City study suggests SLO employees are underpaid

August 19, 2014

By JOSH FRIEDMAN

The chief building official for the city of San Luis Obispo receives a base salary of more than $100,000 a year. But, according to a recently published city study, it is well below the industry standard.

On Tuesday, the San Luis Obispo City Council will discuss the compensation report, a study that compares San Luis Obispo worker pay to that of public employees of other California cities. If the compensation study is any indication of the direction city salaries are headed, then employees are in line for pay raises.

The compensation report, which staff compiled under the guidance of a paid consultant, concludes that 50 percent of city employees receive pay below industry standard.

The study singled out several city jobs as positions that are compensated well below the median. For instance, San Luis Obispo’s chief building official earns a base salary of $107,250 a year. The median salary for the position among comparable cities is more than $125,000, according to the report.

In addition, San Luis Obispo currently pays its deputy public works director a base salary of about $122,000. The report indicates that the median pay for the position is approximately $143,000.

Critics of the study suggest that city staff inflated the median salaries in the report by selected cities that compensate generously to use as comparisons.

For example, the Santa Monica city manager receives a base salary of more than $350,000 a year. Neighboring Culver City, which did not appear in the study, pays its city manager a maximum salary of a little more than $250,000 a year. Santa Monica pays its chief building official about $176,000 a year and its network administrator $117,000. Culver City compensates those workers at approximately $149,000 and $96,000 respectively.

Human resources staff stated that it included Santa Monica in the benchmark report because both cities have coastal locations with tourism-based economies and nearby universities.

The only nearby cities included as comparisons are Paso Robles and Santa Maria. City staff did also use the county of San Luis Obispo as a benchmark.

In the report, city staff claims that it placed a focus on statewide coastal cities because San Luis Obispo competes with them for employees. However, the report also says that 57 percent of applicants for city jobs reside in San Luis Obispo and Santa Barbara Counties.

Nevertheless, human resources staff opted not to use the local private sector labor force as a benchmark which would have lowered the median income. Staff did, though, include analysis of the local labor market in the overall study, as directed to do so by the city council.

Although San Luis Obispo worker pay may stack unfavorably when compared with cities like Santa Monica, city employee compensation has actually spiked in recent years.

Since 2000, general fund staffing costs have approximately doubled, rising from about $21 million to around $42 million currently.

When unions enter negotiation with the city, though, they will have some bargaining chips. Some employees are currently enduring pay cuts from the last round of negotiations, and while the city is very indebted, it also has an investment portfolio of approximately $90 million.

Following the compensation study hearing Tuesday, the council will meet again in closed session on Aug. 26 to discuss a bargaining strategy. Then on Sept. 23, the council will hold a public hearing on employee pay.

Soon after that hearing, city management will likely begin negotiations with representatives of its largest employee group, the San Luis Obispo City Employees Association.

A ballot measure to renew the city’s half-cent sales tax is on the November ballot, and much of the debate over the initiative surrounds whether or not the city has used the tax revenue collected to backfill rising employee salary and pension costs. If the sales tax initiative were to fail, city management has said there is a possibility staff will receive pay cuts.