With the city's financial recovery in full swing, Palo Alto is set to approve on Monday raises for more than 200 managers, as well as for City Manager James Keene and City Attorney Molly Stump.
The City Council is set to sign off on 5 percent salary hikes for Keene and Stump, according to the agenda that the city released late Wednesday. Their annual salaries would go up to $275,353 and $246,688, respectively. Both contract adjustments are set to be approved on the council's consent calendar, which means they will not be discussed unless council members choose to pull it from the calendar.
Later in the meeting, the council also plans to approve a resolution adopting a two-year contract with its "managers and professionals group," the only labor group that is not in a union. Though details of this contract were not released Wednesday (they were scheduled to be publicized Thursday), the group's salary adjustments typically mirror those of the Service Employees International Union, Local 521. In a contract that the council approved in March, the roughly 600 workers represented by the SEIU received 4.5 raises over a two-year period.
The SEIU contract also included salary realignments for hundreds of employees, with the goal of making them comparable to similar positions in other cities. This resulted in about 320 employees getting additional raises, which ranged from 2 percent to 10 percent. Managers are likely to undergo similar realignments under the contract that the council will consider on Dec. 8.
The raises come at a boom time for the local economy. Between fiscal year 2013 and 2014 (which ended July 30), the city experienced significant growth in sales tax, hotel tax and documentary-tax revenues. Sales taxes revenues went up by 14.9 percent; hotel taxes revenues jumped by 13.5 percent; documentary-transfer revenues increases by 14.7 percent; and property tax revenues went up by 6.4 percent.
Overall, revenues from the major categories in the general fund have jumped from $82.8 million in 2013 to $91.1 million in 2014.
On Tuesday night, the council's Finance Committee heard an update from Director David Ramberg, assistant director of the Administrative Services Department. Ramberg referred to the budget picture in 2014 as a "positive financial story," with higher-than-expected revenues and expenses that came in 1.2 percent under budget.
Lalo Perez, the city's chief financial officer, added that "we've been very fortunate that the economic recovery is going faster than we thought."
He attributed the positive number to both high revenues and the compensation adjustments that the council made during the 2009 recession, which included new requirements for employees to contribute to their health care and pension expenses.
The hot economy is also helping the city deal with its infrastructure backlog. Over the past four years, budget surpluses have allowed the city to add $20.5 million to its infrastructure reserve over the past three fiscal years.
Comments
Another Palo Alto neighborhood
on Dec 4, 2014 at 11:00 am
on Dec 4, 2014 at 11:00 am
Have no problem with these raises. Keene is like a CEO of a company. He is making a lot less than most CEO's and with no stock options.
Ventura
on Dec 4, 2014 at 11:20 am
on Dec 4, 2014 at 11:20 am
First let me say that I am very much in favor of compensating our city employees to be in line with other communities in our area. There are a lot of really great city employees in Palo Alto and they should be paid as the professionals that they are.
That said, I can't tell from this article what the total amount of the raises will be for these 200 managers, to determine if this is a wise fiscal move. Revenues went up from "$82.8 million in 2013 to $91.1 million in 2014". What percent of the $8.3M additional revenue do the raises represent? And these are raises, not bonuses, so the City will continue to pay these increases even if revenues decrease.
Also, is there an obligation to complete the raises this month, one month before our new City Council members take over? I would really be interested to hear how our new City Council members would have voted on this. Maybe it is above board and the timing is coincidental, but the timing is interesting.
Crescent Park
on Dec 4, 2014 at 11:26 am
on Dec 4, 2014 at 11:26 am
And so the raid on the treasury continues.
More millions for staff and "consultants".
Gotta hurry, it's December!
Embarcadero Oaks/Leland
on Dec 4, 2014 at 11:27 am
on Dec 4, 2014 at 11:27 am
How much of a raise did Transportation Director Jaime Rodriquez get?
How much of a raise did Planning Director Hillary Gittelmann get?
Old Palo Alto
on Dec 4, 2014 at 11:44 am
on Dec 4, 2014 at 11:44 am
Skeptic has it right. Typical of liberal spending ideology. Get a little ahead of the game from tax revenues and immediately give raises to city employees who are already very well compensated and hire overpriced consultants to solve problems that should be solvable by those already employed by the city, i.e. city manager and executive level staff. How about using some of that money for infrastructure repairs instead.
Old Palo Alto
on Dec 4, 2014 at 11:45 am
on Dec 4, 2014 at 11:45 am
Mr Rodriguez has three jobs--CPA and two of his own companies--so he shouldn't get a raise as such. [Portion removed.]
Midtown
on Dec 4, 2014 at 12:28 pm
on Dec 4, 2014 at 12:28 pm
The City Manager job is not the same as a CEO of a private company. A CEO of a private company has responsibility for revenue / sales - something that the city manager has no responsibility for. And let's not forget that the city enabled the City Manager to buy a house, which according to Zillow has appreciated over $700,000 in value.
Also since benefits amount to another 50% of salary, this more like a 7.2% increase in the budget.
Since this amount to many millions of dollars both in expense, and tens of millions of dollars in increased liability, the consent calendar would not be how many organizations would handle something of this magnitude.
Old Palo Alto
on Dec 4, 2014 at 2:05 pm
on Dec 4, 2014 at 2:05 pm
Being a Palo Alto city manager is better than having tenure at Stanford or being a general/admiral in the military. I was reading the salaries of commanding officers in the military, people who risk theirs lives for our country, and they are less than 1/2 what these people are paid. These people are paid far more than Stanford professors and with far greater benefits. In fact, most of the top managers in the city are paid far more than doctors, lawyers, engineers, and other professionals. And, they have no P/L responsibility. This is absurd.
Embarcadero Oaks/Leland
on Dec 4, 2014 at 2:16 pm
on Dec 4, 2014 at 2:16 pm
[Post removed due to same poster using multiple names]
Another Palo Alto neighborhood
on Dec 4, 2014 at 3:13 pm
on Dec 4, 2014 at 3:13 pm
I think all of the top employees should have a public-process performance review that affects their salary — maybe ala Dancing with the Stars, half from the "expert judges" and half from the public — that even affects whether they remain employed. The way certain persons conducted themselves during the Maybell situation, including providing the public demonstrably false information, should be the subject of an ethics investigation, not reason for continued service and a raise. Public employees here have no incentive to put the interests of the public first.
Crescent Park
on Dec 4, 2014 at 3:19 pm
on Dec 4, 2014 at 3:19 pm
Yes, Jaime Rodriguez, Chief Transportation Officer, owns three companies outside his full time job with the City of Palo Alto. He doesn't answer his phone at city hall, but he answers the phone for his own private outside companies during regular City of PA office hours. Has anyone noticed all the ugly bright yellow street signs being put up throughout PA? Rodriguez owns a company that designs and makes street signs. It is called "Cell Signs." [Portion removed.] Even the semblance of impropriety isn't good for the city.
Evergreen Park
on Dec 4, 2014 at 4:53 pm
on Dec 4, 2014 at 4:53 pm
Sounds like an investigation is overdue-- in regards to Jaime Rodriguez and his conflict(s) of interest between his other three jobs and the City of Palo Alto.
[Portion removed.]
Evergreen Park
on Dec 4, 2014 at 4:58 pm
on Dec 4, 2014 at 4:58 pm
[Post removed.]
Professorville
on Dec 4, 2014 at 5:31 pm
on Dec 4, 2014 at 5:31 pm
I am very tired of the "excuse" that the city needs to align the salaries for it's staff with other cities. This just creates a spiral of ever increasing salaries. A much better criterion for needing to increase salaries would be if it was getting hard to find applicants for open positions. It's well known that, with the generous benefits and high job security, Palo Alto will have little problem with attrition or filling open positions if they didn't give ANY raises. This is especially true at the top and in the fire and police departments where crazy overtime rules create obscene effective salaries. Maybe if the City Manager could find a way to rope that in I would support giving him a generous bonus or raise. That's what a CEO would do.
Embarcadero Oaks/Leland
on Dec 4, 2014 at 6:07 pm
on Dec 4, 2014 at 6:07 pm
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another community
on Dec 4, 2014 at 6:46 pm
on Dec 4, 2014 at 6:46 pm
The resolution adopting the new management and professional salary schedules is not a "contract" because those employees are not bargaining collectively and do not have a union.
Some of the salary control points have been changed by "market adjustments" based on a survey of other governments, while others have had a "grade change" (each grade level is 2.5% above the next lower level). You can see the changed amounts and the reason for each change for those specific positions on PDF pages 48 and 49; a comparison of the current amounts and the new amounts as of July 1, 2014 on PDF pages 79-85; and complete salary schedules for July 1, 2014 on PDF pages 32-38; and for July 1, 2015 on PDF pages 39-45 at Web Link
Another Palo Alto neighborhood
on Dec 4, 2014 at 7:56 pm
on Dec 4, 2014 at 7:56 pm
This City Council will spend its way out of power.
Another Palo Alto neighborhood
on Dec 4, 2014 at 8:07 pm
on Dec 4, 2014 at 8:07 pm
> Have no problem with these raises. Keene is like a CEO of a company
In no way is Keene like the CEO of a corporation--even though the City is a municipal corporation. If he were like the CEO of a corporation, it's hard to believe he would still be here--given the Arrillaga mess he got the City into.
What we need is a Charter change that will allow the voters to terminate his contract, as well as the City Council.
Keene does not deserve a raise--he deserves a pink slip!
Green Acres
on Dec 4, 2014 at 9:30 pm
on Dec 4, 2014 at 9:30 pm
Essentially, the city gained $8.3 million in additional revenue this year, and the Council decided to spend $4.3 million of it to remodel the ground floor only of City Hall --- then gave raises for managers.
Registered user
College Terrace
on Dec 4, 2014 at 11:12 pm
Registered user
on Dec 4, 2014 at 11:12 pm
No doubt salary administration for City employees, particularly those in management, is a complicated matter. Even so, a healthy raise following a highly critical Grand Jury report suggests that there's not going to be any accountability for that.
The comments about Jaime Rodriguez, if accurate, warrant explanation. I asked a question of him in early October and sent a follow-up inquiry later that month but still have not received an answer. I tried to get the information I needed from the City's website but the relevant pages haven't been updated for years. I don't think the issue is whether he has other jobs or companies; rather, it is whether he is doing his City job well. If my experience is typical he certainly shouldn't get high marks for responsiveness.
Registered user
Embarcadero Oaks/Leland
on Dec 5, 2014 at 9:35 am
Registered user
on Dec 5, 2014 at 9:35 am
I echo what Annette said. It's high time we get some answers about Rodriquez who according to the document linked above gets more than $80 an hour, not counting benefits, pensions, etc.
Registered user
Mountain View
on Dec 5, 2014 at 9:42 am
Registered user
on Dec 5, 2014 at 9:42 am
[Post removed.]
Crescent Park
on Dec 5, 2014 at 10:07 am
on Dec 5, 2014 at 10:07 am
As to our City Manager James Keene, let us not overlook the additional $50,000.00 per year that he receives in a special deferred compensation account under IRS section 401a "government money account".
This is authorized in his original employment contract - as negotiated by Larry Klein - and creates a separate additional account "off the books" wherein the City deposits the money into a special fund for Keene's benefit without it coming through his paycheck or showing up on his W2.
This is all above and beyond his regular salary, PERS retirement, and standard deferred comp.
It's all completely legal - but not exactly "transparent". Just a tad bit of irony and hypocrisy there, eh?
Doubters can research this for themselves by getting a copy of Keene's employment contract from the City Clerk's Office. It is a public document after all.
Crescent Park
on Dec 5, 2014 at 2:08 pm
on Dec 5, 2014 at 2:08 pm
Mr Rodriguez is completely non responsive to residents emails and phone calls. And, even if he responds to an email, he doesn't answer the question you asked in the email. [Portion removed.] He tries to suppress information to the public so he won't be scrutinized or questioned.
Registered user
Embarcadero Oaks/Leland
on Dec 5, 2014 at 2:35 pm
Registered user
on Dec 5, 2014 at 2:35 pm
Totally agree with Just Wondering re Mr. Rodriquez's lack of repsonsiveness I too am still waiting for his responses to polite emails I sent in September of this year and two years ago. He seems to have his email permanently set to "OUT OF THE OFFICE." Diana Diamond has repeatedly reported that he refuses to answer her questions and is above responding to pesky reporters, residents, taxpayers. etc.
Perhaps Mr. Keene or Mr. Rodriquez's manager could look into this? Perhaps the new City Council will be less tolerant?
Community Center
on Dec 5, 2014 at 8:52 pm
on Dec 5, 2014 at 8:52 pm
Is the logic here that when revenues are up, 'managers' get a raise? I don't recall 'managers' ever getting a pay cut when revenues go down. This makes no sense, especially considering the city manager has presided some pretty colossal screw ups that cost the city millions, like the Mitchell Park Library fiasco that's still not done, and lets not forget the $4M job in city hall that started out as something trivial, and that land 'deal' next to Foothills Park that a Grand Jury pretty should have labeled a criminal fraud! A raise for that??
How about a pink slip for the city manager. He's NOT worth his excessive pay and benefits package, the city is NOT being served.
Another Palo Alto neighborhood
on Dec 5, 2014 at 10:19 pm
on Dec 5, 2014 at 10:19 pm
We are experiencing a governmental crisis in Palo Alto. But we have a new Council about to be seated. That is encouraging but the vote count
for the 5th seat between Wohlbach and Kuo is being questioned so to clear
the air and put this Council on the firmest possible footing going forward
to deal with the problems we are facing a runoff election should be
held between those two candidates as soon as possible.
Crescent Park
on Dec 6, 2014 at 5:07 pm
on Dec 6, 2014 at 5:07 pm
Sure, I'm fine with the big-shots of Palo Alto voting to raise their own salaries
... just as soon as they do something to deserve it? Sorry, if Palo Alto was a restaurant instead of my hometown I'd be hard-pressed to want to leave a tip for what I'm getting ... aside from an city that doesn't live up to its image as a Silicon Valley center of innovation. Seriously City managers ... why don't you do something to deserve a raise?
Crescent Park
on Dec 6, 2014 at 5:07 pm
on Dec 6, 2014 at 5:07 pm
Sure, I'm fine with the big-shots of Palo Alto voting to raise their own salaries
... just as soon as they do something to deserve it? Sorry, if Palo Alto was a restaurant instead of my hometown I'd be hard-pressed to want to leave a tip for what I'm getting ... aside from an city that doesn't live up to its image as a Silicon Valley center of innovation. Seriously City managers ... why don't you do something to deserve a raise?
Registered user
Embarcadero Oaks/Leland
on Dec 7, 2014 at 5:39 pm
Registered user
on Dec 7, 2014 at 5:39 pm
Here are some useful salary comparisons although the PA salaries do NOT include or break out "other pay" like the other cities so those figures are unknown.
Our city manager's new salary will be $275,353 (??? other pay) vs $244,848 (or $225,418 with other pay) in Mountain View and $233,476 (or $250,583 with other pay) in Redwood City.
City attorney: Palo Alto $246,688 (other pay ??) vs Mountain View $220,439 or $237,477extra pay) and Redwood City $215,351/$242,024 extra.
Chief Transportation Jaime Rodriquez gets a raise from $147,337 to $153,967 "plus extra pay and benefits," a figure that's unknown.
What is "extra pay"? How much "extra pay" are these folks getting? Do highly paid officials still get over-time? If so, why?