SLO may give $2,000 bonuses to 93 high-ranking employees

April 4, 2017

By JOSH FRIEDMAN

Update: The San Luis Obispo City Council on Tuesday unanimously approved a plan to hand one-time payments of $2,000 to 93-management level employees, including City Manager Katie Lichtig and City Attorney Christine Dietrick.

Original: Although the city of San Luis Obispo is facing multi-million dollar shortfalls, city officials have put forth a plan to give a one-time payment of $2,000 to 93 management-level employees. The proposal will go up for a vote at Tuesday’s SLO City Council meeting.

In addition to considering the bonus payments, the council will be asked to approve increases to the management employees’ health and life insurance benefits. The bonus payments would cost a total of $186,000, while the benefit increases would cost about $65,000 annually, according to a city staff report.

If approved, the $2,000 payments and benefit increases would go to City Manager Katie Lichtig, City Attorney Christine Dietrick, nine department heads and 82 other management-level staffers. Lichtig already receives more than $300,000 a year in pay and benefits, and Dietrick receives around $270,000 annually in total compensation. Last year, both Lichtig and Dietrick received $5,000 retention bonuses.

Staff is proposing the one-time payments to compensate management employees for receiving less in city health insurance contributions than do members of the San Luis Obispo City Employees Association (SLOCEA), according to a staff report by Human Resources Analyst Nickole Sutter. The proposed lump-sum payments would also serve as a low-cost alternative to cost of living increases and would incentivize hard work and leadership.

Sutter’s proposal also calls for an approximately 5 percent bump in city health insurance contributions to management employees.

Additionally, Sutter suggests the city increase the term life insurance it provides to management employees from $50,000 to $100,000. Lichtig, Dietrick and the city department heads already receive the higher amount, according to the staff report.

Furthermore, Sutter is asking the city council to permit management employees to use more sick leave to care for ill relatives, something the human resources director said would not come at an increased cost to the city.

City officials are currently proposing revisions to the management employees’ compensation package, which expired at the end of 2016. Sutter is proposing the city council extend the previous agreement until June 30, 2018, with the proposed revisions to employee benefits included.

The city is currently facing a projected budget shortfall of more than $5 million in the 2021-2022 fiscal year. By that time, the city’s annual pension payment to the California Public Employees Retirement System (CalPERS) is projected to nearly double from around $11.7 million to $20 million.

The skyrocketing pension costs largely stem from a decision the CalPERS Board of Administration made in December to lower the retirement system’s discount rate from 7.5 percent to 7 percent. The change in the discount rate, or return on investment expectation, will be phased in over a three-year span, starting in the 2018-2019 fiscal year.

San Luis Obispo responded to the CalPERS changes by activating its Fiscal Health Contingency Plan, which includes limiting hiring to essential personnel; restricting city-funded employee travel and training; and deferring or dropping some capital improvement projects.

In her report on the proposed bonus payments and benefit increases, Sutter said that given the CalPERS decision and the activation of the fiscal contingency plan, the city is trying to give management employees more pay in a manner that will not be compounded by increasing obligations to CalPERS. Hence, the city is proposing freezing salaries for nearly half of the 93 employees in the management group over the next 15 months.

The city council will discuss the proposed bonuses and changes to employee compensation during its early meeting Tuesday, which is scheduled to begin at 4 p.m.







Loading...
  1. mb business owner says:

    Why is anyone surprised. The City Council has shown their lack of ability to manage their employee – the City Manager with their absolute inaction in terms of the “video” she was instrumental in. SLO residents should be absolutely disgusted with this and taking a very serious look at who they have elected to power.

    (19) 19 Total Votes - 19 up - 0 down
  2. hijinks2 says:

    Bonuses – really!

    So the City Manager and other Department heads get caught demeaning employees – see article on fire fighters and now they are seeking approval to give upper level managers $2,000 each as a bonus.

    First, this is a gifting of public funds which is illegal.
    Second, is it a coincidence or just bad timing that a motion before council is going forward right as the City Manager, Fire Chief and possible other Department heads are being investigated for misconduct. This sounds more like hush money or rewards for lying to the investigators.

    Next, come on Nicole Sutter in HR is carrying forth a budget line item that affects the City as a whole. How is she qualified to carry this motion forward? Her degree, if you can call it that is in kinesiology? How does that relate to fiscal budget management? I know that she is really amazing in employee relations, just ask a half dozen fire fighters!

    Really, take public funds and use it as hush money!

    (28) 34 Total Votes - 31 up - 3 down
  3. demiseofslo says:

    So glad I moved out of SLO!! The city has been in the shitter for years and the staff refuses to acknowledge it. Run it into the ground and beg for forgiveness later.
    What the hell does the city manager need more than $300k a year?
    I make less than 1/6th of that per year, and I manage my money appropriately.
    I’ll never be able to buy a house in my hometown though given the identity crisis and in capabilities SLO has chosen to pursue.

    (28) 32 Total Votes - 30 up - 2 down
  4. mullyman says:

    SLO is just like the rest of the democrat run Calif. Your going broke so you give the elite more money and decrease services for the people. How does any city official deserve a larger salary than the congress and house that governs the whole country. You don’t get the health benefits equal to employees but get paid way more. My heart blends for you poor people. There is not one of you who deserves to get paid the salaries you get. Unbelievable!!!!

    (35) 39 Total Votes - 37 up - 2 down
  5. whatdouno says:

    Big government and their entitled employees are sucking the life out of hard working taxpayers. Government has become a cancer, you just keep throwing money at it and can’t kill it, and it just continues to thrive and want more.

    (44) 50 Total Votes - 47 up - 3 down
    • kayaknut says:

      Never more apparent than with Governor Brown right now. He’s telling us to just give him more money and this time and he’ll fix our roads and not to worry about the other money that we gave him that was supposed to fix them, just trust him that money went to a good use.

      Similar phases come from others in the local political/public sector world with just as much truth.

      (28) 30 Total Votes - 29 up - 1 down
  6. Pelican1 says:

    The city has it all wrong….they should be paying US!

    (46) 48 Total Votes - 47 up - 1 down
  7. rukidding says:

    This has to be the biggest insult put forth to the taxpayers. It is very clear that these employees enjoy the country club lifestyle without the golf course although that may follow in the next benefit package since I brought it up. It is perfectly clear that these people do not have any respect for the people who they work for. I do not live in the city, thank goodness, because I would probably want to start a massive recall of anyone on the council who supports this. It’s at the point where enough is enough. How much more unfunded benefits, higher fees, increased salaries can the taxpayers absorb?

    (49) 53 Total Votes - 51 up - 2 down
  8. copperhead says:

    How about taking that $200k and giving every bum in this town a one way limousine ride to Bakersfield? Seems like that would be a much better appropriation of funds.

    (41) 51 Total Votes - 46 up - 5 down
  9. r0y says:

    The proposed lump-sum payments would also serve as a low-cost alternative to cost of living increases and would incentivize hard work and leadership.

    This person knows almost nothing about finance. Please tell me we do not have a “human resources” person deciding financial matters? Tell me there is an adult, financially-speaking, that will oversee this and point out the glaring errors.

    1) You do not “incentivize” anything by paying it all in advance.
    2) A lump-sum is more financially “hurtful” than payments over time, thanks to a little thing called deflation (hint: our money never gets worth more in the future, hence the “cost of living” you are trying to alternately service); ceteris paribus, of course.
    3) One should never have the lowest-common denominator of the lowest-skilled college type (human resource management / business school) work on the things that cost a lot of money. When you do, you get government.

    (51) 55 Total Votes - 53 up - 2 down
    • SLOBIRD says:

      They have to do that because Monica Irons (husband mayor of Morro Bay) is the Human Resources Manager and the landlord for Katie Lickit when she is in town.

      Actually, Katie Lickit and Fire Chief Garret Olson should have to pay the $70,000 legal report since the taxpayers will not be allowed to see it and the story will just fade away. Where is our press, why are you not pursuing the right to see this report, paid by taxpayer money and no one but the Council (maybe), City Attorney Christine Dietrick (personal friend of Katie and Monica who’s brother was allowed special hiring privileges at the City for a job unqualified for) and Katie Lickit. Just a bunch of bull shit in this corrupt City. So glad I moved out and as a native SLO and have seen this wonderful city deteriorate in so many ways. Maybe because for over 10 years or more we have seen incompetent manager, democratic governance with their tax and regulations and interpersonal close relationships with the management team.

      Can’t wait until Diablo closes and you will be earning that $300,000 salary Miss Lickit!

      (4) 4 Total Votes - 4 up - 0 down

Leave a Comment