City Hall Pay Hikes Top in County

Anthony "Tony" Bravo Sr. February 5, 1923 - January 30, 2016

Salary and benefit hikes for Gilroy city employees were the highest among Santa Clara County municipalities in the first half of the decade, while earnings for regular workers were stagnant, according to data published online by the nonprofit watchdog group Transparent California.
But the numbers might not tell the whole story of how Gilroy pays compared to the county’s other 14 municipalities—or what’s happening and why in the city’s flat private job market.
From 2011 through 2015, the average total compensation package for full time, year-round city employees rose nearly 31 percent, to $158,471, the data shows.
The next highest increases were in San Jose and Palo Alto. Each was up 29 percent, with average compensations in 2015 of about $167,000 and $153,000, respectively, per city worker.
Gilroy’s increase was more than twice that of city workers statewide, but the figure might be skewed by salary cuts during the recession, a city official suggested.
In 2011, the average pay and benefits for a full-time employee in a California city was $112,103, according to Robert Fellner, Research Director at Transparent California.
By 2015, the average was $128,576, up roughly 15 percent, he said Tuesday in an email.
For Gilroy, those same figures were $121,152 and $158,471, respectively, up 30.8 percent.
The numbers were gleaned by the nonprofit from city-supplied records and are posted yearly with those of all California cities, counties, school, water and other districts on its website,
The group defines a compensation package as total wages plus the cost of retirement and health benefits.
Hikes in compensation can reflect many issues and some can skew the numbers when comparisons are made, said former Gilroy City Administrator Jay Baksa. He spent four decades in city governments before retiring after 25 years at Gilroy’s helm.
The basics used to figure compensation are average salaries in other cities and private sector pay, he said.
Typically, public jobs pay better for some jobs and not as good for others, such as top management, Baksa said.
Ten years ago he pushed for higher than average city wages in Gilroy to attract great employees.
“We were experiencing some really wonderful hires and we wanted to continue that by going a little bit higher than the average, but that was rejected by the council,” he recalled.
His fall-back position was to stick to comparisons with other cities.
“If your starting position in relation to other cities is way low, maybe you…increase your compensation,” he said, to achieve parity and enhance recruitment.
Gilroy’s five-year figures might be skewed by pay cuts, Human Resources Director LeeAnn McPhillips said Tuesday.
“One factor that you may be picking up in the data for this time period is that we did some significant pay reductions … during the great recession 2009-2011,” she said in an email.
“After the agreed upon reduction period, employees returned to their former pay rate. It sounds like this is skewing the data if your baseline is the 2011 compensation report,” she said.
That observation did not convince Fellner, whose group routinely reports on record-breaking public salaries and compensation packages and bloated pensions.
“Wouldn’t all cities/workers be affected by the recession, not just Gilroy?” he asked.
“They always have some reason or excuse to cite, they’re never going to respond and say: ‘We get tax dollars and thus can afford to pay higher salaries than private employers who have to show a profit,’” Fellner said in an email.
Using 2012 instead of 2011 as the baseline, he said, Gilroy’s average total compensation jumped by 22 percent by 2015. For the same period, it was down 7 percent in Morgan Hill and Hollister and up 5 percent in Watsonville, according to Fellner.
In the meantime, citing US Census data, his group also compares public employee salaries to private sector pay in each city. The numbers are not good for Gilroy.
They show that while every other city in the county had increases in private sector earnings over the five-year period, Gilroy was stagnant at about $48,000 per year.
Statewide, average private job earnings went from $54,345 to $61,281, up nearly 13 percent, according to Fellner.
By comparison, Morgan Hill’s average went from $69,000 to $73,000, up 5.4 percent.
Los Altos Hills was the only city in the county where increases in public and private compensation were the same, 23 percent.
In Cupertino, closest to Gilroy in population, average private sector earnings rose by nearly 14 percent, from $118,000 to $128,000.
Is something amiss in Gilroy?
Baksa sighted an “exploding” job market in North County where high tech giants such as Apple have to offer top pay to compete for the best employees.
By contrast, most Gilroy jobs are in retail sales, where wages are low and tend not to increase, he said.
For public job compensation purposes, Gilroy is compared to cities with similar populations, budgets, etc., and most are not in Santa Clara County, according to Baksa.
Employee groupings and job commonalities, such as police and engineering work, also factor into comparisons, he said.
Gilroy’s top earning bundles go to upper management and public safety, the police and fire departments.
Public safety also tallies the highest overtime costs. In the Gilroy Police Department alone, the 2015 overtime bill exceeded an estimated $800,000, according to McPhillips.
Taxpayers don’t pay it all. The Gilroy Garlic Festival Association and others who hire GPD officers for security and traffic control reimburse some of it.
Fifteen officers earned more than $20,000 each in overtime in 2015. Many others earned close to that figure, according to Transparent California.
The most overtime paid in 2015 was $38,142 earned by Police Sergeant Royce Heath. Combined with his regular pay, $114,083, other extra pay of $22,727 and benefits, his total compensation that year was $243,767. That was up 27 percent over his 2011 total of $191,853.
By comparison, former Police Chief Denise Turner’s total compensation in 2015 was $260,572, second highest after then city administrator Tom Haglund.
As apparently is the case with most police officers who earn significant extra pay, regular pay hikes can be small by comparison. In Heath’s case, for example, regular base pay rose by about 12 percent over the five years. His overtime, other pay and benefits rose by 68 percent, 42.5 percent and nearly 33 percent, respectively, from 2011 to 2015.
The city administrator’s job, the top spot in the administration, also had big hikes during the period, when Haglund held the position.
His annual compensation rose from about $255,000 to nearly $332,000, up more than 30 percent.
His successor, City Administrator Gabe Gonzalez, is expected to earn total compensation this year of $274,473, according to McPhillips.
That’s $17,500 a month in salary, a $350 monthly car allowance and $60,273 yearly in benefits, she said in an email.
At least five subordinates saw bigger increases than Haglund.
They were McPhillips, whose 30.7 increase brought her to a 2015 total of $238,071; former Public Works Director Rick Smelser, whose total was $238,629 after a 32.8 percent hike; and Community Development Director Kristi Adams. Her 36.8 percent increase brought her total to $229,385.
The biggest hikes went to Finance Director Christina Turner, 39 percent, and Recreation Director Maria Del Deleon, 39.9 percent.
Their total compensation in 2015 was $246,417 and $171,188, respectively.

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