Government union employees should enjoy the remaining time in their fantasyland of high salaries, tremendous health benefits and glorious pensions. It will all end because the promises are un-payable. It’s simple math. The taxpayers will not pay. The localities will declare bankruptcy because they have no choice. The money isn’t there. All the promises will not be fulfilled. So Solly.
When contemplating the many reasons cities in California and elsewhere are venturing closer to bankruptcy, look no further than the relatively lucrative and often-unjustifiable salaries bestowed on municipal employees – and the lofty pension benefits attached to the high pay.
One of the latest examples comes from the California coastal city of Hermosa Beach, where some community service staffers who collect money from parking meters and manage their operations – positions once widely known as “meter maids” – are making nearly $100,000 a year in total compensation, according to city documents.
There are 10 parking enforcement employees for the 1.3-square-mile beach city southwest of downtown Los Angeles, and they pull down some disproportionate compensation, considering their job functions. In fact, the two highest-earning employees for fiscal year 2011-12 are estimated to have made more than $92,000 and $93,000, respectively, according to city documents provided by Patrick “Kit” Bobko, one of five council members and who also serves as mayor pro tem. Those two have supervisory roles. The other eight parking-enforcement employees make from $67,367 to $84,267 in total compensation.
There are four qualifications for being a city “community service officer,” Bobko told me: “You have to be able to drive a standard transmission; you have to able to handle large animals; you have to read and interpret statutes and regulations; and you have a high school diploma or equivalent.”
According to the city’s job description, these community service officers are supposed “to enforce meter and other regulations governing the parking of vehicles on streets and municipal parking lots; to enforce animal regulations; may drive city buses; collect meters and perform minor meter repairs; perform related work as required.”
The section of the job description that gives examples of job duties reads as follows: “Patrols streets and municipal parking lots and checks vehicles for parking violations; issues citations for parking violations; impound vehicles in certain cases; collects and transports stray dogs to designated holding facilities; investigates complaints for animal control violations; may drive city buses; meter collection and minor meter repair.”
Bobko also wrote in a memo that the retirement costs for these 10 employees “from [fiscal year 2011-12] through their retirement age at 62 was nearly $1.6 million, and the medical costs for these employees from this fiscal year to their retirement at age 62 would be $1,353,827.” Excluding salaries, the [retirement] contributions and medical costs for the 10 employees performing parking enforcement will cost, on average, nearly $300,000 apiece.”
Aside from the personnel costs, there has been criticism from Hermosa Beach Treasurer David Cohn that parking meter operations have been mismanaged. Cohn cited nonfunctioning parking meters, a backlog in disputed parking tickets and problems with the accounting for revenue.
Bobko told me that his concern is that, when taxpayers learn that city employees “are making high wages for low-skilled jobs, they are not OK with it.” That’s especially true when considering these jobs easily could be at least partially automated or even outsourced, for less money.
Bobko is pushing a plan to outsource the city’s parking enforcement operations, which he says will save money, reduce maintenance costs, relieve the city of accounting functions related to parking enforcement, increase efficiency and, perhaps most importantly, increase revenue and “reduce the city’s pension and salary obligations.”
There has been opposition to the outsourcing proposal from Hermosa Beach’s Police Chief Steve Johnson and Councilman Howard Fishman. Both expressed concerns about letting go full-time city staff. Bobko accurately characterized the resistance: “When you outsource, you take away union jobs.”
In this case, outsourcing parking-enforcement duties would benefit the taxpayers among Hermosa Beach’s population of slightly less than 20,000. For an example of how such a switch might work, Hermosa officials could travel about 45 miles south along the coast to Newport Beach, where the city successfully moved to outsource parking enforcement last year.
“We have seen increased revenues with the private company operating the meter program,” Newport Councilwoman Leslie Daigle said.
Since Newport made the move, the city “has seen a 24.4 percent increase in parking-meter revenues over last year and salary savings of approximately $500,000 from outsourcing parking meter operations,” according to Tara Finnigan, a spokeswoman for the city.
Privatizing parking meter duties also is a national trend, as detailed in a recent study by the libertarian Reason Foundation. Chicago and Indianapolis have had success with outsourcing parking enforcement, and other cities including New York, Pittsburgh, Sacramento, Memphis, Tenn., and Harrisburg, Pa., are considering privatization proposals.
Indianapolis City Councilman Ben Hunter told me, “The privatization of the parking meter system in Indianapolis allowed for an immediate upgrade of a poor system.”
Back in Hermosa Beach, “We can’t keep making promises with money we don’t have to people we are paying well above what the market would pay them,” Bobko said.
Public employee compensation and retirement costs are proving unsustainable. More cities in the Golden State and elsewhere need to accept that reality and act on it to avoid fiscal calamity, perhaps starting with the meter maids.