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Contra Costa Taxpayers Association

Richmond's compensation is driving its budget deficit (East Bay Times guest commentary) By Ben Steinberg and Jack WeirEast Bay Times My Word

31 May 2016 1:08 PM | Anonymous

Richmond is required to pass a balanced budget by June 30, but the city suffers from a persistent budget deficit. Recently, the projected deficit amounted to $10.2 million.

To close the gap, city officials propose to cut vital services to residents while largely ignoring that compensation for municipal employees is really driving the deficit.

Even across the board cuts and the elimination of many city programs cannot achieve a balanced budget without fundamental reforms to salary structure and the overall size of the city workforce.

Why? In recent years the city has shifted resources away from providing municipal services to residents while increasing funding for employee compensation.

The city is forcing financially distressed residents in Richmond to swallow these steep costs. According to Transparent California, a nonpartisan think tank that gathers public employee compensation through public record requests, Richmond's fire chief in 2014 earned more than $560,000 in salary and benefits. In fact, more than 20 Richmond employees earned more than $300,000 in salary and benefits while more than 200 Richmond employees received more than $200,000 in salary and benefits.

The average Richmond full-time employee earns $130,000 in total compensation.

When considering that the average Richmond resident earns less than $40,000 full-time in the private sector, these figures become even more shocking.

With just more than 106,000 residents, the average resident pays slightly more than $1,000 in annual compensation to Richmond city workers.

The city is asking its distressed, low-income population to foot an ever-growing bill while reducing services like street paving and library hours. While people want first responders to be fairly compensated, at what point does "fair" become "extravagant"?

In contrast, the city of Albany's police chief, the city's highest paid employee, earned $255,000 in salary and benefits in 2014. While the median resident earned more than $80,000 annually, the average Albany resident pays approximately $700 annually toward public employee compensation, $300 less than neighboring Richmond.

Additionally, Richmond's workforce appears to be bloated. With a population of 106,000, Richmond has 735 year-round, full-time employees.

Although nearby Concord has a larger population of 125,000, it only has 319 year-round, full-time employees. While Richmond has one city employee for every 144 residents, Concord only has one city employee for every 390 residents.

When including part-time employees, Richmond pays total compensation of $116 million total for all city employees. Concord, on the other hand, only pays about $54 million.

In 2014, Richmond urged voters to pass Measure U, a half-cent sales tax deemed necessary to fund essential city services, like the pavings of roads. After Richmond voters dutifully passed Measure U, the city manager and City Council within weeks redirected Measure U proceeds to plug its budget deficit at that time.

Rather than reform an unsustainable salary structure at that time, Richmond just kicked the can down the road. Unfortunately, as compensation rises, long-term pension benefits costs continue to increase.

If the city manager and City Council cannot rein in these excessive costs, Richmond residents should demand an independent review of Richmond's salary structure and the makeup of its workforce.

This review should indicate market rates in compensation and benefits for city employees, particularly for senior managers and department heads, as well as the typical staffing levels.

Richmond residents must then ensure that the city manager and City Council implement the recommendations fairly. This is the only way to stop the perennial budget deficits and to balance services for residents with affordable compensation for its employees.

Ben Steinberg is a Richmond resident and Jack Weir is president of the Contra Costa Taxpayers Association.


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