After going without cost-of-living salary increases for five years, Signal Hill police officers are getting pay raises as part of an agreement reached by the City and the Signal Hill Police Officers Association (POA) on a two-year labor contract.
The pay raises, however, don’t come without some “give and take,” city officials said.
As part of a memorandum of understanding (MOU) that was unanimously approved by the City Council at its Dec. 17 meeting, the City has agreed to give police officers a 6-percent pay raise for this fiscal year, effective retroactively as of last July 1, and a 5-percent pay raise in Fiscal Year 2014-15.
In return, POA members have unanimously agreed to pay their “full employee share” toward their California Public Employees’ Retirement System (CalPERS) pension costs.
Under the contract, police officers will contribute an additional 3 percent of their pay (for a total of 7 percent) toward CalPERS pension costs this fiscal year and an additional 2 percent (for a total of 9 percent) of their pay toward pension costs next fiscal year.
The pension-reform provisions are expecting to generate more than $175,000 in savings for the City during the two-year period. After the savings are added in, the net cost of the pay raises is estimated to be $651,200, according to a city staff report.
The City will make a budget adjustment for Fiscal Year 2013-14 to cover the costs of the first round of pay raises through General Fund reserves, according to a city staff report.
The second year of the contract, however, comes with some contingencies.
The 5-percent salary increase and the 2-percent employee contribution in Fiscal Year 2014-15 only go into effect if sales-tax revenue doesn’t drop by $300,000 or more, pension costs don’t rise above current projections and voters don’t pass the controversial “Taxpayers’ Right to Know and Vote” initiative, which will be on the ballot for a special election on June 3, 2014.
While the City’s budget and the local economy are “slowly stabilizing,” there are still some “economic uncertainties” that exist, said Signal Hill Deputy City Manager Charlie Honeycutt, the City’s lead labor negotiator. He said one of the main concerns is the loss of redevelopment, which for years has been used primarily to subsidize development by covering oil-well-remediation costs, issuing bonds and paying for other expenses.
The State’s decision to dissolve redevelopment agencies has “hindered major economic-development projects from moving forward,” Honeycutt said. Projects in Signal Hill that have halted include a new permanent Fiat dealership planned by Glenn E. Thomas Dodge Chrysler on a lot on Spring Street near a Honda dealership and a retail/hotel development proposed by Signal Hill Petroleum at 700 Spring St. across from the Signal Hill Gateway Center, he said.
A key factor in the labor negotiations was a survey that indicated salaries for Signal Hill police officers and sergeants were about 9.5 percent and nearly 11 percent, respectively, below the “average mid-point” for survey cities, city staff said.
The disparity is mainly due to the fact that most police agencies are tied to multi-year labor contracts that have forced city governments to grant pay raises even as revenues declined during the Great Recession, according to city staff.
Signal Hill, on the other hand, has been able to negotiate with the POA to hold tight during the economic downturn and hasn’t granted any cost-of-living salary increases since January 2009, Honeycutt said. “You don’t increase your costs when your revenues are falling,” he said in a phone interview.
In fact, in 2010, the POA agreed to pay more toward their pension costs as CalPERS rates increased. Subsequently, in 2012, the City put a “freeze” on step/merit increases– pay raises based on years of service and performance.
Recently, however, more than half-a-dozen longtime police personnel– including a lieutenant, a captain, a detective sergeant and a police officer– have retired from the force. Honeycutt said it’s getting tougher for the Signal Hill Police Department, which has a total of 36 police officers, to find qualified recruits.
“The department has hired several well-qualified individuals to fill those vacancies, but finding qualified candidates is getting harder for a variety of factors, including competition for a shrinking pool of good candidates,” he said.
Honeycutt said new police officers have been most impacted by the step-increase freeze, since it has prevented them from advancing to their pay range and kept them at entry-level salaries.
Now, the labor agreement should boost the City’s competitiveness in recruiting and retaining new officers, he said. According to Honeycutt, the MOU allows for one step increase in Fiscal Year 2014-15 after which “the freeze will be re-established.”
Signal Hill POA Vice President Nick Davenport thanked the City Council and all city officials involved in the labor-negotiation process during the Council meeting, adding that the contract would aid the police department’s efforts to recruit and keep new officers.
“Throughout the negotiation process it was apparent that the City was both fiscally minded and yet very committed to professional police services,” he said. “Throughout the negotiation process, it was clear that the city had a strong commitment to providing quality police services to the citizens and businesses of Signal Hill. The new contract takes great strides in recruitment and retention of highly qualified officers.”
Signal Hill Mayor Michael Noll said of the contract agreement, “There wasn’t the bitterness I’ve seen in the past.”
Councilmember Larry Forester thanked the POA for “sitting up at the table,” adding that the City and the union were both willing to “give and take.”
One major contingency for the contract to be fulfilled, however, is a provision that allows the POA and the City to revisit labor negotiations if voters approve the Taxpayers’ Right to Know and Vote initiative next year.
City officials said the initiative was tied into the contract after a fiscal analysis released by an independent consultant in November concluded that the ballot measure, if passed, would have major immediate and long-term impacts on the City’s finances, potentially affecting about 13 percent of Signal Hill’s General Fund budget.
The initiative amends the City Charter to require that all new city taxes, assessments and fees be approved by a two-thirds majority vote in a special election. It also requires that all city taxes and fees sunset every 10 years.
Maria Harris, a member of Signal Hill Community First, a watchdog group that drafted the initiative, disagreed with staff’s concerns, stating during public comment from the floor that the measure would only apply to new sales taxes, user-utility taxes and property-related taxes, assessments and fees.
“The Taxpayers’ Right to Know and Vote will not affect the existing structure of finances,” she said. “It does provide for a greater level of transparency to the voter.”
City Attorney David Aleshire pointed out, however, that existing taxes, fees and assessments would be impacted since the initiative, as it is written, requires they sunset every 10 years.
“We would not want the city committed to a set of payments to employees that might not be affordable in the future,” he said. “We have no problem with honoring these contracts, but, if this measure passes, it’s a whole new ball game.”
Vice Mayor Edward Wilson and Councilmember Tina Hansen both agreed with Aleshire’s interpretation of the initiative. “Unfortunately, it’s not just anything new,” Wilson said. “It’s everything that currently exists… I think it is prudent for us to be looking at this issue and what fiscal impact it may have on the City.”
Among other provisions in the labor deal, the City has agreed to increase its contribution for the “cafeteria plan” benefit, giving an extra $100 per month to employees requiring funds for health, dental, vision and long-term-care premiums. Additionally, a $10-per-month increase is proposed for dental benefits.
The City is also providing a way for police personnel to “buy back” accrued vacation time and is increasing detective-standby pay from $100 per weekend shift to $150 this fiscal year and $200 next fiscal year.
Other Council highlights:
Recognitions and presentations Mayor Michael Noll and city officials acknowledged that the newly built Signal Hill Police Station and Emergency Operations Center was recognized as “Project of the Year” by the Southern California Chapter of the American Public Works Association. City officials gave a presentation on the award and the ceremony. Noll also recognized the Signal Hill Library for its 85th anniversary, and Jennifer Northup, founder of Signal Hill-based Silver Spoon Jewelry, Inc., gave a presentation on her business as part of the City’s “Shop Signal Hill” program.
Community garden project City staff gave a presentation on the design and cost estimates of the proposed Community Garden project. Though staff presented plans to add “optional features,” such as a gathering space, trellis and extra trees, which would have cost an additional $13,000, the Council decided not to add the features and instead approved a new “streamlined” design that would cost a total of $160,000 and provides Americans with Disabilities Act (ADA) access. The City purchased the property that will serve as a community garden at 1917 E. 21st St., adjacent to Signal Hill Park, in 2011 after a house was severely damaged from a fire on the property.
Cherry Avenue widening project City staff provided an update on the Cherry Avenue Widening Project, stating that construction is expected to start next summer after being in the works for about 12 years. The $3.6-million project has been a longtime goal of the City to reconfigure the street to alleviate a bottleneck that forms on Cherry Avenue during rush-hour traffic from Pacific Coast Highway to 20th Street. The project is being funded entirely through State Transportation and Federal Highway Administration grants. Phase 1 includes new asphalt paving, new traffic signals at Cherry Avenue and PCH and other improvements. Phase 2 includes additional new asphalt paving and installation of a new landscaped median. The City is expected to advertise for construction bids on the week of Jan. 6 with all construction taking place from May through October 2014.
The next Signal Hill Council meeting is scheduled for Jan. 7 at 7pm at the Council Chamber.