The Santa Ana City Council, facing a projected $600,000 budget shortfall this year, Tuesday approved an additional $1.5 million in raises for city employees.
The raises are mainly for non-police employees like park rangers, accountants, and building inspectors, and also include a 2-percent mid-contract raise (totaling $190,000) for non-sworn police employees.
The non-police employees, who are represented by the Service Employees International Union, will receive a 2.25 percent base salary increase, retroactive to Sept. 1, 2017, plus expanded benefits for cashing out vacation time. The general employee raises are projected to cost the city an additional $1.35 million this fiscal year.
The City Council previously approved a $2.7 million per-year raise for police employees in July, with raises between 5.6 percent to 10.6 percent for officers and sergeants.
Both of the new raises were approved on 6-1 votes, with Councilwoman Michele Martinez opposing.
“I believe all of our employees deserve a raise, but unfortunately financially the city is not in a good position to be giving raises,” Martinez said just before the contracts were approved.
The city’s projections for revenue growth are less than the pay raises, she said, adding the city’s costs will also increase due to rapidly rising employee pension and medical costs, and ending the city’s allegedly illegal transfers of trash fees for general services.
“Pension costs…are going to increase, and they’re going to increase severely. and that is tied to these raises,” Martinez said, adding she wants the city to be “sustainable” now and in the future.
None of the other council members responded to Martinez’s concerns or spoke about the raises before Tuesday’s vote.
An auditor hired by the city told council members earlier this year the city’s funding shortfalls are expected to worsen as pension costs increase while revenues slow down and potentially decline.
“Pension spikes” are going to hit cities “hard,” said the auditor, Mark Alvarado of Kelly Associates Management Group, at a council meeting in June.
The city’s pension costs are up by $22 million per year since 2014 and continue to climb.
City Council members didn’t say how they planned to pay for the raises they approved this week.
During the fiscal year ending this past June, the city spent $390,000 more than it earned, and city staff recently projected a $600,000 deficit for the current fiscal year, without taking into account the new raises. Council members and the general employees’ union president have talked about seeking a sales tax increase to help cover the city’s bottom line.
The city staff reports explain the raises as resulting from contract negotiations with the employee unions.
Cities often evaluate employee raises by conducting surveys that compare their compensation with similar jobs at other cities. Council members did not have that information before they authorized the raises Tuesday, according to city staff.
The city’s compensation study for the general employees was not finished before the council’s vote on the contract and those numbers were not shared with council members, said Julie Castro-Cardenas of the city manager’s office.
General employees have said over the past few months their pay is less than their counterparts at other cities, and that they’ve made sacrifices through effective pay reductions during and after the Great Recession.
That mid-contract change for the police union also allows police employees facing discipline to have their appeal heard by a hearing officer before it goes to the city’s personnel board, if the city agrees.
The general employees’ union had been operating on an expired contract in the months since their last contract ended June 30, prompting some of its members to question whether the council has a double-standard stemming from how much campaign support each union provides.
During the last City Council election, the police officers’ union spent $400,000 to support council candidates they endorsed – more than any other Santa Ana election spender, by far – while the general employees’ union spent less than $2,000, according to campaign finance reports.
The police union’s contract expired the same day as the general employees, June 30. Council members approved the police union contract five days later, on July 5, and the general employees waited five months for their contract to be approved.
“We’ve heard the city leadership say for months how we have a shortfall when it comes to money…But even before we knew we’re gonna fill some of the budget shortfalls, you found a way to give one of our bargaining units a nice raise,” said Kim McPeck, a city employee and member of the general employees’ union bargaining committee, in public comments to the council in August.
“They say at least…a third of those [police union] members got at least an 8-percent raise. Why are you willing to find money for them, and nobody else?” he asked, saying he was reading comments prepared by another union member.
“We are not naive. We see behind the curtains. Is this council sending a message to us that we have to support one of your campaigns to get more money and a fair contract?”
Council members didn’t directly respond to McPeck’s comments, but said they hoped to find the money to provide raises for the general employees.
Nick Gerda covers county government and Santa Ana for Voice of OC. You can contact him at ngerda@voiceofoc.org.