But last week, few focused on the pay freeze or the balanced budget before the City Council. Instead the talk of the meeting was a provision buried in the budget that would raise the pay for two police commander slots by approximately $14,000 a year each, in order to pay them more than any of the sergeants they supervise.
The budget, and therefore the measure, passed, but only by a 3-2 vote. Council members Kirsten Keith and Peter Ohtaki dissented after making a failed motion earlier to postpone voting on the pay increase. In supporting the raise, Mayor Rich Cline said that the balanced budget, a new two-tier pension system, and potentially lucrative long-term projects were much more important for the city than the $14,000 salary increase.
The resulting brouhaha proves once again that despite their best efforts, city officials did not anticipate the potential upset triggered by what City Manager Glen Rojas believed was a necessary restructuring of the commanders' pay scale.
As some residents have pointed out, the increase will bring a commander's top pay level to $174,000 a year, and could cost the city thousands of dollars in pension costs over the next 30 years.
The city appears far too willing to lather on salary and benefit increases that, when coupled with the rule that allows an officer to retire at 50 with 30 years' service and earn 90 percent of his or her highest pay for life, cost the city hundreds of thousands of dollars over time.
This is a Cadillac pension benefit that has long been gone from private industry and is unsustainable in the years ahead, even for small cities like Menlo Park that have healthy reserves. Today's rotten investment climate hit the state retirement system hard, which means that Menlo Park and most other cities that depend on CalPERS to fund retirements are forced to make up the difference when state payments fall short. In other words, decisions on pay and benefit increases today drive the costs of a city's ongoing commitment to its employees for years to come.
It's critically important for the City Council and the administration to look beyond current budget costs, and understand that until the runaway growth of employee compensation is halted, the city will be more and more hard-pressed to live within its means.
While Menlo Park's hefty reserves appear to insulate the city from a financial crisis, look at San Jose, the Bay Area's largest city, which just last week laid off 106 police officers due to skyrocketing pension costs. Other Peninsula communities are consolidating police services, or farming them out to the Sheriff's Office. Public safety employees aren't the only ones losing jobs; Atherton just announced a plan to lay off its building and public works staffs and replace them with contractors.
While it may have made administrative sense to increase the pay for police commanders, it was also in line with the long-standing tradition of local government to rarely push back on employee contracts. But the tradition can't be sustained. The sooner City Council members understand that, the better.