Despite a small dip in employee headcount, the City of Palo Alto’s payroll went up by 3 percent in 2016, an increase that was fueled in part by rising pension expenses, according to staff.
The city spent $165.9 million on employee compensation in 2016, according to salary data released by the Administrative Services Department this week — an increase of about $4.8 million from 2015. According to David Ramberg, assistant director of Administrative Services, the city’s rising pension obligations contributed to about $2.1 million of the increase.
Another factor is the contracts that the city signed over the past three years with its labor unions — agreements that coupled regular annual salary increases with “market adjustments” that aim at bringing local salaries up to levels in comparable jurisdictions. These trends helped raise the city’s overall spending on compensation despite a slight drop in the overall number of positions. Ramberg said the city had 1,546 paid positions last year, 15 fewer than in the year before.
Though expenses continue to rise, the increase was more modest in 2016 than in either of the two prior years. Last year, the city reported an $11.8 million increase in expenses, about $6 million of which was attributed to a calendar quirk that occurs once every 11 years (it adds an extra pay period). The year before, the city’s payroll grew by $9.5 million over the prior year.
The list of the city’s top earners in 2016 is a mix of high-level managers, public-safety veterans and department heads. City Manager James Keene tops the list with a total of $317,909, which includes his regular salary of $296,596 and $14,111 in “cash out” pay, which pertains to things like vacations, holidays, professional development and “excess management reimbursement.”
Keene is followed on the list of top earners by City Attorney Molly Stump ($286,770), Assistant City Manager and Utilities General Manager Ed Shikada ($280,295), Fire Department EMT John Pars ($270,489), police Sgt. Adrienne Moore ($255,315), Fire Battalion Chief Ryan Stoddard ($253,312), Chief Financial Officer Lalo Perez ($248,632), recently retired Police Chief Dennis Burns ($248,596) and Fire Department EMT Paul Schultz ($245,321).
The salaries of the four police and firefighters on the list were significantly bolstered by overtime pay, which in all cases comprised more than $100,000 of their total salaries, according to city data. (Burns, who as a department head did not receive overtime pay, is an exception.)
The data also shows a steady increase in the number of employees receiving more than $200,000 in total compensation. In 2016, 34 employees made the list, up from 23 in 2015 and from 19 in 2014.
This is absolutely crazy that Fire personnel are paid over $200,000 per year to work 24 hour shifts that include sleeping, eating, working out, watching tv, playing on the internet, washing their vehicles! Do I need to go on?! When does the madness stop?
Yes, I see where the above comment is coming from, but at any time these firefighters are waiting for the call to come and save lives, perhaps any one of us. They might be freeing someone from a burning building or a horrendous accident.
Having seen the reaction of the Oakland firefighters in recent fires and what they have had to witness, I am so grateful to each and every one of these brave individuals who have long hours and even longer in emergencies to keep us safe.
EMTs making more than medical doctors?
I live in a Mountain View homeowners association as does the Palo Alto Deputy Fire Chief who parks her brand new Fire Department SUV on our private streets in the prime spots. First in and last out on most days. One gets a real sense of how hard senior fire department personnel are working when one observes the time the Deputy Fire Chief’s Fire Department vehicle sits parked in front of her house. It’s comical to observe the shiny new always washed vehicle as a near-permanent fixture in the neighborhood.
Myron is absolutely right. The contract the city signed with the Firefighters Union is why we have this outrageous pay scale. How many fire calls actually occur annually in Palo Alto to warrant the number of firefighters we have on duty? Why do we need two firetrucks to accompany and EMT call for someone with chest pain? Bloated bureaucracy, caving to unions…..the Palo Alto Way.
Maybe…. just maybe, the Palo Alto Deputy Fire Chief should be investigated. Thanks to Mountain View Home Owner for her revelation. It’ll be interesting to see if this behavior changes noe that the cat is out of the bag.
To Myron and the 26 people who “liked” his comment: The article clearly stated that more than $100,000 of the salaries reported for the 4 non-management Fire and Police staff were for OVERTIME pay. Yes, their base pay is higher than that of most City employees, but it is not anywhere close to $200,000!
Here’s another key point about why all the overtime: Both our firefighters and the police front line people have working very short staffed for at least 5 years. Overtime is often mandatory during emergencies like with all the fires last summer. Plus it’s very difficult to recruit new hires because they can’t afford to live within 50 miles of Palo Alto. And if good candidates do accept a job and make it through the first month or so of training, they often leave within a year or two for these two reasons: (1) other cities pay more and (2) other cities do not require such 90 minute + commutes and time away from families.
It’s not okay for you to make snide comments when you just criticize while ignoring information in the article that contradicts your statements! I am not an apologist for PAPD or PAFD, and I do NOT have family members working in public safety fields. But I did learn about the short staffing a few years ago and I do have deep respect for those who commit to being mentally and physically prepared to go out whenever the 911 call comes in and save lives/keep us safe from those who would harm us.
Employee pensions have been out of control since 2006, when they
were raised to 81% of final pay after 30 years. The money for
this does not exist. It will be stolen from future generations.
Salaries are going up about 5% per year. Pension liability is
increasing at least as fast. Year after year. Compounding.
And in the meantime, where will the money come to pay for this stupidity?
(1) All expenses other than salaries, such as infrastructure maintenance
and improvements. You can forget forever getting a new public safety
building, or even a simple (not fancy) new bike bridge over 101.
Overhead wires will never be put underground.
(2) Bigger transfer payments from Palo Alto Utilities.
(3) Increases in utility rates (electrical, water, gas, garbage, recycling).
(4) Outsourcing (e.g., Animal Control).
(5) Reduction in emergency personnel and services. An understaffed
police department won’t have to manpower to clear property crimes.
It’s all very ugly. A slow-motion train wreck.
Eventually the goose just can’t lay enough golden eggs, and
Palo Alto (and many other cities in California) will follow
Vallejo, Stockton and San Bernardino into bankruptcy.
It was noted in the paper that the County of Santa Clara is the biggest employer in the county. So if federal funds are cut off for certain functions then there is a lot of people that may be out of a job. Decisions on the Sanctuary City Law is protecting non-citizens / illegals but putting citizens at risk for their jobs. This whole concept is has not been thought out very well. But there are many budget issues in the state that are not working well.
Myron forgot to mention the fire personnel shopping at Stanford, hanging out at Starbucks and Peet’s, cruising up and down the downtown streets at night. Yup, see this activity many times. And don’t forget the pensions- 90% of yearly pay the city is “on the hook” for after the firefighters retired. What companies keep paying their employees after they leave??
> Here’s another key point about why all the overtime: Both our
> firefighters and the police front line people have working very
> short staffed for at least 5 years.
We hear this year after year, but rarely from our elected officials or department heads. We hear it on a blog, or a letter-to-the-editor .. but with no hard evidence.
> they often leave within a year or two for these two reasons:
> (1) other cities pay more and (2) other cities do not require
> (2) such 90 minute + commutes and time away from families.
Again, this is more hearsay. Many police leave because they are bored because Palo Alto is a low crime city, and young police officers are interested in more “action”.
Joe, you ask Myron for hard evidence yet your claim that PAPD officers leave PA due to a lack of action, yet provide ZERO HARD EVIDENCE???? I got a good chuckle from your hypocrisy.
Talking about city budget deficits. How about cutting the compensation to the city consulting architect Arnold Mammarella? This guy comes in once a week, give a bunch of useless comments to obstruct residential development, and gets paid what like close to a million? How about use that money instead to pay for enhancement to our essential services like police, fire fighters, teachers, etc. Without him, our housing stock gets renewed faster and property tax goes up as well. Two birds with one stone!
Most fire and police do not live in the local area. Fire fighters in particular take advantage of their 24 hour shifts so they only have to commute once or twice a week at off hours. Many just extend a day for that extra, lucrative overtime.
It’s emotional blackmail to suggest that we might not be rescued if we did not pay firefighters and police such excessive salaries. And how many times have we heard those in the profession say it’s not about the money, it’s about serving the community and humanity? And truly selfless heroes come in many forms and are usually not paid. Whenever some one tries to push the paid hero pitch, I get suspicious especially when you have to search long and hard for any such heroic rescues occurring.
I also fail to see how difficult or life threatening it is for Palo Alto firefighters to race to an emergency and do their job in such a small suburban city with California weather. It’s not like they are constantly asked to rescue folks from the Alaskan tundra during a snowstorm or to pull people out of 30 story towering infernos. I most always see them racing back and forth in their immaculate vehicles on clear days. The most they go is across town a few miles for medical emergencies. Furthermore have you ever listened to their calls for service on a scanner? Many calls are called off, most send at least one engine back meaning it was never needed in the first place.
Lastly, paramedics, EMT’s and fire fighters on the scene of a medical emergency DO NOT provide the same initial care” as trained physicians as many would like us to believe to justify exorbitant salaries. Emergency medical care, as heroic, noble and challenging as it sounds is no substitute for the minimal and most important duty of paramedics and EMT; patient assessment, communication with the hospital, and rapid transportation where teams will be prepared. The assessment will identify blood pressure, heart rate, and/or breathing problems and application of oxygen and or intravenous drugs as directed by physicians.
How about we sell the Cty Hall skyscraper and old police building which the City insists must be abandoned because it “can’t” be fixed, move all those City and police offices to Cubberly, sell off the land by California Ave where the new police department is expected to be, and then we can afford to pay for those 81% pensions for a few more years and stick not just our children with this fiscal irresponsbiility but also our grandkids.
Ridiculously high salary and benefits packages for destroying our city while enriching themselves with fees, surcharges, extra taxes, high utility bills.
In the private sector, poorly paid workers get NO over-time because they’re promoted to “management” so they’re exempt from over-time but here in Palo Alto pay overtime to people making more than $100,000. NUTSO.
Moving the City Hall with its $4,500,000 “way-finder” lobby makes to Cubberly makes too much sense, esp. when you also get to ruin Cal Ave, PA’s second “downtown” after we just spent $7,000,000 to “revitalize” to make it safe for more offices.
Can anyone in our city government, on our city council, on our myriad of commissions have a clue have a clue what “cost-effective” means?
I totally agree with Oldster.
Dang. So many bitter people here who are hating on firefighters. They are more important to the community than some venture capitalist funding an app to take photos of your food, yet you guys act like it’s the other way around.
I wouldn’t resent the salaries so much if I saw some evidence of fiscal responsibility and the city not wasting our money on, say, a parking garage for Cal Ave so soon after spending millions on “revitalizing” Cal Ave.
Palo Alto Weekly has done a good job of reporting what various projects cost and the amounts are worth remembering.
To Bob, Notice that no one is hating on the police because they earn their salary.
Nick, you must not be reading the articles about PAPD then, because I see the exact same sentiments when this same issue is raised regarding PAPD.
I’m not sure what Palo Altans are looking for exactly. They want their bubble walls to be impenetrable yet aren’t willing to help those that do their dirty work.
I honestly think the majority of PA would be happy if it was nothing but tech execs living in a completely automated world and they never had to hear about those struggling to make ends meet.
We should organize the city into independent operating units. One unit will receive funding for providing fire services, another for police services, another for garbage, etc. That way we can have one unit declare bankruptcy and void the pensions and pay structure within that unit without affecting all the other units. Some of you lawyers should pipe up and figure this out. Who negotiates the pay structure and benefits for firefighters, etc? It is an outrageous misuse of taxpayer money.
Until we stop putting the same old beholden-to-the-union crowd and get-reelected-at-any-costs professional politicians to City Council there will never be fiscal responsibility. We got into this 81% pension insanity by decades of their make-another-generation-pay budget games.
Willy Brown said on 740AM a few days ago “not a soul” will remember come election time the pork barrel payoff votes Governor Brown granted to push through his new gas tax. Willy knows we have a State majority of voters expecting “someone else to pay” forever and ever. Our former City Council member and now Our Man in Sacramento Marc Berman voted in Sacramento to push up those gas taxes on a bill which has no guarantees any of that money will be used on road repairs and instead will be largely funneled to the highspeed rail and other pork barrel projects. Expect any of the funds to go to “safe” Democratic voter districts? If so, I’ll see you in dreamland at the new BART line, any Caltrain improved service, or train grade separations through our town.
I’ll never forget Liz Kniss saying the Palo Alto voters were not smart or sophisticated enough to understand the details of a City Council matter many years ago. Sadly, she has been proven right. It will probably take bankruptcy for the majority of City voters to fix the finances of City Hall and the school board, too.
Well, Ms. Kniss is certainly right.
The city spent $4,500,000 for a “way-finding” system to navigate around City Hall but thinks our paying for parking downtown is preferable to adding “way-finding” systems to find parking spaces in our garages and paying for parking permits is preferable to requiring office developers to provide parking.
Even though I am concerned about the rising pension costs for Palo Alto, I do not blame the firefighters. This is an issue for the City of Palo Alto and the governing body who approves and approved the pensions.
I am sure it is everyone’s hope to never have to use their services, but if and when we need them, they are there.
The fact that firemen “live together” for 24 hours builds an extremely strong bond amongst the members, which is critical. These fireman depend upon each other to save other people’s lives.
Unfunded pension liabilities for the city of Palo Alto are probably around 500 million dollars for the entire city (police, fire, other retirees). This is the fastest growing part of the budget and yet it doesn’t get reported on and the city management doesn’t discuss it. Calpers (the state board that collects and manages the retirement funds for the city) continues to overstate their expected returns so that the city has to pay more each year to fund the shortfall. But by overstating their expected returns Calpers enables employees to under pay the real cost of their portion of their retirement. This then needs to be made up by the city each year and that amount has been going up by millions each year and yet the city has not required employees to make up the difference but made the tax payers fund the every ballooning difference.
So this unfunded pension liability combined with excessively generous retirement benefits (police and fire can retire with 100% pay at 50 and live more years on retirement than they every worked), is a mojor driver to increasing pay for employees.
This could explain a lot of the gripes about subpar city services. Any management consultant will tell you it is not cost-effective for highly paid employees to do actual work. City hall has apparently passed a tipping point.
There is always a lot of misinformation found on these blogs. City of Palo Alto employees pay twelve percent of their salary to fund Calpers. They do not receive social security. Contrary to popular belief, police and fire employees do not retire at 50 years of age.
There may be a few from the very old system, but the new system in this state is 57 years old. The pension requires 30 years of uninterrupted service. Considering most firefighters and police officers are getting hired in their late 20’s and early 30’s, they will not retire in some cases until their early 60’s. All of this information is very transparent and readily available via a simple google search.
Some good myths dispelled here:
http://www.letstalkpensions.com/myths-and-facts
And Firefighters in Marin some time ago wrote a very interesting piece on pensions:
http://www.iaff1775.org/the-truth-about-firefighter-retirement-and-pensions
All type of situations regarding the mismanagement of city/school funds is popping up in the papers. The information regarding the city finances needs to be more openly discussed and the awarding of consultant contracts needs to be discussed as we have people on staff who are suppose to be doing those jobs. If we have a deputy city manager then that is the person who should be working these issues. And the county just put on hold their consultant contract to enhance their image. Who thinks up these ideas that we have money to blow on images – if people just do the job correctly then that results in a proper image.
“They do not receive social security.” I guess that means they don’t pay social security. I sure wish I could be diverting that 12.4% into my 401k.
As further proof that all our workers deserve the maximum raises, guess at what time our transportation folks were doing traffic studies today near Jordan?
12:30PM when traffic’s very light and school’s still in session! NOT during parent pickup times or during commuter RUSH HOURS when there are known problems that have been repeatedly reported.
A make-work effort so they can pretend to be responsive while we get stuck paying for these worthless studies on which our city bases policy.
To Mayfield, Yes the employees pay into Calpers for their pension, but what you did not mention is that the money the employee paid, is used up the first ten years of retirement. After those ten years, the city is responsible for paying the pension until the employee dies. With employees living longer, sometimes more than thirty years into retirement…do you see the problem with this unfunded retirement pension?
“… the city is responsible for paying the pension until the employee dies.” Aren’t there survivor’s benefits for the spouse?
To musical, Yes. If the retiree chooses the spousal payout (alittle less payout each month), the city is responsible in paying the pension until the spouse dies too.
Myth: The average CalPERS pensioner gets 80 percent of their pay and are retiring with gold-plated pensions.
Fact: The average CalPERS member receives 50 percent or less of their pay in retirement. The average public pension in California is $2,945 per month. California retired teachers, who do not collect Social Security, earn an average $3,300-a-month after an average 27 years in the classroom. Six-figure pensions amount to less than 2 percent of public pensions and public employee pensions equal just 3 percent of California’s budget.
Myth: The State of California and taxpayers pay the total cost of public pensions.
Fact: State government workers contribute to their pensions with every paycheck, typically 12 percent of their monthly earnings. Meanwhile, CalPERS investments now pay 64 cents of every dollar in pensions paid. According to the latest data, CalPERS participating employers contribute 22 cents of every pension dollar paid. CalSTRS investments now pay 58 cents of every dollar in pensions paid. According to the latest data, CalSTRS employers, including the state, contribute 25 cents of every pension dollar paid. CalSTRS members contribute 8 percent of their earnings to help fund their own pensions.
Myth: Pension Costs for the State of California have increased by 2000 percent in the last 10 years.
Fact: The $400 million paid in 1999 was the lowest the State had paid in generations and it was due to the fact that the investment returns in the mid-1990s were so high, little was needed from the State to cover the plans. Some years, the State paid zero contributions for schools. This was due to higher than normal investment returns. Using a starting point of $400 million is misleading, because the late 90s was an atypical period for investment returns. In addition, payroll growth (bigger government) investment losses and people living longer and retiring earlier are the primary drivers of increased pension cost, not enhanced benefits. Employer contributions have actually DECREASED due to public employees paying more toward their pensions.