Sometimes “beautification” goes awry. Years ago, the city of Santa Rosa decided to visually and texturally enhance 11 downtown intersections by replacing part of the asphalt at each with interlocking, decorative paving bricks. The intersections include four on Third Street, four on Fourth Street and three on Fifth Street.
The bricks run from corner to corner in a slightly rounded path on which pedestrians walk. I think the idea was to invoke the image of a cobblestone, historic downtown district. The bricks were lighter in color than asphalt and thus also provided some visual relief at each intersection.
I got to observe the bricks from the moment of their installation. In my opinion, their visual beauty began to fade as soon as traffic drove over them. In just a few months, they darkened and began a quick descent to an unattractive parody of their purpose.
But wait, it gets worse. Most of the intersections now have sections of the brick that have been patched—with asphalt. The worst example is the biggest intersection of Third Street at Santa Rosa Avenue in Old Courthouse Square. Literally hundreds of bricks are missing in 17 separate places where repairs were made in asphalt. This is what visitors to Santa Rosa see after they take the Downtown exit off Highway 101 and then take Third Street to the middle of town. Does this represent our civic pride?
Many questions arise. Are the bricks no longer available? Is it too disruptive to traffic to repair the affected brick sections by hand? Is the city waiting for a possible Courthouse Square unification to repair the intersections?
Or is there just no money to make this infrastructure repair properly? If that’s the case, read on.
State of the union(s), addressed
The finance department of the city of Santa Rosa published a report in September 2010, which painted a grim picture of city finances. General fund revenue decreased $17 million since June 2008. Sales tax revenue decreased 24 percent. Assessed property values declined for two consecutive years, the first time that’s happened since the Great Depression. New dwelling building permits were at the lowest level since 1954, declining from a 10-year average of 820 units per year to just 94 units in 2009. The city eliminated 174 employee positions, including some police and fire jobs, leaving 706 general fund positions. The maintenance staff of the recreation and parks department was slashed from 47 to 10. Streetlights were doused.
What about the expense side of the ledger? Most of the city’s general fund budget is expended on employee salaries and benefits. Police and firefighters make up about 60 percent of the general fund budget. The city’s human resource website lists 265 job descriptions with minimum and theoretical maximum pay for each position. It may be helpful to know that 207 out of the 265 jobs have minimum pay of at least $50,000 per year. Of these, 130 have minimum pay of at least $70,000 per year. And 118 out of 265 jobs have maximum pay of $100,000 or more per year.
In addition to good pay, city employees have good benefits, including the most valuable one—a pension plan providing lifetime monthly benefits. But the city’s mandatory pension contributions (to CalPERS) have soared, from a few million dollars 10 years ago to $17 million in 2010, $20 million in 2011 and an estimated $24 million in 2015. Thus, despite passage of a recent sales tax increase, the city is predicting a budget deficit of $2.8 million in the 2011 to 2012 fiscal year.
Much of the required funding is attributable to police and fire pensions. Here are some key points about those pensions. First, to be eligible for service retirement, a police officer or firefighter needs to be 50 years old with only five years of CalPERS-credited service.
In the 1990s, voters approved a measure giving police and firefighters mandatory comparable pay and benefits (with a group of comparison cities) and binding arbitration. The effect was to eliminate the city’s bargaining power. As a result, police and firefighter pay has soared in the last 10 years.
One of the “comparable” benefits was a super-enhancement to pensions, allowing police and firefighters to retire at age 50 with up to 90 percent pay for life. “Pay” for pension purposes is based on one’s “highest paid 12 consecutive months of employment.” This encourages potential retirees to find a way to spike their pay for pension purposes just prior to retirement.
For police and firefighters, the city not only pays the CalPERS-mandated “employer” contribution, but also the 9 percent-of-pay “employee” contribution. This was negotiated years ago in lieu of pay increases. Thus, police and firefighters don’t contribute toward their pensions. Further, the 9 percent paid by the city is added to base pay for pension purposes. Thus, “pay” for pension purposes can be higher than the theoretical maximums stated on the human resource website.
There are many other special pay types that can add to base pay for pension purposes. These pay types include: accident investigation, bilingual, canine, shift differential, special response team, uniform value, longevity, acting, crisis negotiation, environmental crimes, field training, lead operator, paramedic, paramedic trainer, premium, skill-based, team leader, hazardous materials, holiday overtime, holiday half-time, holiday payoff and hazardous device unit.
After retirement, there are possible cost-of-living adjustments that may raise pension amounts.
The city predicts that by 2015, mandatory pension contributions for firefighters and police will soar to 47 percent and 52 percent of pay, respectively. These percentages may be even higher if CalPERS lowers the assumed rate of earnings on pension investments, as is being contemplated right now.
To be continued
In early 2011, the city council of Santa Rosa formed a committee to study employee pension issues. The purpose of the committee is to make recommendations, not to negotiate with unionized city employees with respect to pay or benefits. Some of the discussion may turn on actuarial predictions, in which case it’s important to remember the old joke: You ask an actuary what two plus two is, and the actuary replies, “What do you want it to be?”
