Setting the Record Straight on Fire Contracts

We figured that the city would try to sell the public that this was a great deal for the city.  We should have figured that the Davis Enterprise would be a willing partner to this obfuscation.  However, we did not count on the magnitude of these efforts.

The Enterprise writes:

“Fire captains have a base salary range from $88,000 to $107,000 a year, while the Firefighter I salary ranges from $69,500 to $85,000 a year and a Firefighter II gets $76,500 to $93,000 a year, according to the city’s pay scale.”

However, those are a completely misleading figures and do not reflect reality.  In 2008, the FF1 position made roughly $75,000 in base pay.  However, there were only eight employees in the Firefighter I category.  Firefighter II, of which there were 28 employees, the bulk of the rank and file, made an average of $92,661.  And fire captain made just about $107,000.  So while they talk about the range of salaries, the average firefighter made at the maximum end of the range.  The range distorts and underrepresents the reality of the situation.

And those figures just represent salary.  But that does not figure in total compensation.  Under the terms of the new contract, this year, Firefighter II will make $137,981 in total compensation while the fire captain will make $155,913 in total compensation.  The reality is that public was handed numbers that might as well be fictitious and they distort the true magnitude of these salaries.

The Enterprise article continues:

“In addition to the salary decreases, the proposed contract caps the city’s contribution to employees’ CalPERS retirement and medical benefits. The city will only pay out 1.5 percent of total compensation – how much it costs to keep an employee on the payroll – in the 2010-2011 fiscal year and 2 percent in 2011-2012.”

This is likely a typo because it should accurately read, “the city will only pay out 1.5 percent of the total compensation INCREASE for the years 2010-11 and 2011-12.”  Big difference there.

The Enterprise article:

“A vesting period also has been added, requiring fire employees to work for the city at least five years prior to retirement to receive 50 percent of retiree medical benefits, and at least 20 years to get 100 percent of the benefits.

The city currently pays lifetime benefits in full, no matter how long a firefighter has been employed by the city.”

The Enterprise reports this, but never asks how long the workers work and whether this will achieve any actual savings.

The Enterprise continues:

“Additionally, the proposed contract includes changes to the city’s long-standing and often-criticized ‘cafeteria cash out’ option, where employees can pocket unused health benefit funds.

Those who are covered under a spouse’s health plan can cash out up to $17,700 a year in unused funds.

The new contract seeks to reduce that take-home amount by 20 percent – fire employees will only be able to cash out 80 percent if they have coverage under another plan.”

What they do not report is that the Cafeteria cashout remains between $15,110 this year, and $16,889, which can be taken home over and above salary if employee has a spouse with insurance.  It also does not report that Councilmember Sue Greenwald and Lamar Heystek fought to reduce it by a far larger margin but were outvoted by the council majority in a 3-2 vote. 

The Enterprise quotes Sue Greenwald as supporting reducing the cash-out to 25 percent rather than the current 80% level that this contract awards.  The cash-out program alone costs the city $4 million a year.

The biggest problem here is not coming from the uncritical and questioning reporting from the Davis Enterprise, it is the obfuscation that comes from the city.

The Enterprise quotes Finance Director Paul Navazio.

“Navazio said the fire union agreement results in short-term savings that represent the group’s fair share toward achieving the assumed $1.25 million savings from labor contracts.

‘We feel pretty comfortable that the amount of savings that would accrue to the budget this year from the fire proposal meets – and actually exceeds – the fire union’s proportionate share of the general fund savings target built into this year’s budget,’ Navazio said in a phone interview Friday. ‘It stacks up really favorably on the short-term savings and we think it’s a significant start to looking at some of the long-term issues.'”

This gets to the heart of the problem.  The City estimates the contract will result in a total of $886,586 of savings when compared to original baseline budget projections for the next three years, a 4.23% overall reduction. For the current year alone, the savings represent a 4.19% reduction from the original MOU costs built into the 9-10 budget.

But those numbers do not make any sense.  They are using figures from the baseline rather than last year’s actual costs.  That is misleading at best. 

Councilmember Sue Greenwald said:

“If you look at the cost to the City each year to firefighter compensation, we have only saved an average of  $160,000 a year out of our current, unsustainable cost to the city of $6,636,000.  We have saved only $65,000 in year three.  These costs do not include the substantial overtime that we pay our firefighters.”

It is ironic because the staff report boasts:

“The salary terms in the contract represent actual decreases to existing salaries, rather than foregoing new salary increases and depicting them as decreases, as we have seen in a number of other cases with labor contracts cited in various news services.”

However, that 4.23% is not actual savings from existing salaries, it is a reduction in what they had projected to spend previously.  So on the one hand, they mock other jurisdictions for depicting non-cuts as cuts, but on the other, they have no problem throwing out the 4.23% reduction as a real number. 

The city staff is counting monies not spent yet that were projected to be spent as savings.  And then they are using it to argue that they are taking on their fair share, based on the council’s goal of reducing $1.25 million from employee compensation, a figure well below the five percent goal that Councilmember Heystek advocated.  That figure was supposed to represent actual savings not reduction from baseline projections in the future.

So once again the Enterprise gleefully leads the article by reporting:

“Davis firefighters have agreed to an approximate 4 percent pay cut per year through June 2012, saving the city an estimated $886,586 over the next 21?2 years.”

But again they never bother to attempt to understand what that number really means.

The public should be outraged on this, but how can they be when they are being fed misleading information from the city that is bolstered by uncritical and misleading reporting from the local paper.

—David M. Greenwald reporting