The City of Stanton contracts with Orange County for public safety services. Like many cities in Orange County, and in an arrangement that is typical of many small cities in California, it makes financial sense for the city to pay the county in exchange for an allocation of police and firefighters who protect the citizens and property of their town. And every year, that fee is increased by 3%.
During 2014, Stanton paid $11.2 million for public safety services. For this, they secured the services of 15 firefighters and 33 sheriffs, although it is not clear how many of those positions were sworn firefighters or sheriffs or support personnel, or whether some of those positions were part-time or overlapped with other areas.
What we can determine with reasonable accuracy is the average cost for pay and benefits for Orange County’s full-time sworn officers and firefighters. Using data downloaded from the California state controller’s Government Compensation website, individual payroll records can be analyzed as far back as 2011. Here are the pay and benefits for Orange County’s sworn sheriff’s in 2011, and 2014:
Average Pay & Benefits, Orange County Sheriffs, 2011 and 2014
Full-time, “3@50” and “3@55” Officers
And here are the pay and benefits for Orange County’s sworn firefighters in 2011, and 2014:
Average Pay & Benefits, Orange County Firefighters, 2011 and 2014
Full-time, “3@50” and “3@55” Officers
If you don’t study public sector compensation, these numbers may come as a surprise. But they’re much the same throughout California. Firefighters nearly always make significantly more than police or sheriffs, despite the fact that while often overstated, it is challenging to recruit police, while firefighter positions routinely attract hundreds if not thousands of applicants for every opening.
While overtime constitutes a significant proportion of firefighter pay, it should be noted that taking into account vacation (but not sick leave) veteran firefighters only work two 24-hour shifts per week before earning overtime pay. Calculating based on time-and-a-half pay during overtime, the numbers indicate that OC firefighters on average work not quite three 24-hour shifts per week.
The reason so much overtime is paid raises troubling financial issues. Using Orange County as an example, cities and counties make the decision to schedule so much overtime because the benefits overhead for a public safety employee, calculated by dividing the total benefits by the regular pay, is a staggering 82% for sheriffs and 87% for firefighters. Whether firefighters, for example, can sustain three 24-hour shifts vs. two per week without burnout is debatable. But it is completely rational on the part of cities and counties to pay time-and-a-half for overtime, which is only a 50% premium, when adding a new employee would immediately entail an 82% or 87% markup on their time.
Something noteworthy – given all of the reputed reforms to pension benefits over the past few years is the fact that in Orange County in 2014, the employer still paid $13,805 of the employee’s share of the individual sheriff’s pension contributions. For the firefighters, the numbers did drop dramatically, from an average “employer pick-up” of $10,165 in 2011 to $3,434 in 2014. And speaking of pension reforms, how many of Orange County’s full-time sworn sheriffs did the state controller report to have “3@55” pensions? 337 out of 1,698, or 20 percent. All of the rest still had “3@50” pensions. And the firefighters? Four. Out of 829. One half of one percent were “3@55,” the rest were still “3@50.”
The consequences of trying to fund “3@50” pensions, or “3@55” for that matter, given the automatic cost-of-living increases and the high final salaries upon which these formulas are calculated, are dire. According to its most recent financial statements (ref. OCERS Memorandum reg. 2014 CAFR page 12), Orange County’s pension system was only 69% funded with an unfunded liability of $5 billion. Properly funding these “3@50” and “3@55” pensions would easily require increasing the defined benefit contributions by 50%, i.e., the employee pension contribution would cost more than the employee’s regular pay.
No reasonable person disparages the courageous and vital work performed by public safety personnel. But it is a matter of fact, not opinion, that every local tax increase contemplated on every local ballot in every city and county in California is still not enough to cover the increasing contributions to the pension funds. In small towns like Stanton, the costs for public safety leave policymakers with few other options.
Given the degree of influence exercised over small town politicians by PACs controlled by public safety unions, reform may have to come from within. Perhaps making $200K per year in pay and benefits doesn’t seem that much anymore in California. After all, the median home price in Orange County is $647,000. So maybe instead of fighting for higher pay and benefits, government unions, who are the real the power behind the politicians, might fight to lower the cost-of-living. These unions might throw their political weight behind the competitive development of land, housing, energy, water, quarries, and infrastructure would lower the median home price. That would dramatically lower the cost of living in Orange County. Then again, that might also pop the asset bubble that keeps public employee pension funds marginally solvent.
But tough choices is part of what public service should be all about.
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Ed Ring is the president of the California Policy Center.