A Model for Police Compensation in 2013

Our goals for law enforcement in San Jose must be based on need and the amount of tax revenues on hand. As Gov. Jerry Brown stated last month, “People want to have more childcare, they want to have more people locked up, they want to have more rehab, more, more, more. More judges, more courtrooms. We have to live within reasonable limits.”

San Jose has no choice but to operate in the world of reasonable limits, and it can only allocate money that is actually on hand. The city should not make new promises that cannot be kept. 

Much has been said recently about law enforcement budgeting. A year ago, I wrote two articles suggesting a specific percentage of the budget should be allocated to police, thus allowing the police department to grow in keeping with future tax revenues and a growing population. Those previous posts can be found here and here.

Since this is not the case today, I must work within the current system.

One of the shared community goals is to increase the actual number of police officers. In addition, another shared community goal is for pension reform. In my opinion, these two objectives are inextricably linked. Back in 2010, I initiated, and a majority of the City Council supported, ballot Measure W. Voters in November 2010 approved Measure W by more than 72 percent. This gave us—for the first time ever in San Jose—the ability to create a new, lower cost pension plan for future employees.

Since the passage of Measure W, a second-tier pension system has been implemented for all new city employees, except for fire and police. Neither the fire nor the police unions agreed to accept a new retirement plan for future employees—again, we are talking about people who do not even work here yet. The restructured, lower-cost retirement plan for new hires is fundamental to financial stability, and it allows us to add new police officers over time as savings are achieved through pension reform. 

Countless other government entities across our state and country have implemented a tiered pension system that includes public safety unions. In my view, a second tier must be in place for fire and police prior to any compensation discussions.  Again, our Governor clearly agrees with this line of reasoning: “Pension reform can be hard to talk about,” he said. “In the long run, reform now means fewer demands for layoffs and less draconian measures in the future.”

When it comes to the present discussion on compensation, one option is to give all employees an ongoing raise. While an ongoing compensation increase may be ideal, there is no money to backfill it next fiscal year, which would then result in 100 percent pay cuts for some city employees—in other words, layoffs. Every 1-percent compensation increase to all city employees would cost $7.9 million per year. However, this assumes that all positions are equal in value, and are equal in terms of interest for recruitment purposes. I can guarantee that in any outcome achieved, no one will be happy since tax dollars are finite. Those who want, may not get; and those who get, may want more. Knowing this, I suggest an option for cash in hand now for those who enforce the Social Contract.

This proposal would function in the following manner: Each police officer would be given the option to select a scheduled redemption of their accrued benefit of up to $15,000 over 15 months, starting in the upcoming fiscal year. The $15,000 could be derived—by employee choice—from any of three accrued sources: comp time, sick leave or vacation time. These three accrued sources currently add up to over $50 million just for police officers alone, the majority of which is sick leave at approximately $36 million. This $50 million is recorded as an accounting liability and must be paid out when someone retires or resigns.

Paying a portion of this out now would reduce future payouts that would be even more costly in the future, as accrued benefits are typically earned at a lower pay scale but always paid out at the highest pay scale. This action would also enable a future council to have more money to fund city services. The $15,000 payout option would cost approximately $15.2 million if every police officer was to redeem the maximum, and would consume over half of the $22.5 million in one-time funds that are available. 

There is also potential to add new police officers. On Tuesday, the council will take action on a $6.9 million reimbursement from the county on property tax recalculation. This one time windfall of money should go directly to hiring new police officers if, and only if, a new retirement plan is in place for the police union. This money could be used to “hire ahead,” which would front the cost of new officers being vetted to coincide with future vacancies as current officers retire or leave. Incidentally, $6.9 million is approximately the same amount of money the city pays to subsidize golf and the Hayes Mansion each year.

The fact is that each individual has their own economic situation, which may or may not include a variety of personal factors. Whatever the situation may be, it is impossible to examine each police officer’s household income and ensure that they are paid according to their needs. This option ultimately allows the individual to choose what is best. One individual may choose to redeem the maximum amount, while another may redeem half, while yet another may choose to not redeem at all, instead saving it up for a future potential payout. This option is based on individualism rather than collectivism.

With this spirit in mind, we acknowledge that individuals will pursue their own happiness, and, as a result, may seek employment elsewhere or a different vocation.

Pierluigi Oliverio is a councilmember for San Jose’s District 6.

14 Comments

  1. Wow, great idea P.O. A second tier for new hires! Go back and look at the offers that both Police and Fire made.  Both departments offered a second tier for new hires but that was not enough for Reed.  He wanted current employee pension dollars unless they opt into a yet to be created lower pension plan.  The public safety unions have offered just what you write about which would have saved money already.  Go back to your closed session meetings and convince the rest of your gang to get it right.

  2. Try sticking to a contract and honoring your word. your feeble attempt to get me to grab any money is too little, too late. I will instead gut it out and watch as the courts force you to pay me what you owe.

    At one point, had you and other council members not been so pompous and self righteous and actually wanted to solve the problem, I would have been inclined to work it out.

    As it stands now, you can wish for those days. They are long gone and now, out of anger and contempt for how you treated every employee of this city, not just fire and police, I want to watch as the courts give you the keester exam you all so richly deserve.

  3. Why treat all employees the same?  Clearly some occupations are overpaid, and some like police and the people that work in the waste treatment plant are now underpaid.

    I think for starters you can stop referring to police and fire as a single entity.  They are different, and the public perception of their respective importance is different.

  4. Yeah, your Model will never work . The Measures that you helped pass are ILLEGAL . They are and will be tied up in the Courts for years . The costs will be into the Millions to be paid for by City Residents . Courts have already ruled that the city is responsible for costs associated with these lawsuits ( Both Plaintiff and Defendant). San Jose is facing 13 different lawsuits regarding these illegal measures and to date has spent aprox. 1 Million Dollars and the real fight hasnt even begun.

    If you were serious about Pension Reform and retaining the Best Public Safety possible then you would have tried to truely negotiate not just Impose your(REED) will .  Now its a fight that san jose has already lost. we have lost millions in training costs, we have lost unmeasurable experience ,we have lost “safest big City Title” , we have lost public Safety that Trusts or believes in the Community it serves.

    Public Safety offered a proposal that would have saved $500 Million Dollars inside of 5 years , Guaranteed ! Mayor Reed & Council refused to even look at it. Public Safety will continue to leave in droves , for better Pay , Better Compensation ,Better Benefits , Better appreciation

  5. So your idea is to pay us a portion of what is, for the most part, ultimately owed us anyway?  Wow, that’s very tempting and should change everything.

  6. It seems like a simple concept, but apparently is quite hard to understand.  Until San Jose gets back to offering competitive wages and benefits, it won’t be able to increase the number of officers.  The number of new hires will have difficulty keeping pace with the number of experienced officers leaving for better situations.  Some of those new hires will then quickly leave for the same reasons, taking with them the $170,000 worth of training the city provided.  Even more alarmingly, the current exodus will pale in comparison to what will happen if Measure B is ever fully implemented.  If that ever comes to pass, SJPD will be a ghost town.

  7. It’s funny how extortion is the name of the game now. You won’t give us $6.9 million for now hires until we give the retire plan you want. Keep your money and spend it on side walks at the rose garden.

    Have you told the new recruits in the academy that their retirement will not be vested and it can be taken away at anytime by the city. Wait tell that one comes out. Do you think they will be happy?

    Austin Police Department is coming and recruiting in the area all week. Did you see the add they put in the Sunday mercury news. Classic, it read. “Come and work for a community and a city that appreciates your service.”

    They are not just talking about current officers, but current recruits in the academy, and future recruits. Their 5 year plan is to hire 400 officers.

    In the bay area their will 500 to 600 officers retiring in the next year alone. How are you going to compete with them?

    Good luck finding officers to come and work here, that security guard plan that the residents of district 6 are talking about is laughable. No common sense out their, just sheep, like yourself.

    • One thing about Texas…they sure take care of their own. Our administration should feel embarrassed. Other states and other cities are looking down at them. That ad in the paper tells part of it.

  8. Two things, now that property taxes are going up again, the city has collected $6.9 million for the year. You have a bank of money that the city accumulates every year to pay sick, vacation and comp time buyouts that equals $15.2 million.

    Combine those two figures together and that equals $22.1 million. Sounds like these figure will be a yearly occurrence. The mayor stated that in order to give the police its 10% to make them whole again, it would cost $20 million a year. Well now we know we have the money thanks to you Pier. Plus we still have $2.1 million left for overtime.

    Second thing, Pete Constent wrote a memo about a year and half ago about getting rid of your CalPERS PENSION for the mayor and councilman. As a member of district 6 and a taxpayer of San Jose, I want to know were this memo stands. It makes me sick that you do not pay one dime towards your pension. Remember, every move you make, we are watching you and your council members. EVERY MOVE!

  9. Pier states, “Neither the fire nor the police unions agreed to accept a new retirement plan for future employees”. This is blatantly and patently not the truth. The truth is that the SJPOA put forth a proposal for second tier officers for which the city refused to negotiate. The city made their own proposal to the SJPOA and refused any further negotiations. The city has refused any attempt at a collaborative agreement with the SJPOA, as almost all other cities have done with their respective POA’s, including San Francisco PD and Oakland PD. Pier and most of his cohorts on the city council, are apparently blind to the fact very seasoned police officers continue on an almost daily basis to flee from this department, and they are being readily snatched up by other police departments. This city has lost tens of millions of dollars they spent in hiring and training officers who have fled, not to mention the hundreds if not thousands of years worth of institutional knowledge between them. Pier, you endorsed Gary Kirby for the Chief of Police. You should sit down with him so he can educate you on the mess this council and mayor has made, the turmoil created, and morale destroyed at the police department. This city has saved hundreds of millions of dollars over the years by perennially understaffing this department by 50% under the manpower it should have had. Where did that money go? How could this city possibly not have the means to offer a compensation package to it’s police officers of other cities in this area? We are also paying 25% of our gross salary into our own retirement which is way more than twice as much as the next closest department. Offering to let officers cash in some of the time that they have accrued is simply a ridiculous solution, just like your notion that 50 reserve officers can make a big dent in staffing levels. How has that proposal gone?

    You should also thank Mayor Reed for failing to allow voters to put a tax on the ballot to fund public safety. The worse that would have happened is that it would have been voted down, but it appears that it would have passed. No wonder Councilman Rocha is so frustrated to the point of not wanting to run again.

    It is really a shame that this city council and mayor have tried to remedy past poor financial decisions, such as the Hayes Mansion and golf courses, and balance this city budget on the backs of its remaining dedicated police officers. We have not taken a raise in many, many years, and in fact took a 10% total compensation cut to help the city and keep police officers. We have also paid huge increases into our retirement and current medical, but apparently all this has not been enough. No wonder officers are fleeing here as fast as they can. 

    Also, where is the second tier option for current officers, Pier? You know, the option that was part of Measure B. It is still being decided on by the IRS, and probably will be for many years to come, while in the mean time the remaining officers will be paying upwards of 40% of their salary into the retirement system, before any other deductions. How many recruits you think are going to stick around after they graduate the academy and suddenly they are making 40% less? How many more millions you going to put into hiring and training officers for other cities?

    I hope you and this mayor and city council can come to your collective senses, swallow your pride, and do the right thing. I seriously doubt this will happen though.

  10. Hows that pay raise coming along for top city officials? Just another kick to the crotch of the rank and file city worker! PLO is out of touch. We already knew that though. He writes these silly little proposals just to see what will stick. The reality he probably doesnt even read these comments once its finished. I invite anyone to go to a council meeting and just watch the faces of the arrogant untouchables in the tower. They could care less about their citizens or dedicated workers. They are spitting in everyone’s face and most will walk with their nice safe retirements on the taxpayer dime! Below is a 2 minute summary of how employees feel (they only give 2 minutes while they roll eyes and yawn)  http://youtu.be/8mlx51RMKvQ

  11. PLO you think you are making the police an offer they can’t refuse?  Police Departments around the State and Country continue to recruit and hire officers from San Jose Police Department with better pay and benefits. How low will staffing go? It is your call! It is your credibilty that will suffer along with your contituents whose safety you have put at risk.

  12. It is too bad that the current people at City Hall don’t understand that we want to be safe in our neighborhoods!  We want a policeman to respond when we call 911.  We want to be able to go out for a walk after dark like we used to be able to do without being afraid.  Public safety is the primary responsibility of government!!!