Santa Ana council members have approved pay raises for 477 police officers, sergeants and other police department employees amid city staff projections of major funding shortfalls that could require millions of dollars from reserves to make ends meet.
"I think that this proposal is modest, given the need in this town," Councilman Jose Solorio said during the July 5 meeting, adding that the increase will help with retention and recruiting.
Santa Ana officers are typically paid 20 to 25% "below market," which drives recruits to other departments, Solorio said, adding, "We've got to stay competitive."
Before the new labor contract, median total compensation for a Santa Ana officer was about $213,000 per year, including $111,000 in pay before overtime and $88,000 in benefits, according to city data published by Transparent California.
The starting salary was $77,000, plus extra pay opportunities, like $1,900 per year for being fluent in English and Spanish.
The new contract raises the base salary for officers and sergeants by 5.6% percent to 10.6%, depending on seniority and work schedule. At least a third of officers will receive raises of 8.1% or more.
Staff attribute the citywide budget shortfalls mostly to sharply increasing pension costs for retired employees (up $22 million per year since 2014 and continuing to rise, largely due to police pensions) and the cancellation of the city's jail contract with U.S. Immigration and Customs Enforcement (a loss of $11 million per year).
And staff say the shortfalls, projected at about $9 million per year for the next two years, are on track to increase in future years as pension costs continue to rise faster than the city's revenues. The situation has sparked interest among some council members to put a tax increase before voters within the next year.
In return for the pay raises, police employees agreed to increase their contributions for pensions and cap the city's payments for their medical costs at current levels. These changes are projected to save the city $1.1 million of its additional $3.8 million cost for the contract this fiscal year.
For the remaining cost, city staff say they're confident they can absorb it into the existing police department budget, through shifting jail employees to different positions, charging overtime to non-general fund revenue streams where appropriate, and extra revenue from unpaid parking citations.
If that doesn't pan out, staff say they'll notify the council and recommend ways to raise more revenue or draw an additional amount from reserves.
"All of us are feeling pretty confident that this was a very good plan," interim City Manager Cynthia Kurtz said in a follow-up interview, referring to the views of staff. "But if something doesn't come to fruition, we'll be back to tell the council."
The new, one-year labor contract with the Santa Ana Police Officers Assn., which covers 293 sworn officers and sergeants and 184 non-sworn Police Department staff, was approved on a 5-2 City Council vote.
Voting in favor were Mayor Miguel Pulido and councilmen Solorio, Juan Villegas, Vicente Sarmiento and Sal Tinajero. Opposing it were Michele Martinez and David Benavides.
The council also gave final approval July 5 to a budget for the 2017-18 fiscal year, which began July 1.
Supporters of the new police contract agreed with Solorio that the raises are needed to bring Santa Ana up to market rate, and noted the officers' concessions, which are projected to reduce the city's costs for the increase by about 29%.
Martinez and Benavides said they support the officers, but that the city simply can't afford the increase.
"I can't support this, because we cannot sustain this in the long-term," Martinez said.
She questioned whether the city was truly paying below market.
These types of cost increases, Martinez said, will ultimately push the city to the brink of bankruptcy like it was a few years ago.
By the 2019-20 fiscal year, Martinez said the city will "find ourselves in a hole, and I don't think we're gonna get out of it this time."
As for the market-rate comparison, Kurtz said city staff's analysis found Santa Ana was below the officer pay rate for comparable cities by a couple of percentage points.
Kurtz said she wasn't able to immediately provide a copy of the analysis, but that it looked at cities of a similar size and level of service, and within the same geographic hiring pool.
Voice of OC reviewed police compensation data for Santa Ana and the other two largest cities in Orange County, Anaheim and Irvine. The review found that before the pay raise, Santa Ana was already compensating its officers more than its two largest neighbors.
Santa Ana's starting salary for officers was $4,400 higher than Irvine's and $6,100 higher than Anaheim's. And last year, median total compensation for Santa Ana officers was higher than Irvine and Anaheim, both with and without overtime included.