San Juan Capistrano

 Comp Gone Wild

By Kim Lefner

No wonder SJC’s water costs are high. As the Utilities Department Employee Compensation chart indicates (see inset), San Juan taxpayers last year paid 18 Utilities Department employees more than 2.2 million dollars for wages and benefits.

The health insurance costs are nearly $300,000 per year for these 18 Utilities Department employees. That amounts to 23% of each employee’s salary. SJC taxpayers pay 100% of the employee AND their families’ health/dental insurance benefits - for the highest, most lavish benefit plan. A City memo indicates that until recently, if an employee chose an HMO instead of a PPO, they could get the difference back in cash. 

That cost doesn’t include the employee retirement pension benefits which amount to 35% of their salaries. Don’t get me wrong, good employees deserve a good retirement but at this rate, SJC residents will be bankrupt. How much are you able to contribute to your retirement pension (assuming you even have one)? Most corporations have slashed their employee’s retirement contributions to 6%. Our city’s is 35%. This might explain why our town’s unfunded pension liability is reportedly in the tens of millions of dollars. As is the case with most financial reporting in our city, the exact figure of our unfunded pension liability is difficult to determine; I’ve heard amounts ranging from 25 to 48 million dollars. And that’s not all. Between overtime
and undefined “other pay” in 2013, these 18 employees were paid an additional $403,393. SJC employees I question why a management employee is in a position to earn “overtime” at all, considering that private sector management employees are typically salaried and therefore not eligible for overtime pay.

Speaking of management employees, the inset chart for the 2012 compensation of our Executive Management in SJC also helps to explain why our town is so far in debt.

The employees are now engaged in salary negotiations with the City. Although the negotiations are not open to the public, I’m guessing that they are asking for increases, not decreases, to their compensation and/or benefits.

So what is the solution to run-away wage and benefit costs?

One solution is to encourage a new City Council majority in November to hire consultants who are responsible for paying for their own benefits, instead of maintaining Regular Full Time Employees. The City of Rancho Santa Margarita for example, had 23 (Regular) Full Time Employees and 68 Contract (full time) Employees in 2012. Their annual payroll that year was 1.895 million dollars - nearly half a million dollars less than the payroll just for our Utilities Department alone. And theirs is a larger town with a population of approximately 48,000. Not surprisingly, their water rates are approximately 40% lower than ours.

Other cities have successfully gone the contracted employee route at a cost-savings to the taxpayers. There is no reason other than a lack of will by the City Council majority, for San Juan to do the same. Please think about that next time you pay your water bill.

Have questions or comments for your City Council members? Email them c/o the City Clerk at:

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