Still Getting Screwed – Vallejo Citizens Continue to Pay More and Get Less


By Robert Schussel, Ph.D

 

Purpose

To analyze the wages of Vallejo city employees versus city employee wages in other similar sized cities in Northern California ( primarily Bay Area). Comparison of city employee wages to those of residents is also made.

Background

Each year the California State Controller’s Office conducts an employee salary survey of local and state entities. VIB published an article by this authorin January 2014 based on this data comparing Vallejo to other similar sized cities in the entire state of California. I concluded that “Despite all of the union protests and denials, City of Vallejo employees earn significantly more than city employees in most of the other cities in California.”

In June 2014 the California Policy Center (CPC) released 2013 payroll and pension data (the most recent data available) on TransparentCalifornia.com, the largest ever online database of California state and local government employee pensions, salaries, and benefits.

The TransparentCalifornia.com Database added information about the pay of full time employees versus total employees. Also included is the median wage earned by residents who work full time.

Analyses of the TransparentCalifornia.Com Database are used for this article.

Caveat

1) The TransparentCalifornia.Com database contains unaudited data which means it may not be 100% accurate.

2) The types of services offered tend to be more similar in similar sized cities. However,not all cites include park and recreation services, crossing guards etc. in their employee counts (these are primarily part time workers).

3) The size of a city tends to be correlated with the number of employees per resident. Typically larger cities have more employees per resident.

— Vallejo (population 117K) was compared to other cities in Northern California whose population ranged in size from 93K to 147k.

–Vallejo is close to the median population value (114K if Napa is excluded) of the other Northern California cities included in the analyses.

Napa (77K) was included in the analysis as it is a relatively large nearby city.

 

Population

Napa

77,698

Vacaville

93,137

San Mateo

98,601

Daly City

102,605

Antioch

104,035

Richmond

105,280

Fairfield

106,533

Berkeley

114,037

VALLEJO

117,079

Santa Clara

117,817

Roseville

122,039

Concord

123,658

Sunnyvale

143,315

Hayward

147,163

Findings

  1. Vallejo has the fewest employees (total full and part-time) per resident (221 residents per employee) than other similar sized (93K to 147K) cities in Northern California.

    a.   Comment—Vallejo would still have close to the fewest employees per citizen if GVRD’s employees were included in the totals. (A significant part of GVRD’s budget comes from non-city sources).

Nothing Changes.pdf - Adobe Acrobat Pro

2) Vallejo has fewer full-time employees (about 30% less) than most similar size cities.

Nothing Changes2

 3) The median earnings($47,219 ) for full-time, year-round employed Vallejo residents is below that earned by residents in similar sized cities in Northern California–$51,626

a) Not surprisingly individuals who live in cities in the southern part of the Bay Area earn significantly more than those who live in Vallejo.

Nothing Changes3

 4) Full time Vallejo City employees earn about twice as much as Vallejo residents do

a) Although Vallejo residents median income is relatively low ($47,219) Vallejo City employees wages ($94,590) are above the median for city workers in other similar sized cities ($89,743).

Nothing Changes4

 

Comments

The residents of Vallejo have to pay more per employee than most other comparably sized cities. The net effect is that Vallejo residents get fewer services as fewer high priced employees can be afforded. In fact Vallejo has the lowest number of employees per resident of comparable size cities in Northern California.

The statements by Vallejo City employees over the years and more recently by VPOA (Vallejo Police Officers Association) President Matt Mustard that they are underpaid (compared to other cities) and just want wages similar to their peers are not supported by the facts. In fact, City of Vallejo employees earn more than employees of most similar sized cities in Northern California (5th highest out of 14 cities) even though Vallejo resident’s earnings are towards the low end of the similar sized cities.

Final Thoughts

Nothing will change as long as City Council members are unwilling to take prudent action regarding employee contracts. Despite the rhetoric at City Council meetings, few real savings have occurred. This lack of resolve is predicted to result in a $5,000,000 structural deficit this coming year. The real victims are the citizens of Vallejo who pay more than they should for the services they deserve.


'Still Getting Screwed – Vallejo Citizens Continue to Pay More and Get Less' have 32 comments

  1. March 11, 2015 @ 5:55 pm Portuguese Breakfast

    What this article fails to address is the overtime factor. Yes, many city of Vallejo departments are understaffed. This means that the number of city employees compared to number of residents is far too low. This article is completely correct in that aspect.

    However, as a way to attempt to maintain levels of service, many of these city departments are required to work large amounts of overtime. This skews the employee earnings. The stats for articles such as this one are pulled from employee W2’s, meaning it reflects total earnings without taking into effect how much of those earnings are from overtime.

    Citizens wanting to see better services provided should be asking for more employees per department. This will then reflect in lower earnings per employee, due to less overtime requirements.

    Unfortunately, it is cheaper for the city to employ fewer individuals and pay the overtime than it is to pay a new employees wages + benefits + retirement, etc.

    Reply

    • silasBarnabe

      March 11, 2015 @ 6:57 pm silasBarnabe

      @Breakfast, Yes you are making Dr. Schussels point:

      Unfortunately, it is cheaper for the city to employ fewer individuals and pay the overtime than it is to pay a new employees wages + benefits + retirement, etc.”

      We need to reduce employee costs 🙂

      Reply

    • March 12, 2015 @ 1:32 pm Publicus

      Regarding employees working overtime… Much of that is a scam too. We found out that the VFD had a deal where if someone was late to show up for their shift, the person being replaced had to be paid for some minimum …like 4 hours…to stay for those few minutes. The VFD was just milking the system. My pet peeve is that there are no results for all those hours. The same number of squatter houses, vacant and deteriorating blighted houses, no reduction in the number of houses being broken into in broad daylight. But reams and reams of paper being used to prepare reports designed to obfuscate and confuse. Why are there no performance standards? Just working overtime without any measurable results is criminal. No one would get away with that in the private sector

      Reply

      • March 12, 2015 @ 5:13 pm Anon

        Publicus, try not to be so Schussel or Garmin like with story context. Your 4 hr. min. example was removed from the contract language about 20 years ago. Try to be more current an not wander around in ancient history

        Reply

        • silasBarnabe

          March 12, 2015 @ 7:38 pm silasBarnabe

          So you admit Dickie that such contract language and the rape of the city of Vallejo general fund existed?

          Reply

          • March 13, 2015 @ 7:44 am Anon

            You have a two part question Silass. 1) Yes-about 20 years ago that contract language was removed. 2) No

          • March 13, 2015 @ 8:38 am Anon

            I will admit that Schussels “report” raises interesting questions. ie: How can Napa (less pop and lower earnings per residential (report: median income chart)) pay a higher base pay FF hourly rate AND the employees PERS contribution (city website)?

          • March 13, 2015 @ 9:52 am Ben

            Napa does better because they have a better non individual based tax basis, i.e. higher land values and retail sales. Most of us even shop in Napa because of some of the stores and the restaurants that Vallejo does not have.

          • March 13, 2015 @ 7:44 pm Anon

            Sounds like Napa govt spent more time developing revenue streams than fighting city employee groups. They must have a smarter group of activist citizens.

  2. March 12, 2015 @ 8:47 am Anon

    Schussel’s report (?) does not help much. For example, the City of Napa appears to have better employee:citizen ratios and a poorer (sp?) population than Vallejo (according to Schussel’s graphs). However, a look at their PS base hourly rate salaries (city web site) shows Napa significantly higher than Vallejo (Napa FF=$38 v Vallejo FF $25) and on par with PD base hourly rate (Napa PD $38 v Vallejo PD $38). So, the title of the article ‘Pay More : Get Less’ seems poorly researched in light of the fact that Napa (according to Dr. (?) Schussel) has a poorer population but pays PS more. There is something very incomplete about this work. IMHO

    Reply

  3. March 13, 2015 @ 5:08 am Bong Hit

    Some jobs on the city payroll are impacted by the large numbers of poor people and other city jobs are not. It will be important for us to separate out these two groups and concentrate on those jobs that are unaffected by Vallejo’s unique addiction to hosting every poor household that we can possibly get our sticky, federal government addicted fingers on.

    For example, the accounting department is largely unaffected by the composition of the populous. I agree that those people should be scrutinized closely. If they are paid far above the average for a city of our size then they had better be superstars. Public works? Probably some impacts but minor? Police? High impact and drives vast amounts of overtime to keep the savages in line. Fire? Moderate impacts, lots of overdose and injury accidents due to poor people and their terrible life choices.

    The comparison should be broken down into these two groups and for the salary workers compare yearly salary and benefits with comparables. For the hourly workers compare hourly wage and benefits. This will give us a better apples to apples comparison to other cities.

    Reply

    • March 13, 2015 @ 8:45 am Anon

      I don’t think you will ever get that apples to apples comparison as VIB/Schussel does not acknowledge any employees hourly rate. They look at EVERYONE as though they are salaried employees?

      Reply

  4. March 13, 2015 @ 9:48 am John_K

    Thanks, Dr. Schussel, for yet another enlightening essay. I’m seeing some of the same arguments that were given when employee wages were published prior to bankruptcy. Overtime may be a factor in the gross wages, but doesn’t every city and municipality have an overtime budget for public safety? What some readers may be missing is the growing structural deficit. It loomed so large in 2007 that the City could no longer pay the employees. The City was forced into bankruptcy, but failed to fix one of the major underlying causes, which was unaffordable employee contracts. And our unfunded liabilities continue to grow each year. We continue to spend more than we make.

    As you say, nothing will change as long as City Council members are unwilling to take prudent action regarding employee contracts.

    Reply

    • March 13, 2015 @ 10:02 am Ben

      You forget how much power CalPers has over the amount of money that must annually be handed over from a city to CalPers. Change in council policy or council membership will never alter that formula. Sounds like you had better be a supporter of the Reed initiative for the November 2016 ballot. The city has been fixing employees contracts. That isn’t done by an act of dictatorship. It is done in good faith negotiations that take time and two to tango. The city goes too far and the city gets sued. [See VPOA vs. City of Vallejo in the Solano Superior Court]. But if you have a magic wand or can guarantee absolute obedience to
      attaining what you dictate should absolutely be done, let’s hear or see it.

      Reply

      • March 13, 2015 @ 3:16 pm John_K

        I don’t forget. CalPERS is only part of the situation. I haven’t forgotten that In 2007, City of Vallejo was paying about 17% of a maintenance worker’s wages into CalPERS, while the employee was paying 9%. But fiscal year 2015-16, the city will be paying about 33%, and next year it will increase to 35%. For police and fire, it was about 28% in 2007, but it’s 58% for 2015-16 and 62% the next year, with no end in sight for these increases.

        What you may be forgetting is the difference between a structural deficit and a cyclical one. From recent Federal Court decisions, it appears that CalPERS will be a bystander during Vallejo’s next bankruptcy. All bets are off if we have to go through that… I believe the Judge ruled that CalPERS stakes may be placed on the table. And VPOA vs Vallejo hasn’t been doing all that well lately, from reading the Breaking News — City Prevails in Lawsuit Brought by Cops.

        Hopefully good faith negotiations will help control our structural deficit before it pushes the City into another Chapter 9 bankruptcy. Meanwhile, City Council has the power to impose changes in the absence of complete agreements. Meyers-Milias-Brown Act . I dictate nothing. What do you have to contribute?

        Reply

        • March 13, 2015 @ 10:36 pm Anon

          There is light at the end of the tunnel. If we were not mistakenly trying to attain 100% funding of the pensions then the cities contribution could very soon be reduced to 18% of payroll. At this time Calpers is close to 70% funding which most experts regard as a sufficient amount. It took me 20 years to get the unfunded liability of my mortgage down to less than 30%? Unfunded liabilities are not the monster you want people to believe. Normal funding for cities would be 18% but because Calpers is required (?) to close to 100% funding it has to raise the cities funding an additional 36%. There is an end in site, however, we are for some reason we are unneccisarily taking the long road.

          Reply

          • March 14, 2015 @ 7:56 am John_K

            That “light” at the end of the tunnel could very well be an oncoming train. Has CalPERS stopped making high risk investments? In the early days, PERS was allowed only to make safe investments, such as government securities and municipal bonds. But over the years, they were allowed to make higher risk investments, where taxpayers bear the burden of the risk. The unfunded liability can explode if Mister Market falls and breaks his hip. Just like 20 years into your mortgage, a sudden loss of income could leave you homeless. Again, the CalPERS unfunded liability risk is shouldered by taxpayers, not CalPERS management and members.

  5. March 14, 2015 @ 8:31 pm Anon

    Is your retirement based on govt. securities? Ridiculous. They are now under 2.9%. In the 80’s you could get them at 15% but mortgage rates were 9% and unemployment in 1982 was 10%. Is that what you are hoping for? At the right time bonds are part of the pension solution but a competent investor for a pension would never rely on govt. securities alone. Which PERS is.

    Reply

    • March 15, 2015 @ 5:33 am John_K

      How about a retirement based upon what CalPERS is able to do, without a taxpayer bailout? Without the employer having to make up the shortfall when the retirement system managers crap out? CalPERS made promises it cannot keep, based upon stock market gambling and unrealistic expectations of high returns. Cities were told that the promised increase in benefits wouldn’t cost anything. But now, the retirement system is gobbling up huge chunks of city budgets and it’s getting worse every year.

      How about low-risk investments where the retirement system and its members bear the risk? I’d say govt. securities are a better way, even if promised benefits have to be reduced. It’s a long-term investment.

      See “The Pension Fund That Ate California”
      http://tinyurl.com/bggmmg4

      Reply

      • March 15, 2015 @ 4:40 pm Anon

        I think you are way overstating the situation with terminology like “stock market gambling” and “unrealistic expectations”. After all, these “investments are long term”. Calpers has a historical 9% return on investments. Govt. Bonds will not get you 9% unless we return to 1982 and if that happens the middle class is screwed worse than what you are imagining it is now. You think funding primarily with govt. bonds is prudent, I completely disagree. Is that your retirement portfolio? Enjoy using your EBT card.

        Reply

        • silasBarnabe

          March 15, 2015 @ 6:29 pm silasBarnabe

          All this tough talk about Calpers rate of return and what idiots we are for questioning it. Last year the State contributed about $4 billion to cover Calpers shortfalls, how about removing the bailout clause from the State Constitution and then you can talk all the tough talk you want about Calpers being self funded?

          Reply

        • March 15, 2015 @ 8:13 pm John_K

          It’s one thing to gamble with your own money, but how can you justify risky investments using taxpayer money? I suspect you may be way overstating CalPERS 9% return, because the results simply ain’t there. Proof in the pudding? Underfunded, skyrocketing taxpayer contributions required. IF CalPERS investment strategy is actually sustainable, then why do we have ever-increasing taxpayer contributions required? Lots of folk lost part of their retirement when the market crashed, folks working in the Private Sector; but not CalPERS members. They got the taxpayer bailout. What types of investments was CalPERS making when the market crashed? Would have been much better with Govt. Bonds.

          Reply

  6. March 15, 2015 @ 12:38 pm drbob

    As I get it, many municipalities elected to make the Calpers contributions for any given employee only after that employee retires. This cost deferment costs “only” the 7.75% increase that was the target for the fund’s investments. These municipal debts are the only part of the Calpers portfolio that has (on paper) grown at this rate. Instead of paying pension contributions when earned, and taking advantage of the “miracle of compound interest”, Vallejo finds itself being bitten by the years ago decision to not keep funding current.

    Reply

    • March 15, 2015 @ 8:10 pm John_K

      Did that decision to “not keep funding current” happen when Vallejo was approaching or into insolvency? I recall that the city stopped some CalPERS payments during bankruptcy, but that was not avoidable. Prior to that, CalPERS had assured everybody that increased benefit promises would not cost anything, because the investments would never lose… Mister Market was on an eternal ascent, so promised CalPERS.

      Reply

  7. March 15, 2015 @ 4:46 pm Anon

    If you want to help the city? Lobby to have them stop giving a voluntary additional 36% to fully fund the phony threat (very very phony) of an unfunded liability. Why is that a worry if a Federal Judge (Klien) ruled that Calpers distributions are subject to adjustment in bankruptcy?

    Reply

    • March 15, 2015 @ 8:12 pm John_K

      I don’t wish to see retiree benefits on the table in a future bankruptcy. Who does? Vallejo is paying extra because the threat is not phony when it’s an unfunded liability that results in skyrocketing taxpayer contributions to CalPERS… it’s like a payday loan scheme… we can pay it off, or continue to be subjected to the loan shark demands of increasing interest. CalPERS is looking more and more like a danged Pyramid Scam.

      Reply

      • March 16, 2015 @ 8:49 am anon

        In the 1980’s Calpers was about 55% funded. Nobody cared. In 2000 Calpers was 130% funded. Today it is about 70% funded. Calpers conservatively uses an assumed 7.5% retun to calculate it’s amortization schedule, but, has a 20 yr historical 9% return on investments. Moody’s assumes they should (like you) be using a govt. bond rate of 4% ROI to calculate their amortization schedule? Why(?) when historically Calpers has been 5% higher. So, the “skyrocketing” taxpayer contributions to 100% fund the pension liabilities is self inflicted and unnecessary. A phony crisis.

        Reply

      • March 16, 2015 @ 2:06 pm Anon

        Silas, you want 100% financing (as Bornstein states Calpers was in 2007). JohnK wants it done with govt. bonds as the primary securities. One of you will have to compromise as 100% funding will not happen with Federal and municipal bonds. Sorry, that is the simple truth. Using that investment strategy (limiting investment opportunities to bonds that only do well during times of poor economy and exhorbitant interest rates) Calpers will end up a lot like the private sector (United airlines:2005). Nobody wants that? Well, almost nobody 😉

        Reply

        • silasBarnabe

          March 16, 2015 @ 6:45 pm silasBarnabe

          @Anon,
          John K and I do not need to come up with any sort of compromise if unions and corrupt city leaders would stop handing out pensions that require risky investments to fund…

          Reply

          • March 17, 2015 @ 7:20 am Anon

            “Handing out pensions”? The city does not ‘hand out’ pensions. Is your beef with the COV or the agency (PERS) contracted to manage pensions?

            We have gotten off track from Schussel’s article. It would be nice to have an explanation why Napa (a poorer community) pays more than Vallejo per hr for PS?

  8. March 16, 2015 @ 8:46 am Bong Hit

    Something has to give, the democrats are running out of other peoples money to spend on desk jockeys that earn massive amounts of money. I foresee the taxpaying public giving the green light to keeping public safety pay and benefits in tack but bureaucrats? No way Jose, you’ll see the general public begin to question why there is a need to pay public paper pushers far above the private sector workers.

    Bay Area Water Managers Take Home Massive Paychecks During Drought
    http://www.breitbart.com/california/2015/03/1

    A new investigation into executive pay at the four largest Bay Area water districts revealed that many of the region’s top water managers take home massive paychecks, despite the onset of a fourth year of drought in California.

    According to the Bay Area News Group, the top executives at each of the four largest Bay Area water districts–the San Francisco Public Utility Commission, Contra Costa Water District, East Bay Municipal Utility District, and the Santa Clara Valley Water District–each took home more than double the paycheck of California’s top government official, Gov. Jerry Brown.

    Leading the way is EBMUD General Manager Alex Coate, who earned $445,000 in salary and benefits last year, according to the report. Meanwhile, Contra Costa Water District General Manager Jerry D. Brown earned $416,000 last year, and SFPUC manager Harlan Kelly raked in $411,000. Rounding out the top four is SCVWD CEO Beau Goldie, who earned $388,o00 last year. Goldie was the only executive among the four districts whose pay did not exceed $400,000, but that recently changed when the District voted to reward Goldie with a $20,000 bonus and a $10,000 raise.

    In comparison, the state’s top government official, Gov. Jerry Brown, reportedly earned $160,000 last year.

    Reply


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