Costa Mesa officials will pay more to attract, keep staff and prevent high turnover rates
Costa Mesa officials looking to attract top talent into City Hall — where salary and benefit packages pale in comparison to what’s offered by surrounding municipalities, causing high turnover — are making some adjustments to increase its curb appeal.
After a robust discussion during a regular meeting Tuesday, the City Council approved the allocation of $450,905 in the current fiscal year to make needed personnel improvements across departments, including adding new positions, changing duties and combining some part-time assignments into new, full-time jobs.
The funding will also help hike the salaries of historically hard-to-fill positions and bring Costa Mesa into closer range of what other cities, including Huntington Beach, Fountain Valley, Santa Ana and Irvine, offer.
Continuing that commitment is estimated to cost $1,814,620 annually, which staff indicated could be absorbed by consolidating vacancies and a strong post-pandemic budget forecast for a general fund surplus.
“Our revenues are still growing, and we believe we will have a surplus of about $2.8 million by the end of the fiscal year,” Finance Director Carol Molina told council members.
Council members Tuesday dedicated up to $640,000 annually to create competitive packages for hard-to-fill jobs and increased City Manager Lori Ann Farrell Harrison’s base pay to $300K.
The city will soon also have at its disposal a second $13.1-million installment of American Rescue Plan Act dollars that must be dedicated by 2024 and can be applied toward restoring positions lost or underfunded during the pandemic, recruitment and increasing compensation to market levels, Molina said.
A promising financial picture is contrasted by city staffing, which declined after the Great Recession and never rebounded, according to Human Resources Manager Kasama Lee.
Costa Mesa operated with 611 full-time employees in 2009-10, compared to 530 today. Although the city’s general fund grew 40% over roughly the same time period, the amount spent on employee salaries declined, from $46 million in 2009-10 to $45.7 million in 2019-20.
Lee described the difficulty of recruiting candidates for positions with salaries 10% to 20% lower than what’s offered in nearby cities. A principal planner earning $126,096 in Costa Mesa, for example, might get $160,559 in Santa Ana and $153,252 in Huntington Beach. The city also offers less pension benefits and requires employees to pay more toward retirement.
During an ongoing recruitment for budget analysts, held from August 2018 to February 2021, the city received 337 applications and conducted nine rounds of interviews with 33 candidates, only to have two offers of work turned down. Although four were eventually hired, three have since resigned and one was released.
“About 56% of resignations are for employees who had less than three years of service,” Lee said. “We’re essentially a training ground for other agencies.”
City Manager Lori Ann Farrell Harrison acknowledged the proposal was “a big ask” but said it would help bring Costa Mesa more in line with median salary levels and, hopefully, attract more talent and experience.
“It’s a matter of what kind of city do we want to be when it comes to our workforce?” she posed. “[This] is not a panacea, but it’s a huge step forward.”
Council members considered their options in a robust discussion. The panel in December approved spending $640,000 annually to create competitive pay packages for a slate of new positions, ranging from engineers and building inspectors to police communications and lifeguards.
Councilman Loren Gameros said initiatives undertaken by the council require a strong staff working behind the scenes.
“We’re not just spending money, we’re investing — in the people who work to support this community,” he said. “These people work, and these people need to be compensated.”
Mayor John Stephens agreed.
“It comes down, I think, to constituent services,” he said. “We have to be competitive in recruitment and retention in order to deliver the city services our constituents require.”
Members approved the recommendation 6-0 (Councilman Don Harper was absent). They requested staff prepare a five-year projection of costs and also asked for clarity on how future American Rescue Plan funds might be spent.
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