Berkeley is in a fiscal crisis. The current budget was balanced only after the council made deep cuts in staff and services. The city has $160 million of unfunded liabilities. Meanwhile, our roads, sewers and drainage system (where there is a drainage system) are in bad shape; it looks as if the coming winter is going to be a wet one—good for the snowpack, bad for deteriorating infrastructure. This past spring, the council nickel and dimed basic services for the homeless, cutting $23,000 out of the respected Quarter Meal program run by Berkeley’s Food and Housing Project—50 percent of the program’s modest budget.
The city’s 2008-2009 Budget Book opens with a May 8, 2007 cover letter from the city manager to the mayor and council. In a section entitled “Controlling Costs,” Mr. Kamlarz writes: “In the short term, the only method to effectively eliminate the City’s structural deficit is through cost reductions—primarily through controlling labor costs, since employee salary and benefits make up 77 percent of the City’s operating budget.”
Accordingly, for fiscal years 2008 and 2009, the book anticipated zero cost of living increases for the fire and police departments. For the city’s civilian employees, it designated a 5 percent cost of living increase in fiscal year 2008 and no increase at all for 2009.
Yet now, merely four months since he wrote those words, Mr. Kamlarz—no doubt under great pressure—is asking the council to give Berkeley firefighters raises that, if approved, will likely be used to justify commensurate increases in the compensation offered to other city employees. Specifically, he is recommending that the firefighters get a salary raise of at least 13 percent for the period between July 2, 2006 (the contract is retroactive) and June 29, 2010.
A 13 percent raise, spread over four years, may sound reasonable, until you remember that the city’s last contract with the Berkeley Fire Fighters Association, running from 2000 to 2006, raised firefighter salaries by 31.5 percent. If the council approves the manager’s recommendation, by 2010 Berkeley firefighter salaries will have risen 44.5% in a decade. When the manager’s recommended increases in benefits (medical, retirement) are factored in, the overall increase will be even larger. According to the current Budget Book, the fire department accounts for 16 percent of total General Fund expenditures of $282,481,673, second among city bureaus only to the police department at 34 percent.
The firefighters’ contract originally appeared on the council’s Oct. 9 agenda but was pulled by the city manager and re-scheduled for the Oct. 23 meeting. The Oct. 9 staff report said that contract negotiations were guided by policies that included “assuring that the City’s salaries and benefit package are competitive with other Fire Fighters in the Bay Area.” In addition, “the settlement must also be within the City’s ability to pay based on projected revenue, as well as demands for services across the spectrum of programs the City provides to the community.”
Those are certainly the right criteria. The city needs to pay its employees enough to ensure that it attracts quality personnel; it also needs to live within its means. Trouble is, there wasn’t a shred of corresponding data or analysis in the staff report to support the recommended increases. More trouble: The city manager’s annual report, sent out in late August, after negotiations with the firefighters union had been completed, said: “We will need a new tax to maintain and increase public safety services.” Yet the Oct. 9 staff report was silent about a new public safety tax. Even more remarkably, the item appeared on the council’s consent agenda, meaning that staff hoped to get it approved without any discussion.
The numbers are huge. If the council okays the manager’s recommendations, “the City,” says the staff report, “will pay approximately $52.6 million for staffing and benefit costs over the four-year term of the contract.” And the firefighters’ new contract will set a precedent for the other union contracts with the city whose renewals are coming right up.
After reading the Oct. 9 staff report, I sent Councilmember Spring a list of information that the council and the public need to evaluate the recommended increases in firefighter salaries and benefits. She forwarded that list to the city manager, asking that he provide the following data:
• Compensation packages (salaries and benefits) of firefighters in other Bay Area cities
• Percentage increases in Berkeley firefighters’ salaries, benefits, and total compensation packages from 2000 to 2006, and from 2006 to 2010 (proposed)
• Number and percentage of Berkeley firefighters with a current base salary of $100,000 or more
• Number and percentage of Berkeley firefighters whose base salary will be $100,000 or more if Item 12 is approved as proposed
• Estimated size of the new public safety tax needed to accommodate proposed increases in firefighter compensation
• Compensation to firefighters that city can afford without a new public safety tax
Looking over this list, I realize that I left out some vital data: Berkeley firefighters’ average salaries and benefits at present and as proposed for 2006-2010. According to information provided to me last summer by Human Resources Director Dave Hodgkins, Berkeley firefighters’ average salary as of July 1, 2007 was $8,453, which works out to $98,292 a year. Fringe benefits, mainly medical and retirement costs, calculated at 46.83 percent of salaries, averaged $3,958 a month or $47,496 a year. What are the corresponding figures in the proposed new contract?
The contract with BFFA appears as Item 12 on the draft agenda for the council’s Oct. 23 meeting. Let’s hope that when the final agenda is posted on the city’s website this Friday afternoon, an updated staff report includes the above-requested numbers.
Let’s hope, too, that someone on the council has the wherewithal to pull the item from the consent calendar—yes, it’s on consent again—so that the issue of staff pay might get the in-depth consideration that it deserves. As the city manager explained in the Budget Book, the most effective, short-term way the city can close its gaping structural deficit is to control labor costs. Unless Berkeley firefighters are getting far less than their colleagues in comparable local jurisdictions, it’s hard to see how increases in their salary and benefits and/or a new tax can be justified. And even if there is some disparity, long-term fiscal prudence ought to be the ultimate standard. Otherwise, Berkeley will be caught in a fiscal arms race that spirals ever upward. The same considerations should apply to the packages offered to other city employees.
That said, for the council to hold the line on employee compensation will take both political courage and conscientious oversight of city expenditures—two commodities that are in dismayingly short supply on the dais in Old City Hall. The most recent biennnial budget process was a disgraceful farce, as the council majority allowed itself to be led by its collective nose by the city manager and the mayor. Community input was negligible, in large part because in April 2005 the council abruptly eliminated the Citizens Budget Review Commission.
But to gauge fully the council’s fiscal heedlessness, you have to consider not only the formal budget process and the union contracts, but also the numerous giveaways to big developers. Space permits mention of only the most egregious of these handouts: the 15-year, $12 million annual subsidy to the biggest developer in town, the University of California, for campus use of city services (fire, police and sewers), secretly brokered by Mayor Bates and then secretly approved by a 6-3 vote (Spring, Olds and Worthington voted no) in May 2005.
For the sake of the city’s fiscal recovery, either the council needs to change its attitude, or Berkeley voters need to change the council. The disposition of the firefighters’ contract will do more to determine the city’s fiscal future than any other action the council will take this year. Mark it well, and then bear in mind that in November 2008, Mayor Bates and four councilmembers—Anderson, Capi-telli, Moore and Olds—will be up for re-election.