11

Fremont readies for labor negotiations

Fremont employee union contracts expire at the end of June. On Tuesday the council gets into labor relations mode with a long report that outlines the rising cost of city employees.

Here’s a snippet:

Major Cost Drivers

This section presents historical information about some of the major General Fund budget cost drivers. As depicted below, the average cost of City employees has continued to increase. Accounting for wages, employer-paid CalPERS costs and the health benefit allowance (HBA), the average cost of Fremont public safety employees has increased from $134,477 in 2007 to $160,427 in 2010, a 19% increase. Similarly, the average cost of miscellaneous employees has increased from $104,567 to $116,488, an 11% increase. The aggregate average cost of all City employees has increased 15% for the same period, from $115,593 to $133,210.

The report also spelled out that if there’s an impasse, the council can impose the city’s last, best offer — two councilmembers don’t have to worry about running for election ever again, but it’s still hard to imagine negotiations getting to that point.

Matt Artz

  • http://fcnisbacon.wordpress.com/ Marty

    Let me guess, a HBA is money the city pays an employee on top of their wage for taking health care with their partners’ private sector employer?

  • Gus Morrison

    Marty, I think HBA means the city provides the cost of the lowest cost HMO (usually Kaiser) to the employee and, if they want a more expensive plan, they have to pay the difference. I don’t think the city pays the employee the cash if they don’t take the benefit (I could be wrong, but I don’t recall it.)

  • http://fcnisbacon.wordpress.com/ Marty

    San Jose pays the employee if they take coverage elsewhere. I’m not sure about Fremont either.

    Again, to beat a dead horse, I am dismayed to see the average cost of a city employee is over $160k/year. This figure makes it difficult to justify service cuts based on poor revenue. There is without a doubt a structural compensation issue in this city.

  • Gus Morrison

    Marty, Each agency seems to have different rules. FUSD pays employees the cost of benefits if they don’t take them. Newark pays the total cost of the benefit package in salary and allows the employees to select and pay for what benefits they want, causing a larger salary when calculating retirement. I’m pretty sure Fremont never paid for benefits not taken, at least while I was there. I always thought the employer should pay for the employee coverage, add the extra cost for family coverage to the salary, and allow the employee to purchase the family coverage. I thought tht would be fair to those without families or whose spouse was covered elsewhere. It also would resolve the domestic partner coverage.

    Your last comment “…structural compensation issue in this city.” probably isn’t limited to this city. I would guess it isn’t much different in most metropolitan area cities and it probably is far worse in cities who have their own pension funds not part of CalPERS (San Jose for one, many counties and special districts also).

    I remember about 20 years or so ago, we were told that it cost us $106,000 to put a police officer on the street, salary, benefits, police car, and other support.

  • bbox231

    “Your last comment “…structural compensation issue in this city.” probably isn’t limited to this city. I would guess it isn’t much different in most metropolitan area cities . . . . . ”

    My kids occassionally used a less-refined variant of this same kind of rationalization. It went something along the lines of “Gee, Dad, EVERYONE else was doing it.”

    - and which is – in part – the kind of “thinking” that has allowed our city (and many others) as well as our state (and many others) to arrive at a veritable precipice of economic failure.

  • Gus Morrison

    Box, my point is we are competing with everyone else for the same employees. There is almost zero in-migration into the bay area, mostly due to housing costs, so we are all trying to hire the best people we can. And, in the perfect econ 101 supply and demand model, where supply is limited, cost goes up.

    Do we reduce our standards? Do we hire less qualified people? Or do we continue to compete for the best we can get? Sure we compete against other cities and agencies, but we are competing just as Intel and AMD compete for the same people.

    We seem to focus on public safety, but the standards are high across the board. City engineers must be registered professional engineers, planners need advanced degrees, other professionals need to be certified or licensed. If cities didn’t hire the best, the critics would be yelling just as loud about that.

  • bbox231

    Yeah – — -

    The standards ARE high.

    But it ain’t the engineers that are consuming the budgets, Gus (and, I think you KNOW that) . . .. . and if you don’t – - there are many, many, MANY, great and competent individuals who are willing to go in harms way to protect and build, and, who earn considerably less . . . . . .

  • http://fcnisbacon.wordpress.com/ Marty

    An entity that creates no monetary value has no business paying the highest salaries for top talent. Good luck trying otherwise.

  • http://fcnisbacon.wordpress.com/ Marty

    Gus, you invoke the concept of supply and demand to make the case for excessive pay. What’s the current demand for city employees in the region?

  • IndependentGuy

    The concept of supply and demand to public employee salaries and benefits ignores a reality that there should be budget constraints — not a bottomless coffer based on levying additional taxes and bonds on its citizens. That said, I’ve also found it hard to believe that citizens keep voting in these taxes/bonds. I stopped long ago. The public sector needs to adjust their expenditures to their revenue streams, same as businesses & even non-profit agencies. If revenues are down, it’s time to restructure & downsize employees & services. Not putting additional burden on the taxpayers.

  • Tony Irvington

    We seriously need to find some Top Talent on the city payroll who’s cosmopolitan enough to figure out the logistics, and crunch the necessary numbers so that we can get Osgood Road paved in this decade.