Strong-arming the budget

Brian Nakamura was Chico’s highest-paid city employee last year. That’s no surprise, since he holds the city’s top post of city manager.

But for the four years preceding 2013, Chico’s top administrator was not No. 1 on the city compensation chart. From 2009 through 2012, that distinction went instead to Dave Main, one of the city’s 18 fire captains and lieutenants.

From 2007 through 2013, as Main worked thousands upon thousands of overtime hours, his annual compensation averaged $282,000. The city manager in Chico during the same period averaged $283,000—just $1,000 more a year in pay and benefits, according to calculations by the city Finance Department.

While Main has worked staggering sums of overtime for many years, his numbers in 2010 seem almost unbelievable:

• Overtime hours: 2,366.

• Total work hours: 5,278.

• Overtime pay: $122,616.

• Total pay and benefits: $314,000.

Main averaged working nearly 14 1/2 hours a day—every single day—for all 365 days of 2010. His overtime pay alone that year was nearly three times what the U.S. Census Bureau says is Chico’s average annual household income: $43,000.

This past year, Main once again led the city in overtime, logging 1,350 hours that earned him more than $78,000 in extra pay and bumped his total compensation to nearly $286,000. The city was reimbursed for 317 hours of that overtime because he was working state or federal fires outside Chico.

Hefty levels of public safety overtime are just one chapter in a much bigger story of a city budget that is now largely dedicated to compensating those employees that most citizens value most: police and fire personnel. Their compensation consumed a lofty 82 percent—$29.1 million of $35.4 million—of last year’s general fund, the only money over which the City Council has spending discretion.

“That’s pretty high [for just public-safety compensation],” said Chris Constantin, the city’s director of administrative services. “It depends on the priorities of the city. Parks and quality-of-life issues are almost as close in importance, so we cannot neglect that.”

In the aftermath of deep city spending cuts—and with Mayor Scott Gruendl’s recent warning of more bad financial news ahead—Chico dentist and self-proclaimed moderate Michael Jones says he would like the community to have a debate about budget priorities. But such a debate is pointless until dollars are freed up by further police and fire contract givebacks, he argues.

Jones, along with Kelly Skelton, a proposal writer for a consulting firm, created what the mayor called a “very fascinating” graph the two have been parading around town in recent weeks (see it at their website, “Moderation is no Vice,” at www.chicopolitics.com ). Using 2012 data from the state Controller’s Office, the graph shows Chico to be 25th among the state’s 482 cities for highest-compensated employees. The average city of Chico employee that year earned $99,585 in wages and benefits.

Jones said the controller’s data suggest to him the city provides “Cadillac” retirement and health benefits to its employees, with Chico ranking 44th in pay but all the way up to 15th statewide in benefits. Chico’s staff in 2012 averaged $67,645 in wages, or about $5,500 more than the statewide average. Much more striking is the almost $32,000 average in benefits provided to Chico city workers, which is about $14,500 more per employee than the state average for municipal workers of $17,500, according to the controller’s data.

The Jones-Skelton chart shows Chico paying its employees more than workers earn in Stockton and San Bernardino—cities whose bankruptcy filings some have attributed to employee pay and pension obligations. In order to move to the midway point on the state chart, Chico city workers would have to average $40,000 less in annual compensation.

Constantin says two factors influence Chico’s high ranking on the controller’s pay list: large amounts of overtime in public safety and relatively few lower-paying jobs. Beverly Hills, whose city workers average $90,969 in pay and benefits ($8,600 less than Chico’s), likely has many more lower-paid parks and recreation workers than Chico, he said.

Still, Constantin thinks the controller’s report, because it considers “Medicare-only wages,” actually underreports city compensation. His calculation has Chico workers averaging $108,593 in 2013. According to Constantin’s numbers, Chico’s average police officer made about $136,000 in total compensation, while its firefighters averaged about $159,000.

Jones said that for some fire personnel to work so many overtime hours “does imply that the job is not all that demanding.” And he thinks it’s “really weird” that, during dire financial times for the city, the fire union local paid for its own so-called “forensic auditor” to scour the budget for dollars.

“They’re acting like it is a marriage and the money is community property,” Jones said. “It’s not their money.”

Jones and Skelton’s website is often critical of Chico’s public-safety unions. In one post, Skelton blasted the city’s pension costs as excessive: “We cut services to poor, homeless, women and children, no Caper Acres, so 50-year-olds can retire 15 to 20 years before their fellow citizens, receiving 90 percent salary, without a meaningful contribution toward their own pensions. What’s wrong with this picture?”

The picture is beginning to change—though not as much or as quickly as Jones and Skelton would prefer. On Feb. 18, the council settled with its three police bargaining groups, including the Chico Police Officers’ Association. The CPOA agreed to a one-year deal that will save the city $831,000 in reduced benefits to union members.

Those savings, as well as firefighter concessions that will total $1.8 million over three years, were mostly achieved by ending the politically out-of-favor practice of paying the employees’ share of pension costs to the California Public Employees’ Retirement System (CalPERS). Under the state Public Employees’ Pension Reform Act of 2012, employees must pay their own pension contributions by 2018.

At recent City Council meetings, Assistant City Manager Mark Orme has stroked the public-safety unions big time, using such terms as “amazing,” “incredible,” and “stepped up huge” to describe their givebacks. Firefighters accepted a pay reduction that the union pegs at about 8 percent, including the end to a $350-a-month health fund contribution from the city. In the police deal, a city health fund contribution to employees was reduced from $300 to $100 per month.

In total, city employee concessions this year exceed an “astounding” $3.4 million, Orme told the council last week. “Candidly, it’s rare that you ever see this happen in a municipal agency,” he said. “The dire circumstances unfortunately predicated that we had to move this forward in the way we did.”

Jones is not as enamored with the union concessions, roughly pegging the recent reductions in police and fire compensation at 5 percent to 6 percent of their total pay and benefits packages. “I think they were overcompensated about 30 percent, so I think they are still overcompensated,” Jones said. “All city services are suffering because we overcompensate police and fire, and that includes police and fire, which are understaffed since we pay the existing employees too much.”

At that Feb. 18 meeting, the City Council also put an end to a remarkable benefit that has served to jack up city employees’ retirement pensions for many years. In the past, whenever the city paid the employees’ shares of the PERS contribution, that amount was treated as “pensionable pay” for those employees. For police and fire workers, the PERS employee contribution is 9 percent of salary, so the impact of such pension padding on a retiree’s lifetime income is significant.

For example, when Mike Maloney retired as Chico police chief on or about his 50th birthday in April 2012, he had worked more than 30 years in law enforcement. From CalPERS, he was entitled to 90 percent of his highest yearly salary for life. Maloney’s salary in 2011 was $158,000. Adding 9 percent to that figure—just because the city was willing to pay his CalPERS share for him and treat the amount as “pensionable pay”—elevated Maloney’s highest salary for pension calculations to at least $172,000.

Further, as a result of CalPERS cost-of-living adjustments, the 51-year-old Maloney’s annual pension will soon be higher than his highest salary—and it will continue to grow with each passing COLA. For life.

While city officials have heaped praise on the unions for their recent concessions, a very different posture toward labor was on display in October when Nakamura and Constantin fielded questions on the state of city finances at a Chico Tea Party meeting.

Part of the difficulty of cutting the budget, Nakamura told the group, is that the city must negotiate with police and fire workers who are backed by powerful national and international unions. “It’s not just the little [Police Officers’ Association] of Chico, it’s the POA national that will come in and say, ‘OK, we’re gonna fight.’ And then you look at us and say, ‘We don’t have the legal resources to fight that,’” the city manager said.

Constantin, who said he has worked as a police officer in Hayward, suggested that police unions try to scare the community when cuts to cops are contemplated. And Nakamura made reference to “a room full of red shirts” whenever changes are proposed that may eliminate jobs in the fire service.

Constantin told Tea Party members he was amazed to find that when he first sought to pay his own entire pension share in Chico, he was prohibited from doing so by an agreement with one of the city’s nine employee bargaining groups. When asked at the meeting whether city employees would be required to pay their own pension contributions, Constantin chose his words carefully: “We are looking for all of our unions to live within a reality that what we had in the past can’t be something we’re going to have in the future.”

While paying overtime is generally cheaper for the city than hiring new employees, Constantin says it can come at a price.

“The more hours [an employee works], the higher risk of fatigue and … of making mistakes and … of impacting your family life,” said Constantin, who noted that the Fire Department’s occasional closures of certain stations have helped keep overtime hundreds of thousands of dollars under budget for the first half of this fiscal year.

Firefighters in Chico work 56 hours a week before being paid overtime. A common shift is 48 hours on duty, 96 hours off. Fire personnel willing to work overtime put their names on a list. Once an employee works 16 hours of overtime, his or her name drops to the bottom of the list. A captain such as Main is paid his regular overtime rate even when subbing for a lower-paid firefighter.

“How the overtime is dealt out, Dave Main has very little control over who gets picked,” said John Kelso, president of Chico local No. 2734 of the International Association of Fire Fighters. “He makes himself available. So as crazy as you and I might think it is, his work ethic is ‘never leave a seat unfilled.’”

Main, 54, has worked 25 years for the Chico Fire Department. A Chico High graduate, he served in the Army’s Special Forces before becoming a firefighter. In 1991, as a reservist, he was called up to the Gulf War, where he lost a ring finger. He is stationed at Fire House 2 on Fifth Avenue, across The Esplanade from Enloe Medical Center. It is the city’s busiest stationhouse and the “hub” of the department, Kelso said.

Main, who has been married 25 years “to the same woman,” sat down at Station 2 on a recent Sunday evening to discuss his job and his pay. Sixteen hours earlier, on the same 48-hour shift, he was dispatched to the alleged DUI crash that killed two Chico State students and left a third hospitalized with major injuries. It was a complicated accident to work and a sickening scene to witness—even for a war veteran and longtime firefighter.

“They’re more slides you have in your tray” of haunting images witnessed on the job, Main said.

Besides increasing his income, Main said he works so much for two reasons. First, he was raised to believe that “a person should work” when work is available. Second, his commitment to the fire service “supersedes” personal pleasures.

“If you don’t have relief, you don’t go home. That’s the pact you make with the city when you put this on,” said Main, pointing to his badge.

He said Fire Department records indicate he went on about 1,200 calls in 2013. Those calls included working two fires outside Chico on assignments that typically last days or even weeks and for which the city is reimbursed his pay, plus 10 percent for administrative costs.

Main said he does not believe his pay of $37.30 an hour is out of line after 25 years as a firefighter and “three highly, highly competitive promotions” to captain. He receives $55.95 an hour on overtime.

In all his years on the job, Main said he has been out on worker’s comp for “for less than one shift” due to injury.

While Main may have no peer when it comes to working overtime, he has plenty of company among Fire Department managers near the top of the city’s 2013 list of highest-compensated employees. Three of the top six earners are fire captains, while a fourth is acting Fire Chief Keith Carter. No fewer than 11 of the city’s top 14 earners in 2013 were Fire Department employees.

Police Chief Kirk Trostle ranks seventh in compensation behind Nakamura, City Attorney Lori Barker (third place) and the four fire managers. After Trostle, the next police employee on the list is Sgt. Scott Ruppel at No. 15. Ruppel’s 636 hours in overtime at a cost of $46,500 topped the department in 2013.

Police Lt. Linda Dye, who retired in December at age 50 after 26 years with CPD, was the city’s 16th-highest-paid employee last year. Dye’s $227,664 in total compensation included a $24,600 “cash award” to settle a claim for damages. The claim, filed in February 2012, cites unspecified civil rights and equal pay violations that she was “ordered” at the time not to discuss.

In fall 2012, Nakamura took the reins of a city government that had spent itself to “the brink of insolvency,” in the words of Councilman Mark Sorensen. Various city reserve funds had been depleted by a total of $20.5 million since 2007.

The depth of the fiscal hole was not known until Constantin’s arrival to head up city finances last March. Within a few months, the council had made $4.8 million in budget cuts that hit every department. Another $800,000 in cuts would follow in November. The only employees exempted from layoff were those who wore badges, which served to increase public safety’s portion of the general fund pie.

Trostle issued a strongly worded press release in June in which he said Nakamura’s plan “bulldozes the police department.” Eliminated were the police’s mounted enforcement team, riot response force, Street Crimes Unit, community policing team, Gang Unit, Traffic Unit, and school resource officers. The Detective Bureau was cut from nine to five detectives. Only the Gang Unit has since been restored.

As the recession hit in 2008, Chico had about 80 officers on its police force. That number had fallen to 62 officers by mid-2013, but is back up to 66. To restore all of the police programs cut last year, Trostle said Chico needs 83 officers. The City Council wants to add five new officers in the 2014-15 budget, to a force of 71, if finances are stable.

Late last year, Constantin brought to the council a 10-year plan to pay back the $15 million in remaining debt at the rate of about $1.5 million annually. The fire union preferred a longer payback period in order to “salvage some services,” Kelso said.

Only one council member opposed the strategy: Sean Morgan.

A lecturer in management at Chico State, Morgan was backed for council by the Chico Police Officers’ Association, the city’s most combative employees union. Some council observers perceive Morgan as close to CPOA—a perception he expressed surprise over.

At the Dec. 17 council meeting, Morgan noted that the city’s principal spending goes for “pensions and salaries” in the police and fire departments.

“I don’t think we can afford to cut from those two places,” he said.

Morgan proposed that instead of committing $1.5 million to debt repayment each year, that amount be split 50-50 between eliminating the debt and public safety “until we get our 83 cops.”

Randall Stone, who claims to be the only council member elected without the endorsement of at least one public employees union “in recent decades,” argued during budget meetings last year that Chico could not afford its levels of public safety compensation.

In November, Stone filed a complaint with the Police Department after he found what he considered racist and homophobic content on Police Officer Todd Boothe’s Facebook page. Boothe also was accused of writing that Stone was an “asshole” and “incompetent” on the councilman’s Facebook page.

Stone copied some of Boothe’s 2009 content to his own Facebook page and was criticized by both the police union and Trostle for at least indirectly tipping the news media to a confidential investigation. Officer Peter Durfee, president of the CPOA, quickly called a press conference to blast Stone, accusing him of putting Boothe’s safety at risk and violating his free-speech rights. To Juanita Sumner, president of the Chico Taxpayers Association, the Stone-Boothe controversy was less about racism or free speech than about cops not wanting to pay their own CalPERS contributions.

Some observers were surprised that Councilman Morgan, whose campaign the CPOA backed with a $5,000 contribution, showed up at Durfee’s press conference.

Morgan was interviewed off camera, making this statement quoted on that night’s TV broadcast: “It’s unfortunate an elected official would make the identity of a police officer known, thus endangering the officer and his family’s safety.” Morgan declined to be interviewed for this article, citing negotiations.

Durfee also spoke on behalf of the CPOA at the Nov. 19 City Council meeting. His criticism of Stone, if anything, intensified as he urged the councilman to recuse himself from all dealings involving the police union.

“This association protects your streets, your families and the city,” Durfee told the council. “It’s hard to protect from the front while you’re getting stabbed in the back.”

The seemingly ever-present Durfee was back before the council Feb. 4, criticizing its decision to increase the amount the city is paying a “hired gun” to negotiate with unions. Councilman Sorensen called Durfee’s comments “beyond hypocrisy” since CPOA hires its own outside negotiator while not wanting to have one protecting taxpayers.

Durfee said in a recent interview that most other city services are “frills” if they come at the expense of community safety. He described the gang problem in Chico as “running rampant” while the Gang Unit was down.

“It’s nice to have all these extra things that we’ve had in the past—the art, the parks, the leaf service—that stuff’s great,” he said. “It’s nice to have a beautiful park, but if it’s not safe to walk in, what do you have?”

Jones and Skelton see it differently. They say “elitist” city compensation levels, especially for police and fire personnel, not only hurt public safety but serve to crowd out other services. For that to change, citizens will have to “stand up” to the police and fire unions, Skelton said.

“I think they have a mob mentality,” she said. “They’re holding us hostage.”