Public Comment

Berkeley City Budget 101

By Victoria Peirotes
Thursday June 25, 2009 - 06:36:00 PM

Steven Falk, the city manager of Lafayette, said in a recent San Francisco Chronicle article, “The state is broke, counties are broke and cities are broke.” He went on to say “Public pensions are unsustainable in the current form.” 

The Chronicle also reported, “The California Citizens Compensation Commission, which sets salaries of state lawmakers and statewide elected officials, voted to slash state officials and employee pay by 18 percent, effective in 2010.” 

Other national news media report that a reason for GM’s bankruptcy and the State of California’s dire circumstances are in part due “to out of control salaries and long-term retirement and health benefits accrued by employees.”  

If you scrutinize the proposed biennial Berkeley Budget (2010–2012), you may notice that it doesn’t address or even acknowledge the very big “elephant-in-the-room.” That “elephant” is the disproportionate number of city employees in Berkeley, their most generous salaries, and the extraordinary health benefits they enjoy, including gold-plated retirement benefits.  

We are a small city of about 100,000 people with more than 1,600 city employees. This means there is roughly one city employee for every 62 residents. Compared to other communities of our size, this ratio is exorbitant. Even more dispiriting is the fact that more than 25 percent of our city employees draw a salary package of over $100,000 with an additional city debt for benefits of over $35,000 each. Most Berkeley property owners and taxpayers who finance these employees do not have equivalent incomes.  

Perhaps most egregious are the retirement benefits Berkeley employees enjoy. These exceed anything to be found elsewhere. This April, while President Obama “froze” all White House staff salaries over $100,000, the Berkeley City Council considered a proposed 8 percent raise for our city manager, a raise which was accorded him. Mayor Bates disingenuously argued for granting this raise “because Phil, like me, could otherwise simply retire and make nearly as much as he is making now.” This is sadly true. In retirement our city manager will enjoy an annual compensation of about $270,000 plus an annual inflator increase each and every year for the rest of his life. This is also how retirement works for all Berkeley city employees.  

In a time of national, state and local funding crisis, our city government has crafted a budget that maintains and increases the costs of the Berkeley bureaucracy while imposing significant cuts in services to the public and increased fees for the services which are continued. Last month the City Council unanimously authorized increased fees for fire inspections and permits, for inspection services by the Environmental Health Division, for parks and recreation programs and facilities, and for street light assessments. This month the City Council is increasing parking fines. Trash collection fees for residents and commercial entities are being raised by council by an average of 22 percent with no effective recourse for the electorate to contest.  

Meanwhile the City of Berkeley is gutting many social service programs, including a senior water aerobics class that has served 40 local seniors a day for over 10 years. The irony here is that the city continues to subsidize the Berkeley YMCA to the tune of $300,000 a year. What is the “payback” to citizens? Nothing for senior taxpayers but all city employees enjoy the added “benefit” of YMCA membership for free. What is wrong here? 

Perhaps some cuts in services and increased fees might be necessary. But before slashing services willy-nilly and before levying more fees and costs directly on taxpayers, and in particular, property owners, is it not incumbent on our city government to seek alternatives? 

This brings us back to that “elephant-in-the-room,” i.e., city employees and their benefits which are far-and-away the biggest “budget buster” out there. 

The City of Berkeley’s annual budget is about $320 million. Before service cuts and fee increases opted for by council, we were about $5 million “underwater” for next year and $10+ million for the following two. 

Now consider this: The 1,600+ city employees cost the City of Berkeley about $215 million annually, or over 67 percent of our entire city budget of $320 million. If our mayor and council responsibly directed city management to develop a plan to reduce these personnel costs by a modest 12 percent (much less than what the State of California is proposing), then our city would realize economies of about $25 million a year. No services need to be cut and no increase in fees for our already strapped electorate would be necessary. In fact, there would be a $21 million budget surplus for 2010. Ah, if only our mayor, council and city manager would be good stewards of our trust! 

So can you imagine what we, the City of Berkeley, might do if flush with $21 million? With none of the council-imposed increased taxes and fees, perhaps the warm pool bond would have a chance of passing next year and perhaps the brilliant $10 million Walter Hood plan for reinvigorating downtown Berkeley could be realized. Perhaps other infrastructure improvements could materialize, or some of the reasonable Climate Action Plan (CAP) objectives might be implemented, or perhaps all of the above … well, dream-a-little dream of what Berkeley might do with a little cash in its wallet. Yes, make a wish-upon-a-star and then ask our elected representatives to make it come true. 


Victoria Peirotes is a Berkeley resident..