Amid Funding Shortfall, Santa Ana Raises Median Police Compensation Above $213,000

The five council members who voted to approve the new police contract. From left: Jose Solorio, Sal Tinajero, Mayor Miguel Pulido, Vicente Sarmiento, and Juan Villegas. (Photos by Jeff Antenore and Nick Gerda.)

Santa Ana council members approved pay raises Wednesday for 477 police officers, sergeants, and other police department employees, amid city staff projections of major funding shortfalls that could require millions of dollars from reserves to make ends meet.

“I think that this proposal is modest, given the need in this town,” said Councilman Jose Solorio during the council’s discussion just before approving the contract. He said the increase will help with recruiting new officers and retaining experienced officers.

Santa Ana officers are typically paid 20 to 25 percent “below market,” which drives recruits to other departments, Solorio said. “We’ve got to stay competitive,” he said.

Before the new labor contract, the median total compensation for a Santa Ana officer was about $213,000 per year, including $111,000 in pay before overtime and $88,000 in benefits, according to city data published by Transparent California.

The starting salary was $77,000, plus extra pay opportunities like $1,900 per year for being fluent in both English and Spanish. (About 80 percent of city residents are Latino.)

The new contract raises the base salary for officers and sergeants by 5.6 percent to 10.6 percent, depending on seniority and work schedule. At least a third of officers will receive raises of 8.1 percent or more.

Staff attribute the citywide budget shortfalls mostly to sharply increasing pension costs for retired employees (up $22 million per year since 2014 and continuing to rise, largely due to police pensions) and the cancellation of the city’s jail contract with U.S. Immigration and Customs Enforcement (a loss of $11 million per year).

And staff say the shortfalls, projected at about $9 million per year for the next two years, are on track to increase in future years as pension costs continue to rise faster than the city’s revenues. The situation has sparked interest among some council members to put a tax increase before voters within the next year.

In return for the pay raises, police employees agreed to increase their contributions for pensions and cap the city’s payments for their medical costs at current levels. These changes are projected to save the city $1.1 million of its additional $3.8 million cost for the contract this fiscal year.

For the remaining cost, city staff say they’re confident they can absorb it into the existing police department budget, through shifting jail employees to different positions, charging overtime to non-general fund revenue streams where appropriate, and extra revenue from unpaid parking citations.

If that doesn’t pan out, staff say they’ll notify the council and recommend ways to raise more revenue or draw an additional amount from reserves.

“All of us are feeling pretty confident that this was a very good plan,” Interim City Manager Cynthia Kurtz said in an interview Thursday, referring to the views of staff. “But if something doesn’t come to fruition, we’ll be back to tell the council.”

The new one-year labor contract with the Santa Ana Police Officers Association, which covers 293 sworn officers and sergeants and 184 non-sworn Police Department staff, was approved on a 5-2 vote of the City Council.

Voting in favor were Mayor Miguel Pulido and councilmen Solorio, Juan Villegas, Vicente Sarmiento, and Sal Tinajero. Opposing it were Michele Martinez and David Benavides.

The council also gave final approval Wednesday to a budget for the 2017-18 fiscal year, which began July 1. It includes $65,000 for a new legal defense fund for unauthorized immigrants, $35,000 to create a police oversight commission, and a new city position to coordinate youth services across the city.

Supporters of the new police contract agreed with Solorio that the raises are needed to bring Santa Ana up to market rate, and noted the officers’ concessions, which are projected to reduce the city’s costs for the increase by about 29 percent.

Martinez and Benavides said they support the officers, but that the city simply can’t afford the increase.

“I can’t support this, because we cannot sustain this in the long term” as employee pension and health care costs continue to grow, said Martinez. She also questioned whether the city was truly paying below market, as Solorio said.

These types of cost increases, Martinez said, will ultimately push the city to the brink of bankruptcy like it was a few years ago. By the 2019-20 fiscal year, Martinez said the city will “find ourselves in a hole, and I don’t think we’re gonna get out of it this time.”

Tinajero’s vote appeared to reverse an earlier position he held. Pointing to the projected funding shortfalls, he said in May officers “need to be rewarded, but we also have to do it in a manner that we can sustain.”

Just before the contract vote Wednesday, Tinajero seemed to agree with Martinez’s position that it’s not sustainable.

“I’m going to be honest, what Councilmember Martinez states is not inaccurate,” said Tinajero, before voting for the contract.

Tinajero said he’s focused on raising city revenues, and he and other council members are trying to ensure Santa Ana don’t fall far behind the market rate for officer compensation.

As for the market rate comparison, Kurtz, the interim city manager, said city staff’s analysis found Santa Ana was below the officer pay rate for comparable cities by a couple of percentage points.

Kurtz said she wasn’t able to immediately provide a copy of the analysis, but that it looked at cities of a similar size and level of service, and within the same geographic pool Santa Ana would be competing with.

Voice of OC reviewed police compensation data for Santa Ana and the other two largest cities in Orange County, Anaheim and Irvine. The review found that before Wednesday’s pay raise, Santa Ana was already compensating its officers more than its two largest neighbors.

Santa Ana’s starting salary for officers was $4,400 higher than Irvine’s and $6,100 higher than Anaheim’s. And last year, median total compensation for Santa Ana officers was higher than Irvine and Anaheim, both with and without overtime included.

At the council meeting Wednesday, representatives of the city’s 400 full-time and roughly 400 part-time general employees, who are in negotiations for a new contract, called on the council to treat them equally to their police colleagues.

“You don’t want [your employees] to walk away demoralized,” said Mike Lopez, president of the general employees’ union, SEIU Local 721. “All of your city family should be treated the same.”

Joining him were dozens of city workers represented by SEIU, who wore purple shirts and applauded energetically when speakers called for equality.

The new police contract increases base salaries by 2.75 percent retroactive to July 1, plus another 2.75 percent salary increase in January based on the new pay rate, for a total base increase of 5.6 percent.

In addition, a new longevity pay program would increase base pay by another 2.5 percent for sworn officers and sergeants who have served with the department for more than 15 years. And a new “shift differential” pay increase of 2.5 percent would apply to officers who work at least 4.5 hours of their 12.5-hour shift between the hours of 5 p.m. and 7 a.m.

In turn, the employees have agreed to increase the amount they pay toward their pensions from 9 percent of their pay to 12 percent, and cap the city’s medical contributions at their current rate.

The overall contract covers 477 employees at the Police Department, including police officers, sergeants, 9-1-1 dispatchers, and jail correctional officers.

Due to the projected budget shortfall over the next fiscal year, the council last month authorized staff to draw up to $9.3 million from reserves this fiscal year to cover the deficit.

Among its provisions, the proposed contract requires the city to adopt a new Municipal Code section related to employee discipline. It would require that if a city employee is placed on leave or fired, and the discipline is not upheld on appeal, the employee is entitled to full back pay.

The agreement doesn’t specify whether the employee is entitled to the back pay if the discipline is reversed on a lower level of appeal, such as the city Personnel Board, but upheld on a higher level of appeal, such as a Superior Court judge.

The proposed contract would also give certain employees facing layoffs a right to return to a different Police Department job they once held, instead of being laid off.

The City Council previously voted to significantly downsize the city’s mostly-empty jail in the next fiscal year.

Under the proposed contract, the police union’s president, Serrano, is fully released from his job duties as a police sergeant, while receiving 100 percent of his city compensation.

Last year, he made just under $189,000 in pay and $127,000 in benefits, for total compensation package of nearly $316,000.

This new provision “clarifies an existing agreement,” city staff wrote in their report about the contract.

To compensate the city for Serrano’s pay and benefits, all employees represented by the union each donate one “floating holiday” each year to the city.

Under the contract, the police union president also receives a “confidential premium,” which increases his pay by 35 percent. It’s defined in state law as “compensation to rank and file employees who are routinely and consistently assigned to sensitive positions requiring trust and discretion.”

This premium for the union president is a long-standing provision in the city’s contracts with the police union, according to staff.

City staff say they can’t calculate the new contract’s ongoing cost impact after the current fiscal year, due to potential changes in retirement and health insurance rates.

Staff also said they can’t project how the new contract will affect the city’s future pension costs, because it’s affected by potential future changes by CalPERS to city contribution rates and the number of sworn employees at the city.

The police union is by far Santa Ana’s most significant election campaign contributor, with over $400,000 spent on last year’s City Council and mayoral races, including support and attack ads. It is widely expected to be a major spender in next year’s city election as well.

Nick Gerda covers county government and Santa Ana for Voice of OC. You can contact him at ngerda@voiceofoc.org.

  • Jose Tapia

    Maybe the city council should start considering outsourcing the police department just like they did with the fire department. Something to think about. Giving police officers a raise makes absolutely no sense when city is millions in the red. Sal Tinajero is termed out. The only thing he has to gain is a POA endorsement if he ever decides to run for mayor or state assembly. Jose Solorio and Juan Villegas… well you know who owns them. YES. The POA. Vince Sarmiento has no backbone which makes me wonder why Miguel Pulido changed his mind and decided to vote in favor of the $65,000 for the immigration legal defense fund that was heavily supported by Vince. Seems to me like there may have been some vote swapping going on again.

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  • Ken Churchill

    According to the CalPERS 2015 actuarial report for Santa Ana the pension costs for Fire and Police will hit $38,717,655 by 2023. That amount is almost exactly equal to the 2016 payroll amount $38,763,416. So in 6 years pension costs will equal 100% of today’s payroll even before this increase.

    It is difficult to reduce pension formulas, but since the pension formula is years of service x 3% x final salary increasing salaries just keeps digging a deeper hole. The City Council should have negotiated a lower formula in exchange for the raise but they didn’t.

    But rest assured Santa Ana’s City Council is not any different then any other in California except for the City of Fresno which has a pension fund surplus and an employer cost of 12% of payroll. What did they do differently? No retroactive pension increases.

    • The City Council should have negotiated a lower formula in exchange for the raise but they didn’t.
      Of course they didn’t, THAT WAS THE PLAN! They also cold have FROZE the pension costs as part of the contract, a NEGOTIATED freeze. Didn’t happen. Or they could have required the PoPo to contribute the MAX towards their pensions, a measly 15%. They didn’t. This is a fraud between pubic unions and elected politicians. It could be prosecuted as such, but NO ONE, has the guts to do it.

      • SAWZ

        A lower formula can only be negotiated for new hires. They cannot go backwards without special legislation being passed. Also, a freeze on pensions cannot be negotiated without special legislation either. What is the fraud? Unions have the legal right to interview candidates and advance help in the way of campaign funding according to law. My former union advanced a grand total of $350 toward the campaign of any candidate it endorsed for City Council. If you truly believe fraud was committed in this situation, give your evidence.

        • LFOldTimer

          Why are higher pension formulas retroactive but lower pension formulas are not?

          That’s part of the built-in fraud that’s complicit in the police union – elected official conspiracy.

          The pols get the political donations (bribes) and endorsements. The cops get paid like Phd’s and sweet multi-million dollar pensions at the age of 50-55.

          Those who pay attention and speak the truth see it for what it is.

          • SAWZ

            Because there is currently no legislation in place to lower lawfully vested pension formulas retroactively. In the Amicus Brief filed by then Attorney General Jerry Brown during for the Superior Court Case of Orange County vs. the Orange County Deputy Sheriffs’ Assoc. there is a statement by Brown that says enhanced pension formulas for public employees had always been adopted retroactively from the inception of the defined benefit pension systems for public employees in CA–the first system was founded in 1914 for teachers. CalPERS was founded over 80 years ago. PEPRA 2013 stopped higher pension formulas for all new hires. Firefighters vested in the 3% at 50 formula in my former entity were willing to accept a retroactive lower pension formula a few years ago, because in most cases they do not retire at age 50–they were therefore willing to accept 3% at 55 which had been adopted for newly hired firefighters in 2005. It could not be done, because there is no legislation to allow it.

            You cannot equate endorsements and bribes as to legality. Bribes are activities done in secret. Endorsements are transparent and subject to campaign finance laws. My own public unions interviewed and endorsed candidates for local office. So what–they got a few hundred dollars to fund their campaigns–in my entity an endorsement for City Council meant $350 in campaign assistance. Call it bribery if you want–its not.

          • LFOldTimer

            “Because there is currently no legislation in place to lower lawfully vested pension formulas retroactively.”

            You just supported my argument. More evidence of quid-pro-quo. Not hard to connect those dots.

            “You cannot equate endorsements and bribes.”

            Where did I “equate endorsements and bribes”?

            An endorsement is a show of public support for the election of particular candidate. Police and fire endorsements for political offices have always been highly valued by candidates. The expectation, of course, is we’ll support you if you support us.

            Political monetary contributions by large organizations are furnished with the expectation of some sort of consideration in return. A payback. Otherwise they wouldn’t make the expenditure. Bribes can be viewed as either legal bribes or illegal bribes. The ones you referenced that are done in secret and in violation of law are illegal. But large political contributions that are above board still expect something in return for their donation. So it’s legal – but still with the expectation of a return on investment.

            Political war chests win elections. The candidate with the most to spend generally wins the election. At least the large majority of the time.

            The record shows that those politicians who get endorsements and large political contributions from public safety agencies almost always, if not 100% of the time, vote in favor of generous salary increases and lucrative pensions for sworn personnel.

            In the recent supervisor race the incumbent candidate received an $86,000 donation from the police union. Is it any surprise to you that the candidate has a history of voting in favor of large raises and benefits for the cops?

            This isn’t rocket science.

          • SAWZ

            So what else is new? That’s politics.

          • LFOldTimer

            “So what else is new? That’s politics.”

            No it’s not. It’s corruption. Call it what it is.

            Who called “endorsements” “bribes”? Not me. Go back and reread my comments.

            Political donations with an expectation of quid-pro-quo t*t for tat are certainly legal bribes.

            Do you think the public safety gives tens of thousands of dollars in
            donations to specific candidates with no expectation of favoritism and
            paybacks come collective bargaining time?

            Get real, SAWZ. lol.

          • SAWZ

            I understand that–my point is that if all is done legally, it is politics. If laws are broken and charges are filed and if the players are convicted, it is corruption. You don’t suppose that the Koch brothers expect anything in return for the millions they pour into PACs specified for donations to certain candidates do you?

          • LFOldTimer

            The Koch Bros aren’t part of this subject matter. But to answer your question…….of course they expect something in return for their money. All of them do.

            Just by asking that question it implies that you know it’s a quid-pro-quo system. But for convenience sake you just point fingers at those who are on the other side of the political aisle.

            Just because something is done legally it’s doesn’t mean that it’s ethical or uncorrupt. Obviously, selling votes is corrupt as interpreted by those who believe in a moral code. Is it legal? Sure. It happens all the time. Is it dirty? Yep. You better believe it.

        • NO, wrong again, a new formula going forward CAN be “negotiated”. Trough feeders are only entitled to a “reasonable” pension, not the best they have had in their career.

          • SAWZ

            No–a new formula can be negotiated if it is the return of an old formula. A new formula that has never existed in legislative history cannot be negotiated without legislation or voter initiative. The Judge voicing the “reasonable” opinion said in the same verdict that the legislature could lower an existing pension if it so decided, in the future. Individual entities cannot design their own pension formulas without the legislation needed to allow such.

    • SAWZ

      Individual entities in the State of CA had the legal right according to state legislation passed in 1999 and 2001 to increase pension formulas which were retroactive. It was the responsibility of each to adopt the new formulas or not. The City of Fresno acted frugally–kudos to them. The state never increased its formulas for state miscellaneous workers–kudos there also. I doubtf that every other City Council in CA increased their, respective, formulas. Many cities like my former employer reformed its own retroactive formulas for new hires going forward, years before PEPRA 2013. There is nothing to be gained by continuing to trash entities that adopted the new formulas legally. PEPRA 2013 stopped that, so why do you want to throw the babies not yet born out with the bath water? So that they can live more impoverished lives than you had after you are gone? Personally, I want a decent standard of life available for my great grand children and their children although I will no longer be here.

      • Ken Churchill

        Legally is the key word. I have not found a single city or county that legally increased their pension in accordance with section 7507 of the government code that requires public notification of the future annual cost in dollars prior to its approval. The grand jury’s in Marin and Sonoma County found that the public notification requirements were not followed.

        Also, regarding your post below, you may have missed the MCERA ruling that is now before the supreme court. The appellate court ruled that pensions have always been able to be changed going forward for existing employees and that the only requirement is that employees are provided a “reasonable” pension.

        • SAWZ

          That ruling states that the Legislature can reduce pensions in the future–not the individual entities–so new legislation would need to be passed if they want to make reductions going forward in addition to eliminations of pension spiking and purchase of air time.

          • Ken Churchill

            It is the individual agencies that can change the benefits just as it was the individual agencies that enacted the increases. The liability is between the agency and their employees. It is true however that the legislature could have cleared this up a long time ago with an amendment to the state constitution repealing the California Rule but they never did.

            Also, as the MCERA case points out, it was the interpretation of a court ruling that gave us the alleged California Rule. The supreme court said in the ruling that you should provide something of equal value if you reduce pensions, not that you must do it.

            Being able to reduce pensions going forward for existing employees will save the system and why retirees and current employees should hope it is allowed.

          • SAWZ

            But, the individual agencies enacted changes in their, respective, benefits due to the fact that the laws passed by the California Legislature allowed for such. Prior to the 1999 and 2001 laws, they could not have done that. I did read the Appeals Court’s verdict and it states words to the effect that the Legislature could decide, in the future, to make pension changes just as it had done with those two amendments to PEPRA 2013.

          • SAWZ

            That was done in San Jose in 2012 and there was a mass exodus in that agency’s PD. I am a retiree who is already sending 50% of my take-home pension check to my former employer for my out-of-pocket share of ABC medical insurance for me and my spouse, which is only secondary to Medicare. I certainly will use my voice to warn public agencies against reneging on their pension promises. The only way to make things sustainable is future reform agreements hammered out among the principals at the Table–it happened in my former agency.

        • SAWZ

          I don’t follow legislation religiously. The only information I can find on 7507 says it was passed in 2011. Most of the entities who enacted the enhanced formulas granted in 1999 and 2001 did so long before 2011. Can you point me to information on the existence of 7507 in 1999 and 2001? If that is true, then I ask, “why has it taken 16-18 years to bring this argument out?”

          • Ken Churchill

            Here is the language that was enacted in 1977. It was later strengthen to require the actuary be present at the meeting where the increases were adopted. CalPERS also started requiring proof of 7507 compliance in 2008 because so many agencies ignored the requirement. Notice it is the Legislature or local legislative bodies (County Board of Supervisors and City Councils) that hire the actuary.

            ß 7507. Actuarial evaluations of future annual costs

            The Legislature and local legislative bodies shall secure the services of an enrolled actuary to provide a statement of the actuarial impact upon future annual costs before authorizing increases in public retirement plan benefits. An “enrolled actuary” means an actuary enrolled under subtitle C of Title III of the federal Employee Retirement Income Security Act of 1974 and “future annual costs” shall include, but not be limited to, annual dollar increases or the total dollar increases involved when available.

            The future annual costs as determined by the actuary shall be made public at a public meeting at least two weeks prior to the adoption of any increases in public retirement plan benefits.

            HISTORY: Added Stats 1977 ch 941 ß 1; Amended Stats 1980 ch 481 ß 3.

          • SAWZ

            Thank you for the research. Why has the code been sidestepped for so many years by virtually every agency? Could it be because it is just not practical? So what is the answer? Taking all away retroactively?

          • Ken Churchill

            The rule is simple, hire an actuary to determine the future annual cost of the increase and make it public. I think it got really difficult because of the change in 1999 that made retroactive increases legal. It appears to me it was very difficult to determine the impact of retroactive increases on the cost and they varied wildly. CalPERS said 3% at 50 would add 15.5% of payroll to the cost and 3% at 60 would add 10%. In Sonoma County they said that is would add 7% and 5%.

            The problem is a lot of this is guess work by the actuary. My belief is that when cost estimates were obtained they did not anticipate the number of people that would retire at younger ages so the costs were higher than expected. In Sonoma County the average retirement age for safety went from 56 to 51 and for general employees from 62 to 57. That had a huge unanticipated impact on the cost.

            There are a couple of ways to correct what happened. One would be to say that the increases are not a vested right so that you could go back to the old formulas going forward. Some would also argue that they are void from inception. Then you have the question of what to do about retirees going forward. Do you recalculate their pensions?

            Another idea would be to impose an early retirement discount on the pension amount so people would work until 66 to collect full benefits as they have to with social security.

  • MKinSoCal

    What is especially galling is that the city has stated there is no money for other city workers!

    • The “other workers” do not give SA politicians “endorsements” to get elected.

  • #Respect USA ??

    They’re paying back the union for their endorsements. Politics are so dirty. The citizens of SA need to keep this in mind for the next election, but I doubt they will vote against this council and mayor that is funding their illegal alien defense fund.

    • They’re paying back the police union for their endorsements.

      LOL…I just wrote that…BEFORE seeing your comment!

      • #Respect USA ??

        Great minds. 🙂

  • Jeepers Kevin

    Jose Solborio – He said the increase will help with recruiting new officers and retaining experienced officers. That’s what they about hiring a crooked city manager and a sub par police chief. Yeah we got our money worth.

    • SAWZ

      What evidence do you use to make your statements about the honesty or worth of each of these employees? Or are you just opining?

  • LagunaTri

    How can they even consider a vote when the analysis supposedly showing SA officers are paid less is not available? Shouldn’t that be an attachment to the staff report? I worked in government until I couldn’t take it any more and say with certainly that it all starts like this and snowballs. The fire union will go out and scare seniors, saying they won’t be able to recruit decent candidates if they don’t also get an increase (they ignore the fact that 400+ applicants apply for one opening). That pressure from constituents, along with union election support, is all the spineless, irresponsible Council needs to give in to their demands. The other unions will follow suit–if safety got five to eight percent, we should get something. Even a small increase results in huge budget increases–not to mention exponential future pension costs. These selfish politicians refuse to look beyond the next election and need to start doing their jobs and looking at the future consequences of their actions.

  • David Resendez

    What deal was cut to get vocal opponents of the POA, Sarmiento & Tinajero, to stand down on these raises? Tinajero now probably doesn’t have to worry about a POA-led recall and Sarmiento won’t have to deal with harsh mailers attacking his family.

  • RyanCantor

    “Voting in favor were Mayor Miguel Pulido and councilmen Solorio, Juan Villegas, Vicente Sarmiento, and Sal Tinajero. Opposing it were Michele Martinez and David Benavides”

    Gee whiz. I wonder what the SAPD endorsements will be at the next election?

  • LFOldTimer

    This is a result of legal bribes and political endorsements gifted to the council members by the police union. Santa Ana is on the road to bankruptcy. When the economy goes south (which is inevitable) the city will go belly up. But they still give the cops pay raises from 5.6% to 10.6% with 33% of the cops getting raised of 8.1% or more when the city projects a $14 million dollar budget deficit in the next couple years!!! And once the city gives raises to the cop they city can NEVER take those raises back. HAH! This is the magic of legal bribes and political endorsements. Make no mistake about it.

    Plus, these elected buffoons took $65,000 for the CITY’S PUBLIC TREASURE (tax revenue) to fund CIVIL ATTORNEYS to represent illegal aliens who have been ordered deported by the courts!!! HAH!

    I challenge ANY LEGAL RESIDENT OR CITIZEN in Santa Ana to approach city hall and ask the council to pay for your CIVIL ATTORNEY the next time you need a trust, will or divorce papers drawn up!!! HAH! They’ll tell you to take a flying leap while they fund CIVIL ATTORNEYS for illegal foreigners who aren’t even authorized to be in this country and have been ordered by the courts to leave!!! How’s that for a government of, for and by the people??? lol.

    Santa Ana has to be the most corrupted city government in Orange County. What an embarrassment to western civilization.

  • verifiedsane

    The police state and union owns Santa Ana…..Santa Ana is on the road to insolvency..

  • Jack Milliken

    Gutless politicians who tell everyone what they want to hear. Increase salaries & services without raising taxes to pay for it – everyone gets everything!