As city employees cope with 9 percent wage cuts and an uncertain
future, two city council members are jockeying to show they also
know how to sacrifice.
As city employees cope with 9 percent wage cuts and an uncertain future, two city council members are jockeying to show they also know how to sacrifice.
Councilman Perry Woodward asked his colleagues to pay for their own health benefits, which total $64,000 a year, only to have a total lack of support earlier this month. Since then, Councilman Craig Gartman, who did not second Woodward’s original motion, has broached a similar idea.
Gartman’s plan involves council members still receiving economic health and retirement benefits through the city but footing the bill for those perks. In return, council members would receive higher salaries that represent a 60-percent raise for the mayor and a 106-percent raise for part-time council members – who now earn $729 a month. The city’s total compensation for council members would drop from $144,643 to $129,000, according to city figures and Gartman’s projections.
That represents a 12-percent reduction in annual compensation – compared to the city’s non-emergency and managerial employees who have agreed to a 9 percent cut – but it still allows council members to take advantage of the city’s economic benefits rather than pursue pricey private coverage, Gartman said.
“It’s always less expensive to participate in the group plan, and while it would definitely cost me more money, I think we should foot our own plans that the city now pays for,” Gartman said. “In the long run, this will save the city money.”
The council will consider the new suggestion July 6, when the body will also vote on contract concessions with the police and fire unions. At that time, Woodward said he will likely push for greater cost savings.
“The overall cost needs to come down by at least 15 percent in order for us to demonstrate the leadership we need to demonstrate,” Woodward said.
Gartman also mimicked Woodward’s lead two weeks ago when he returned his city-paid cell phone a month after Woodward did, according to City Clerk Shawna Freels. The symbolic gesture joined Gartman and Woodward with Mayor Al Pinheiro, who has declined a city phone since his first election 10 years ago.
Despite the apparent penny-pinching, Councilman Dion Bracco – who collects the most in council health benefits along with the mayor – chalked his colleague’s financial forfeitures up to self-serving “whims” and tricky politics that distract the council from solving the city’s real financial troubles, he said.
“To me, this is all political. You have an individual who’s against benefits but has been taking them for years, and now all of a sudden it’s a big deal? A lot of our problems are because of this bull we’re constantly having to deal with instead of real city business.” said Bracco, who owns Bracco’s Towing and takes home $552 a month for his work on the council after taxes and deductions for benefits. “If you take away our pay and our measly benefits, don’t be surprised if all you get in the future is rich, conservative white guys who can afford to run for council.”
While Bracco’s company offers its employees health benefits, they pale compared to the city’s, he said. Still, cushy perks did not motivate him to run in 2005 or 2007, when voters first elected him, and he said he feared hiking council pay to reduce city contributions would ultimately backfire.
“It’s kind of scary. This is what lawmakers in Sacramento do. They add pay and then move the benefits aside and then a year form now they’ll restore those benefits,” said Bracco, adding that he never submits gas or lodging receipts to City Clerk Shawna Freels for reimbursement, unlike other council members.
The city pays about $56,000 a year on council members’ phones, mileage, meals, rare hotel stays, and dues and fees to organizations the city belongs to, such as the Santa Clara County Cities Association – the board of which the mayor sits on. However, Freels said she hardly receives reimbursement requests aside from the few times a year the mayor and other council members venture up to San Jose or elsewhere in Santa Clara County to serve on various boards and commissions.
After Woodward’s motion failed, he approached Council member Cat Tucker to come up with a second idea, though Tucker said at the time she was still on the fence because families rely on medical insurance. Woodward’s second idea that Gartman has tweaked would have council members reimburse the city for their benefits but not change their pay.
If Woodward can’t convince his skeptical colleagues, he said he would consider gathering enough residents’ signatures to place the matter on an upcoming ballot. That would cost the city between $46,000 and $72,000, according to the Santa Clara County Registrar of Voters.
Union officials like Tina Acree – the American Federation of State, County and Municipal Employees Local 101 business agent who represents most of City Hall – and the Police Officers’ Association President Mitch Madruga have chastised the council for not making cuts commensurate with the unions’, even though the part-time body makes a tiny fraction of what union employees take home each year.
A survey of 64 public agencies throughout the state ranging from the city of Morgan Hill to the Orange County Transportation Authority showed only 22 percent cover the benefits costs for elected officials and dependents. However, only 9 percent of those agencies deny elected officials coverage outright, according to the 2008 survey staff received from the California Society of Municipal Finance Officers.
The average American employee paid $58 a month for health insurance in 2007, and employers paid an average difference of $3,785, according to the Kaiser Family Foundation. The average individual annual premiums during that same time was $218 a month for generally fewer benefits, according to America’s Health Insurance Plans.
Along with Council members Tucker and Peter Arellano – a physician at Kaiser Permanente – Woodward secures his own insurance elsewhere, but he would not be specific about where or through whom he does so. All three council members opt for Gilroy’s “cash in lieu” option that adds about $200 to their monthly incomes. The mayor’s salary equals $1,094 a month, but adding benefits lifts his monthly income to more than $2,400 – more than twice what most of his colleagues earn. The city spends $216,000 on the council annually, $64,000 of which pays for health insurance and $13,500 of which finances small retirement plans, according to city figures.
Gilroy requires and pays for every council member’s dental and CalPERS retirement contributions that allow council members to retire with 2.5 percent of their highest monthly salary once they turn 55. For a two-term, eight-year council member, that means 20 percent of their monthly salary of $729, or a $146 pension payment each month after they turn 55.
CITY COUNCIL’S MONTHLY MEDICAL BENEFITS
$397 – Council members Cat Tucker, Perry Woodward and Peter Arellano, who decline city health benefits and receive about $200 a month instead. The additional cost of about $200, depending on individual plans, comes from the city paying council members’ dental and retirement contributions, which they cannot decline in their contracts.
$498 – Councilman Bob Dillon (excludes $59 co-pay)
$985 – Councilman Craig Gartman and one dependent (excludes $66 co-pay)
$1,315 – Mayor Al Pinheiro and family (excludes $87 co-pay)
$1,315 – Councilman Dion Bracco and family (excludes $151 co-pay that exceeds Pinheiro’s because Bracco has a different, undisclosed plan.)
Source: City of Gilroy Human Resources Department
AVERAGE EXPENSES ON INDIVIDUAL COUNCIL MEMBERS
GILROY
Monthly salary: $781
Annual health benefits: $9,142
Annual retirement contributions: $1,129
MORGAN HILL
Monthly salary: $417
Annual health benefits: $7,540
Annual retirement contributions: $0*
*There is no City Contribution, only Council Contribution
COUNCIL EXPENSES FOR FY2009-10
Salaries – $65,616 per year ($1,094 / month for mayor, $729 / month for council members)
Health Care Cost – $65,485 per year
Retirement Cost – $13,542 per year
TOTAL Cost – $144,643 per year
Gartman proposed annual salaries – $129,000 ($1,750 / month for mayor, $1,500 / month for council members)
Savings – $15,643, or 12% compared to union wage cuts of 9%
Additional savings – Gartman proposed forfeiting raises for FY09-10 and FY10-11. Average yearly raise since 2000 has been 3.1%
