The city’s human resources department will develop a formal compensation philosophy to guide labor negotiations after reviewing an independent audit of Santa Monica’s public employee salaries. The City Council also asked staff members to increase transparency online by breaking down how much employees are paid and their benefits.

The report by accounting firm Moss Adams found the city’s senior leadership makes about 15 percent more than the median when compared to peers: an average of $215,000 a year compared to $188,000 per year. The city’s average wages ranked seventh among eleven nearby cities. The study compared Santa Monica’s public worker benefits with Anaheim, Beverly Hills, Burbank, Culver City, El Segundo, Glendale, Inglewood, Pasadena, Redondo Beach, Santa Barbara and Torrance.

The new strategies to control rising staffing costs come after nearly three years of scrutiny by the Council’s Audit Subcommittee, a group of elected leaders and residents who oversaw the study by Moss Adams.

“This is probably the most comprehensive study of local government pay and benefits undertaken by any city in Southern California in the last decade,” said City Manager Rick Cole at Tuesday’s City Council meeting where Moss Adams presented their findings. “It is well beyond what most cities do.”

The study found Santa Monica has a higher workload and higher costs for many programs and services. For example, the City Attorney’s Office has a budget for 45 full-time employees, compared to an average of 19 among peer cities. Those employees write nearly 2,000 legal opinions a year, far more than the average of 347. It also received 82 lawsuits, compared to 19 lawsuits in the next highest city. The total operating cost for the City Attorney’s Office is $10.9 million, compared with an average of $7.3 million among peers.

“Santa Monica’s City Attorney’s Office manages a unique caseload including consumer protection and criminal litigation, using primarily in-house employees. Most other City Attorney offices do not handle these cases, and typically outsource prosecution,” the report said.

Cole said the 150-page report will provide a blueprint for making improvements and saving taxpayer money. Employee expenses make up about $332 million of Santa Monica’s $508 million budget. The report found Santa Monica had the most employees out of all the cities.

In fact, Santa Monica and Pasadena were the only two cities in the study that employed more than 2,000 people – 2,293 and 2,218 respectively. Mayor Pro-Tempore Gleam Davis said they the city employs many positions that are contracted by peer cities.

“We believe that people who are working in our city and do good work should get the good wages and good benefits that public service brings,” Davis said. Davis said the city should keep its progressive values in mind as it moves forward with hard economic decisions to control costs.

The study did not look at the major issue all eleven cities share – ballooning pension and healthcare costs as retired workers live longer. The Moss Adams report suggests the city establish specific targets for funding its pension liability. Last year, the city contributed $45 million toward its long-term unfunded pension obligations for staff members under CalPERS. Pension costs make up approximately seven percent of the City’s overall budget.

kate@smdp.com

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