Cities’ specialty pay comes under scrutiny

By Claire Trageser and Ryann Grochowski | KPBS/inewsource Investigations Desk

Employees of the city of Chula Vista can earn an extra $100 a year if they pass a test showing they’re bilingual. Firefighters and police officers in Coronado get $775 and $850 a year, respectively, to spend on their uniforms. And National City police officers get an extra 7 hours of overtime a week for taking care of their police dogs.

These costs may not seem like much, but a new report from the San Diego County Taxpayers Association shows they add up — and are steadily increasing.

Data from the taxpayers association—which was independently verified by the inewsource and KPBS Investigations Desk —shows these types of “specialty pay” increased by 60 percent between 2000 and 2011 in 16 San Diego County cities. The report only looked at cities that belong to the California Public Employees Retirement System, or CalPERS.

During that 12-year period, those 16 cities spent $90 million on specialty pays.

Chris Cate, the interim president of SDCTA, said he’s calling attention to specialty pay because it’s included in the salary amount used to calculate a pension, leading to higher pension costs.

“You can obtain these extra things and essentially boost up salaries to a level that’s higher than you normally would have and have your pension based off that,” Cate said.

However, the taxpayers association couldn’t calculate the total amount that specialty pay contributes to pension costs. That would require specific information about all employees in the 16 cities, such as when they started working, what salary they received and how much specialty pay each earned. Cate said cities weren’t able to provide that level of detail because of changes over time to their payroll systems.

“It was difficult to look at what is the direct impact,” he said.

The city of San Diego was not included in the analysis because it has its own pension system and does not belong to CalPERS. However, San Diego offers specialty pay. A 2009 report in The San Diego Union-Tribune found that more than half the city’s employees collect some kind of specialty pay.

One example of specialty pay in San Diego is the so-called “scooter pay”— a bonus given to meter maids for driving the city’s small white parking enforcement vehicles. That practice was blasted by former City Councilman Carl DeMaio when he was running for mayor last year.

Lemon Grove also was not included in the analysis because it was not able to break down its specialty pay costs by year, according to the taxpayers association. The data for Del Mar, Encinitas, Imperial Beach, La Mesa and Vista was also incomplete (see sidebar).

Employees of San Diego County also receive this special pay. A 2011 inewsource analysis found county employees made more than $100 million in special benefits between 2007 and 2010.

Of the 16 cities SDCTA examined, Chula Vista spent the most on specialty pay during the study period: $20.6 million, or about $1.7 million a year. Chula Vista’s specialty pay also increased the most over the 12-year period, from about $800,000 in Fiscal Year 2000 to $2 million in Fiscal Year 2011. That includes an increase of almost $151,000 in bilingual pay for general employees and $455,000 in holiday pay for public safety employees.

Chula Vista Mayor Cheryl Cox said many of the specialty pays started several years ago during negotiations with unions. When the city can’t offer salary raises, it sometimes offers specialty pay instead.

“Our employees contribute to their own pensions, they’ve lost money because we can’t give them raises, so what can we do, we can give specialty pay,” she said.

Cox said Chula Vista is a bilingual city, so having employees who can speak to citizens is important. But, she said, human resources administers tests to employees to be sure they qualify for bilingual specialty pay.

“Credit should be given where credit’s due,” she added. “Chula Vista is operating under pension reform. We’ve done it. We did it when other cities were still chattering about it.”

And while Chula Vista gives out the most in specialty pay, it is also the second largest city in the county behind San Diego. It makes sense that cities with the most employees will spend the most on specialty pays.

To draw a more direct comparison between cities, the analysis calculated how specialty pay broke down by household.

Looking at the data this way, the average household in National City actually contributed more to specialty pay than the average household in the other 15 cities. In 2010, the average National City household paid $45.64 in taxes toward employees’ specialty pay. The average Chula Vista household paid $26 in 2010. Santee and Imperial Beach had the lowest average household costs, $1.55 per household, among the 16 cities.

But Leslie Deese, the city manager for National City, said offering specialty pay to only a select group of employees actually decreases costs. Without specialty pay, she said, the city would have to pay every employee in the same job category the same salary, even if they didn’t have additional skills like being bilingual or being trained to handle and care for a police dog. Specialty pay allows them to set the salary and then add extra pay for extra skills.

“We have some instances where we need individuals to perform a highly specialized skill, or have a certain type of license, and instead of paying everybody in that job classification at a rate of pay that would cover that, we carve out a specialty pay so only those individuals that are performing that specialized skill or have that specialized license get that pay,” she said.

But not all types of specialty pay are for special skills, Cate said. He pointed to things like a “tree crew premium” paid by Coronado and Escondido.

“They already pay employees to be in trees because that’s their job description,” he said. “If that’s part of their work schedule, then they can pay employees based on that.”

Janine Zuniga, a spokeswoman for the city of Coronado, says the city employs one tree trimmer and he receives this specialty pay, which totaled $1,017 in 2011. She said the pay resulted from union negotiations, and requires passing an International Society of Arboriculture certification exam on tree care.

Cate said the California Public Employees’ Pension Reform Act of 2013 proposed by Governor Jerry Brown was meant to limit pensionsto be based only on an employee’s regular pay, not specialty pay.

But CalPERS interpreted the law differently. While things like bonuses, overtime and  cash payouts for unused vacation or sick time are excluded from pension calculations, CalPERS concluded that specialty pay should still be included.

SDCTA plans to launch a letter-writing campaign to put public pressure on CalPERS to change its interpretation of the law, Cate said. It will also work around CalPERS and directly lobby local cities to renegotiate contracts to either get rid of specialty pay entirely or exclude it when calculating employee pensions.

But not all cities might be receptive to this idea. City leaders of both National City and Chula Vista said specialty pay is necessary to attract and keep good employees, and said the pay is a way to incentivize jobs that require extra time or are difficult to do.

“There’s a reason we carve those jobs out, to recognize them as important and pay accordingly to that,” Deese said. “We don’t just randomly provide that pay to just anyone in any given position.”

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Yearly Specialty Pay for CalPERS Cities, FY 2000 to FY 2011

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