Palo Alto is preparing to offer $30,000 payments to Police and Fire department veterans who are willing to accept an early retirement — a move that city leaders hope will obviate the need for layoffs as they try to close a gaping budget hole.
The payment program, which will cost the city about $480,000 to implement, aims to protect the city's investment in newly hired officers and firefighters, who under union rules would be the first employees in their respective departments to face layoffs. The city will limit the "early exit" payments to 16 senior employees in the two departments, all of whom are eligible for retirement.
"The establishment of a retirement incentive program can aid in eliminating the need to layoff newly hired police and fire personnel, saving the city both the investment already made into these employees and the cost associated with future recruitments," the report states.
The City Council is scheduled to consider and likely approve the incentive program at its meeting this Monday, June 1. The vote would follow its decision on May 26 to tentatively approve a budget that eliminates five firefighter positions and 16 police positions, which includes six sworn officers in the patrol division, three in the city's specialized traffic program (which is being eliminated) and two the investigative division, among others.
When civilian positions are factored in, the city's public safety departments stand to lose 32 full-time positions as their budgets are cut by a total of $7.25 million, with most of the cuts occurring in the Police Department.
The city was considering even deeper cuts earlier this month, though it scaled some of the proposed reductions back after the City Council moved to reallocate some money that was designated for capital projects to public safety. Liz Kniss, Lydia Kou and Greg Tanaka all voted on May 12 against the original proposal to cut the police and fire budgets, though all council members except Tanaka ultimately voted to approve the revised budget, which the council plans to formally adopt on June 22.
Meanwhile, some residents have been calling on the council to impose pay cuts on labor groups, a move that council members said would run afoul of state law. According to the city's budget, the average total compensation (which includes salary and benefits) for a member of the city's main firefighter union, the International Association of Fire Fighters, is $312,767 (the average base salary is $142,092). Members of the city's primary police union, the Palo Alto Police Officers Association, receive a total compensation of $315,312 (with a base salary of $147,255).
High-level managers in both departments, which belong to their own respective unions, earn more. Members of the Fire Chief Association collect an average total compensation of $384,860, which includes a base salary of $199,790, according to the budget. In the Police Management Association, the average total compensation is $430,432, which includes an average base salary of $227,779.
By contrast, the average city employee in Palo Alto gets about $123,618 in base salary and $231,968, when pension and other benefits are factored in.
City Manager Ed Shikada said on May 26 that the city is continuing to have conversations with unions about labor concessions and that those discussions are "proceeding positively." To date, only the "managers and professionals" group, which is not represented by a union, is set to see a 15% reduction in compensation.
In proposing the new incentive program, staff is responding the council's direction from May 12 that the city consider policies that would achieve savings through attrition rather than layoffs. A recent report from Shikada's office noted that it typically takes longer than a year to train for police- and fire-sworn positions before they join the full operation.
"As such, the City has invested a significant time and hundreds of thousands of dollars to hire, equip and train the sworn personnel who would be lost to layoffs," the report states. "Police and Fire departments typically experience turnover from separations and retirements, which result in vacant positions throughout the year. If the typical attrition in Police and Fire could occur for an additional six-months period, the City would hope to avoid layoffs for these recently-hired employees."
The budget cuts in the Police Department are occurring just as the department was getting closer to achieving full staffing. For years, the department had more than a dozen vacancies in its ranks. In February, Police Chief Bob Jonsen told this news organization that the number of vacancies has dropped from 13, when he was hired in 2017, to about eight that month.
On May 12, Jonsen told the council that the department is now down to four vacancies.
But even though the department has seen some recent success in hiring new officers, Jonsen told this news organization during the February interview that each recruit has to go through a six-month academy, which is then followed by a six-month field-training program. Only then do they start integrating with the department, Jonsen said in an interview.
Jonsen also told the council that the period between when someone applies for a job as a police officer and whey they are ready to serve the community takes about two years.
"These positions have been filled with outstanding candidates who are presently working their way through our academy and field-training program," Jonsen told the council. "It would be a major setback if we had to let any of these individuals go and start from scratch."
By adopting the retirement-incentive program, the city is hoping to avoid laying off some of these recruits. A new report from the Human Relations Department states that those who volunteer to participate would get a one-time, lump-sum cash payment of $30,000 to mitigate their loss in earnings and overtime from retiring sooner than their personal circumstances would otherwise dictate. The program, the report argues, offers an opportunity to "aid in the natural succession of the organization and to achieve position eliminations through attrition."
"The City is deeply grateful to the more senior sworn personnel for considering an early exits to avoid layoffs," the report states. "By participating in this program, the City's investment in recruiting and training new personnel and the Palo Alto community benefits from the knowledge and familiarity gained by these individuals."