Guest Commentary: Effects of Excessive Increases in City of Davis Employee Compensation

Part 2 – The Rich Get Richer!

Compensation to the Top 10% Highest Paid City of Davis Employees has Increased at a Far Faster Rate then Increases to the Lowest Paid City Employees and, for Upper Management and Fire Department Personnel, it is Much Higher than Comparable Compensation Levels in Woodland

by Alan Pryor

On October 1, the author published Part 1 of a 2-part series showing how City of Davis’ employee total compensation levels rose far in excess of inflation over the past decade. It further showed the extremely adverse long-term impacts this has had on our City’s budget and the shortfalls that have occurred as a result.

This Part 2 in this series of articles looks at how these excessive compensation increases have favored top City management and Fire Department personnel while salary increases given to lower paid employees have more modestly kept pace with inflation. Further comparisons are made between total compensation levels in Davis vs Woodland showing how upper management in the City of Davis receives far greater compensation than their counterparts in Woodland while functionally performing the exact same duties.

FORWARD

Part 1 of this series of articles on employee compensation in the City of Davis looked at increases in annual compensation given to City of Davis employees from 2011 through 2021. These annual increases were then compared to annual increases that would have been given if the increases were instead limited to a standard government-calculated inflation rate index; the Bay Area Urban Wage Earners & Clerical Workers Consumer Price Index (the “Bay Area CPI”). The differences between compensation that would have otherwise been paid were then used to determine the impacts these raises had on the City budget over the ten-year period (see here).

Average annual increases in compensation, including both pay and benefits, were far in excess of the inflation rate during this period of time resulting in an average total compensation (Pay and Benefits) paid to full-time, year-round City employees of $176,949 in 2021. Had total compensation paid to the City employees been held to the annual rate of inflation each year during the 2012-2021 time period, the average total compensation paid to City employees would have instead been $129,262.

These excessive raises in excess of the inflation rate have resulted in cumulative increased costs to the City totaling $69,933,505 from 2012 to 2021. These monies could have otherwise been beneficially used to provide the infrastructure maintenance the City Council claims they are unable to afford.

Further highlights from that analysis in Part 1 are presented in Appendix B to this article.

1. Comparison of Total Employee Compensation for Highest and Lowest Paid City Employees in 2021

 As reported in Part 1 of this series, average total compensation paid to all City of Davis full-time, year-round employees (303 employees in 2021) was $176,949 in 2021.

 However, there was a dramatic difference between the average total compensation paid to the highest 10% of paid City of Davis employees compared to the lowest 10% of paid employees. The average total compensation (Pay and Benefits) paid to the 10% highest paid full-time, year-round City employees in 2021 (30 employees) was $332,034 while the average total compensation paid to the lowest 10% of paid employees was $88,793 (see table below).

Much of the compensation paid to the highest 10% paid employees was to Fire and Police department personnel. The average total compensation paid to the 10 highest paid Fire Department employees was $385,034 and the average total compensation paid to the 10 highest paid Police Department employees was $304,653 as also shown in the following graph.

As further shown in Appendix A – List of Top 10% Highest Paid Employees in the City of Davis in 2021, of the 30 employees in that list 15 are Fire Department personnel and 10 are Police Department personnel. The remaining 5 employees in the list of the 30 highest paid City of Davis employees are the City Manager, the two Assistant City Managers, and the two Directors of Public Works.

Of the 10 highest paid full-time, year-round City employees in 2021, seven are Fire Department personnel, 2 are police officers, and the remaining employee on the list of Top 10 highest paid employees in the City of Davis is the City Manager.

2. Comparison of Annual Increases in Total Compensation Granted to Highest and Lowest Paid Employees from 2011 – 2021 by Category

Substantially larger average increases in annual total compensation over the 7-year period from 2014-2021 were given to the highest 10% of paid employees compared to average increases in total compensation given to the lowest 10% of paid employees.

As shown in the following tables, the average increase in total compensation given to the highest 10% of paid employees was 7.4%. This compares with the average increase in total compensation given to the lowest 10% of paid employees which was only 5.29%. Both of these average rate of increases in total compensation substantially exceeded the Bay Area CPI average annual increase of 3% over that 7-year period.

3. Comparison of Employee Compensation Between the City of Davis vs City of Woodland in 2021

Woodland is the nearest City of comparable size to Davis for which comparisons can be reasonably made to gauge the overall level of compensation paid to Davis City employees relative to other cities. Following are statistics for Davis and Woodland as to population, number of full-time, year-round City employees, mean compensation paid to full-time, year-round employees, total City payroll, and the cost of this payroll per City resident in 2021

The City of Davis has a population 8.8% greater than the City of Woodland but has 17.9% greater full-time City employees and a total annual employee compensation that is 24.7% greater than the City of Woodland. This is reflective of both the comparatively greater number of full-time employees in Davis and the higher average total compensation paid to the Davis employees.

This results in a Total City Employee Compensation per Resident of $888 in Davis vs. $775 in Woodland. One might expect that the City of Davis higher employee costs per resident would result in a greater level of services provided in Davis but this is certainly not reflected in the condition of our roads which objectively have an overall worse condition than in Woodland.

Mean total compensation levels were slightly greater in the City of Woodland compared to the City of Davis in 2021 despite the fact that, as shown below, average total compensation paid to City of Woodland employees is less than that paid to City of Davis employees. This is because larger compensation is made to the highest paid City of Davis employees including public safety personnel as shown in the following table and graph.

This above table shows demonstrates that City of Davis employees are compensated higher than City of Woodland employees especially in the upper levels of management and the fire department.

The average total compensation of all full-time City of Davis employees is employees is 5.8% greater than the average of all full-time City of Woodland employees. The total compensation paid to the Top 10 highest paid Davis Police Department personnel is 4.8% greater than the compensation paid to the comparable Top 10 highest paid Police Department personnel in Woodland. The average compensation paid to the lowest paid 10% of workers in Davis is 2.3% greater than that paid to the lowest 10% of paid employees in Woodland.

The largest differences between compensation paid in the two cities is between the total compensation paid to the Top 10 Paid Fire Department personnel in Davis which is almost 39% greater than the Top 10 Paid Fire Department personnel in Woodland. The average top 10 highest paid Fire Department personnel in Davis receives more than $107,000 in total compensation greater than than the Top 10 highest paid Fire Department counterparts in the Woodland Fire Department. This disparity results in excess of $1,000,000 per year paid just for these 10 highest paid Davis Fire Department personnel.

The question that begs to be asked is, “Do these Top 10 paid Fire Department personnel in Davis provide $1,000,000 more in value of services to the City of Davis than the Top 10 Paid Fire Department personnel in Woodland?”

This pattern of higher total compensation paid the City of Davis upper management and Fire Department personnel is also illustrated by the following table and graph which shows direct comparison between the highest ranking upper management and the Police and Fire Chiefs in each City.

This shows Davis key employees are paid far higher across the board than their counterparts in Woodland who have functionally identical job descriptions and/or titles.

Of course these huge excesses paid to senior City of Davis upper management and fire department personnel compared to Woodland employees generate a series of obvious questions that should be answered:

1. Is our City Manger who earns $468,044 in total compensation worth 16% more than his counterpart in Woodland?”,

2. Is our Fire Chief in Davis who earned a walloping $517,924 in total compensation worth 44% more than the Fire Chief in Woodland?

3. Are our two Assistant City Mangers worth between 9.7% and 14% more than their comparable positions paid in Woodland and are our two Public Works Directors worth between 6.4 and 20% more than the two highest paid Public Works employees on Woodland?

I’m guessing our City Council cannot provide satisfactory answers to any of these questions.

APPENDIX A – List of Top 10% Highest Paid Employees in the City of Davis in 2021

Following is the list of the top 10% highest paid employees in the City of Davis for 2021.

Of these 30 employees, 15 are Fire Department personnel and 10 are Police Department personnel. The remaining 5 employees in the 30 highest paid city employees are the City Manager, the two Assistant City Managers, and the two Directors of Public Works.

Of the 10 highest paid full-time, year-round City employees, seven are Fire Department personnel, 2 are police officers, and the remaining employee is the City Manager.

APPENDIX B

Summary of Part 1 – Article on City of Davis Employee Compensation Increases Through 2021

On October 1, the author published Part 1 of a 2-part series investigating how overall City of Davis’ employee compensation levels rose over the past decade far in excess of inflation and the extremely adverse impacts this has had on our City’s budget as a result.

That analysis looked at raises annual compensation (both Pay and Benefits) given to City of Davis employees from 2011 through 2021 and compared them to what would have been given if the raises were instead limited by a standard government-calculated inflation rate index; the Bay Area Urban Wage Earners & Clerical Workers Consumer Price Index (the “Bay Area CPI”). The differences were then used to determine the impacts these raises had on the City budget (see here).

These excessive raises have resulted in increased costs to the City totaling tens of millions of dollars that could have otherwise been beneficially used to provide the infrastructure maintenance the City Council claims they are unable to afford. The following are highlights from that analysis.

Summary of Increases in Total Compensation (Pay and Benefits)

That article disclosed that the actual average total compensation (Pay and Benefits) in 2021 for City of Davis full-time, employees was $176,949. This is an 8.4% increase from 2020 and far exceeds the annual rate of inflation of 4.1% in 2021 as determined by the US Bureau of Labor Statistics for Bay Area Urban Wage Earners & Clerical Workers (“Bay Area CPI “- see https://data.bls.gov/timeseries/CWURS49BSA0).

The average increase in total annual compensation (Pay and Benefits) for City of Davis full-time employees was reported to be 6.3% per year over the decade from 2011 through 2021.  This is more than twice the average annual rate of inflation of 2.8% during the same period as determined by the Bay Area CPI.

If annual total compensation increases to full-time employees over that 10-year period had instead been limited to the Bay Area CPI rate of inflation from 2011 to 2021 (i.e. 2.8%), the average total compensation otherwise received by full-time City of Davis employees in 2021 would have been $129,262 – or about 26.9% less than the $176,949 in average total compensation actually received in 2021.

Summary of Increases in Pay Compensation (without Benefits)

Similarly, the actual average annual Pay (without Benefits) paid to City of Davis full-time employees in 2021 was $114,572. This is a 6.4% increase from 2020. The average increase in annual Pay (without Benefits) for City of Davis full-time employees has been 4.8% per year from 2011 through 2021 compared to the average annual rate of inflation of 2.8% during the same period as determined by the Bay Area CPI.

If annual Pay increases to full-time employees had been limited to the Bay Area CPI rate of inflation from 2011 to 2021 of 2.8%, the average Pay otherwise received by FT City of Davis employees in 2021 would have instead been $96,228 – or about 16.1% less than the $114,572 average Pay actually received.

These differences in compensation rate increases are shown in the following 2 graphs:

Summary of Impact of the Excessive FT Employee Compensation on the City’s Budget

The annual differences (i.e. payroll savings) between the actual total Pay and Benefits paid by the City to all full-time employees from 2012 through 2021 and that which would have been paid if annual increases had instead been held to the Bay Area CPI is very substantial and ranges from $3.645 Million in 2015 to $14.449 Million in 2021.

On a cumulative basis, the City has paid in excess of almost $69 Million more to full-time employees in Pay and Benefits from 2012 through 2021 compared to if annual total compensation increases had otherwise been held to increases based on the Bay Area CPI.  This is shown in the following graph

That additional $69 million could have been very beneficially used in the intervening years to resurface many additional miles of the Davis streets and bike paths in most need of repair while still providing adequate and fair annual increases in employee compensation to match inflationary pressures on their costs of living.

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