After approving pay cuts for police and firefighters, the city
council cut its own collective salary by 10 percent.
After approving pay cuts for police and firefighters, the city council cut its own collective salary by 10 percent.
While comparable percentage-wise to union cuts, the savings only amount to $8,011 a year. That was one reason Councilman Craig Gartman – who had a separate plan – and Bob Dillon dissented in the 5-2 vote. Councilman Perry Woodward also had a plan for council members to reimburse the city for their health benefits, which total $64,000 a year. The council did not vote on either Woodward and Gartman’s separate proposals.
During the debate, council members acknowledged that the $8,000 cut amounted to more of a symbolic gesture than a significant impact, as the savings will hardly lower this year’s $1.6 million deficit. That deficit was $4.7 million last month before the city’s four unions and non-represented employees agreed in separate contracts to forfeit the difference in furlough days and raise postponements. Those sacrifices have created acrimony between the council and union representatives who have chastised the council for not making commensurate cuts even though the part-time body makes a tiny fraction of what union employees earn each year.
“What we’re talking about here is payback time. Our union members are angry, and who can really blame them?” Councilman Bob Dillon said, adding that the council did not touch employees’ benefits, just their salaries and other forms of compensation. “I’m not even sure about the 10 percent considering the time I spent reading the council packet this weekend,” he added, pointing to the double-sided, half-inch thick packet before him on the dais.
Councilman Peter Arellano, who works as a physician at Kaiser Permanente, said he preferred the 10 percent reduction because council members are entitled to health benefits even though they are part-time employees. He also argued his colleagues personal health costs and particular family situations should not be put under a public microscope.
“I don’t need my benefits. You can keep them, but I don’t ask what you need and what your families are doing,” said Arellano, one of three council members who take a cash in-lieu payment from the city every month rather than accepting health benefits they are entitled to receive.
Resident and regular council meeting attendee Ron Kirkish agreed and stood up Monday night to say the unions’ “bitterness” should not lead to cuts in council benefits.
“You guys deserve what you get,” Kirkish said. “It’s minuscule compared to what they get.”
But active resident Mary Yates, a former school teacher, said “I think you need to make some sort of reduction to show some sort of leadership.” She went on to say a public servant “does not make money off the public” and “shouldn’t be public servant for the benefits,” for which is one of the reasons Councilman Dillon said was one of the perks of serving on the council.
In 1997, the council passed a resolution giving health benefits to the council as a group, similar to its collective enrollment in CalPERS – the state’s public pension fund for part-time employees. Gilroy requires and pays for every council member’s dental and CalPERS retirement contributions, which 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.
Councilman Craig Gartman and Mayor Pinheiro were also keen to point out that the council declined raises in 2004, 2005 and 2008 while the city’s other employees all took home raises between 2.5 and 5 percent each of those years.
When it comes to health benefits, Councilman Woodward first broached the idea last month when he asked his colleagues to repay the city for the economic health benefits they collect, only to hear a total lack of support from fellow council members. Afterward, Councilman Craig Gartman, who did not second Woodward’s original motion, introduced a similar idea. It involved council members still receiving health and retirement benefits through the city but footing the bill for those perks through higher salaries. His proposal included a 60 percent raise for the mayor and a 106 percent raise for council members.
Under Gartman’s plan, 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.
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.
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. About $56,000 a year pays for council members’ phones, mileage reimbursements, a few 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 has 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.
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 (INCLUDING MAYOR)
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%
