City employees could receive up to $1.89 million in bonuses this year, even after City Hall for the first time tapped a rainy-day fund this summer to cover a multimillion-dollar budget gap.
Facing a $5.8-million deficit in June, the City Council approved a plan that included spending cuts, fee hikes and taking $1.44 million from the city’s rainy-day fund. Another $1.25 million was diverted from library and police programs — less than the budget for employee bonuses.
Still, City Manager Mike Flad said the bonuses are how the city has long decided to compensate its employees.
In fiscal year 2009-10, city employees got $1 million in bonuses out of an available $1.87 million at a time when Burbank also faced a multimillion-dollar shortfall, according to city records.
“We try to keep balance with recurring balances and expenses,” said Financial Services Director Cindy Giraldo. “But it is typical in this economic climate to use these one-time funds to close the budget gap.”
Other cities have imposed pay cuts and frozen their own employee bonus programs as they too struggled with their deficits. And some, including Glendale, have suspended their bonus programs altogether, citing the poor economic climate.
Despite the recession and its impact on revenues, Burbank continues to budget anywhere from 2.5% to 6% of the total pay to members of some unions for the bonuses — a structure that is negotiated into their contracts.
City officials declined to provide information on how much bonus pay went to which worker, or even a certain job classification, last year, citing personnel confidentiality rules. Instead, officials provided only lump sums paid to each employee group — and only for fiscal year 2009-10.
In declining a public records request by the Burbank Leader, the city attorney’s office argued that the disclosure would violate workplace privacy protections.
“Given that the merit pay awards are directly related to an employee’s performance, we believe that disclosing the actual individual amounts would violate the privacy rights of individuals relating to their performance or lack thereof,” said Juli C. Scott, chief assistant city attorney, in the response letter.
The city’s stance appeared to differ greatly from Glendale, which last week posted detailed information on the $1 million in bonuses paid over eight years to mid-level and top executives.
The information, posted on the city’s website, included how much bonus money went to specific job titles — and even named top executives.
Officials there cited a post-Bell era of government transparency in how taxpayer money is spent — referring to the small south L.A. bedroom city that has been embroiled in an employee compensation scandal.
Glendale suspended the bonuses two years ago, citing ongoing budget deficits brought on by the recession.
In Burbank, employees must earn an overall rating of “exceptional” to qualify for merit-based bonuses, meaning they must be recognized as outstanding and as having exceeded the expectations and requirements for their position.
Communication, job knowledge, initiative, teamwork and work quality are all taken into consideration.
A supervisor must also submit documents articulating what the employee did to deserve the spot bonus and why he or she should not have to wait for an annual review, said Management Services Director Judie Wilke.
“We give it to overachievers and those that go above and beyond,” Wilke said.
The City Council does not sign off on individual bonuses, but approves the programs when reviewing agreements with the Burbank City Employees’ Assn., Burbank Firefighters-Chief Officers’ Unit and Burbank Management Assn. Executives and unrepresented managers — anyone that reports to a department head or may be an assistant or deputy director — have bonus programs approved separately by the council.
City Councilman Jess Talamantes said he did not have enough information on Glendale’s decision to release the information, and so deferred to Flad, who defended the bonuses as a necessary incentive at a time when salaries have been capped.
Some groups of employees, such as police officers, do not have bonuses written into their contracts.
“We are asking for our employees to do more work with less money,” Flad said.
However, only Burbank executives and unrepresented management employees have frozen salary ranges during the last fiscal year. The vast majority of city employees have received incremental salary increases. For eligible employees, those salary increases would come in addition to any bonus payout.
Flad noted that the $1 million in merit pay given out last year was just 0.7% of the total gross payroll.
Cities choose to compensate their employees in different ways, he said, and the bonus program in Burbank is “a difference in compensation philosophy.”
The pay-for-performance component is also more in line with how the private sector handles bonuses rather than seniority, Flad said.
Per their employment contracts, Flad and City Atty. Dennis Barlow are ineligible for merit pay.
Of the 874 employees eligible to receive merit-based bonuses last fiscal year, just over 50%, or 445 workers, received one, according to the overview provided by the city.
City officials also declined to give a dollar range for the bonuses handed out, although Wilke said employees can get up to 5% of their salary, excluding executives. Even if an employee receives an exceptional evaluation, the city is not obligated to provide a bonus, she said.
“Whether or not they are deserving of merit pay is up to management’s discretion,” she said.