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.