to the market median level.
In 2014, the City Council approved salary raises of 4.5 percent for the city's largest labor union, the Services Employees International Union (SEIU), Local 521, and for roughly 200 employees in the managers and professionals group. The raises were spread out over two years. In both groups, many workers received additional raises to make them more aligned with similar positions in other jurisdictions.
The trend continued this year, with the council last month approving new contracts for the SEIU and the city's two largest public-safety unions: the Palo Alto Peace Officers Association and the International Association of Fire Fighters, Local 1313. Under the new terms, employees in all three labor groups will receive 7.5 percent raises spread out over three years in addition to salary bumps based on marked adjustments.
The numbers from 2015 also show that nearly 1/3 of all workers -- and close to a half of all full-time workers -- now earn at least $100,000. The total number of employees in this category was 494 last year, up from 440 in 2014, 408 in 2013 and 372 in 2012. And 23 employees last year made more than $200,000, compared to 19 in 2014. By contrast, the number of employees who make less than $100,000 dropped by 81 between 2014 and 2015, from 1,125 to 1,044.
Much like in the prior few years, the city's top earners are department heads. City Manager James Keene led the list with $307,358 in total compensation (which includes benefits), followed by City Attorney Molly Stump ($272,214), recently retired Utilities Director Valerie Fong ($257,412) and Chief Financial Officer Lalo Perez ($256,822). Police Sgt. Adrienne Moore was fifth on the list, with a total salary of $254,938, which includes $108,218 in overtime.
Rounding out the top 10 earners are Police Chief Dennis Burns ($243,390), Assistant Police Chief Robert Beacom ($242,333), former Human Resources Director Kathryn Shen ($240,542), Public Works Director James Sartor ($226,612) and Planning Director Hillary Gitelman ($226,002).