Tags: city council, city hall, city manager, compensation, paul arevalo

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It has been national news that you may well have heard by now. Headlines have been screaming about the compensation paid to employees and officials of local governments, and of the city of Bell, CA in particular.

That includes here in West Hollywood.  The most focus has been on the compensation for Weho’s City Manager, Paul Arevalo.  But we’ve been looking at some of the other pay ranges and were surprised to learn that almost every0ne at City Hall can earn more than $50,000 per year.  Further, the cost of wages and fringe benefits to City Hall employees has doubled in the last decade, seemingly in large part due to increases in compensation packages for individual employees.

Robert Rizzo, the former City Manager of Bell, CA

“Post Bell World”

The heightened scrutiny of cities everywhere comes after shocking compensation numbers were exposed for the nearby City of Bell, which is one of the poorest cities in Los Angeles County. Robert Rizzo, the City Manager, not only earned a base annual salary of more than $700,000, but he also had a package of other benefits that brought up the total compensation number to more than $1.5 million. Large salaries were also revealed for the police chief, assistant city manager, and several city council members.

The media is calling it a “post Bell world” for local – and even state – governments.  The Los Angeles Times broke the original story, and has done a number of follow up articles along with a compensation survey of city manager salaries for the 87 cities in Los Angeles County.  Governor Schwarzenegger began posting salaries of top State officials on a new website.

The LA Times survey revealed that  Paul Arevalo, Weho’s City Manager, is being paid annual compensation of $285,496.   Salary ranges for other city positions can be found on the City of West Hollywood website.

Paul Arevalo

“Paul Arevalo is worth every cent we pay him,” said Jeanne Dobrin, a fixture at city council meetings, to Weho News. “He does an excellent job. I think he’s being paid well and deserving of it.”

The Times survey puts Arevalo’s salary in the top five for city managers in the County of Los Angeles.  And that includes the outlandish $787,637 paid to Bell’s City Manager, appearing at the top of the list.

While West Hollywood and Arevalo do fall towards the top of the list, that isn’t exactly shocking.  It might be even more shocking to find Weho and Averalo anywhere towards the bottom part of the list.

But that’s only one way of looking at the numbers.  Another question is if city managers (and other employees) are simply paid too much in general. To some degree, that would be a problem outside the hands of the City of West Hollywood, as our city alone cannot control the wages in the overall market.

Chris Bray writes on his blog about Arevalo’s compensation, pointing out that his salary was $130,000 when he first was given the job 10 years ago. Bray argues that paying more than double the salary for the same job only 10 years later isn’t reasonable, and is based on surging revenue to the city during the real estate boom.

“Government officials argue that they have a tax revenue crisis, and need to raise taxes to fix it,” writes Bray. “They don’t. They have a spending crisis that has been exposed by the economy’s return to earth.”

Compensation for Individual Jobs

Is it only Arevalo who has seen his compensation more than double?  And are municipal wages artificially high on the Westside? What about West Hollywood’s wages compared to nearby cities?

Aside from interns, part time employees, and 2 recreation leader job titles, the current pay rate for every job title at City Hall can comfortably exceed $50,000 per year.  The average compensation rate for the remaining 119 positions listed comes in at $91,223 per year.

Even aquatics and recreation coordinator positions pay a minimum of $57,385 per year, and a maximum of $73,326.

The city in recent years has been trying to contain payroll costs though hiring freezes and reorganizing to eliminate some positions, but at the same time, the city says pay has been rising for individual employees in order to remain competitive with surrounding cities.

While the city may need to compete with nearby cities for specialized talent at higher levels, such as for planning staff, it should be able to hire entry level administrative talent from the general labor pool at large.

It appears that premium wages are being paid for even the most basic, entry level, non-specialized administrative position requiring 6 months of experience… even benchmarked against nearby Westside cities.  That job title pays a range of $42,911 to $54,832 per year in Weho.  The entry level administrative position for the City of Santa Monica pays $13.27 per hour, which works out to $27,601 per year.  At the City of Beverly Hills, the job pays $34,980 to $43,332 annually.

While it is quite a bit easier to benchmark an entry level position against others, a few other attempts were made with other titles.  The results seem to be pretty consistent in showing West Hollywood paying the highest wages in comparisons to Beverly Hills and Santa Monica.

The job of Accounting Technician pays $44,412 to $55,008 in Beverly Hills (requiring high school degree and 3 years experience) but $50,667 to $64,740 in West Hollywood (1 to 2 years experience + associates degree).  The position in Santa Monica may be Fiscal Staff Assistant II (requiring 3 years experience and an associates degree) paying $46,344 to $57,216 annually.

For the position of Accounting Manager, the pay is $83,436 to $103,656 in Beverly Hills for supervision of the department, compared to $116,281 to $153,041 in West Hollywood for what seems to be a similar, senior position.  The equivalent management position in Santa Monica may be called Financial Operations Manager, which is paid $110,868 to $136,872 annually.

In Beverly Hills, an Assistant Planner is paid $54,732.00 to $67,800. In West Hollywood, an Assistant Planner is paid $69,017 to $88,189, however they may have higher qualifications than an Assistant in Beverly Hills.  But Weho compensation is still higher than the next step up at Beverly Hills, an Associate Planner position that is paid $63,144 to $78,456. Santa Monica has a similar position of Assistant Planner that is listed at $66,372 to $81,948, but West Hollywood still squeaks out as the highest paid.

West Hollywood payroll and fringe benefit costs for 2000 through 2009 (actual), 2010 (budgeted), and 2011 to 2012 (proposed)

Growth in Wages and Fringe Benefits

Wages and fringe benefits paid by the City of West Hollywood were $12.9 million in 2000, $17.7 million in 2005, $26.6 million in 2009, and would rise to $28.1 million in the current proposed budget for 2012.

That means wage and benefit costs have doubled in the last decade.  Increases might partially be explained by an expansion of staff and services over this substantial period of the city’s existence, however the 2006/2008 city budget seems to show that headcount remained fairly static in the middle of this period, listing 199 jobs in 2001 and 201 in 2007.

On the other hand, there are quite a few references to increased costs being incurred for current jobs in order to remain competitive with surrounding cities.  And if those costs have doubled for the same number of people, that would mean that on a per employee basis, on average, wages and benefits have doubled as well.

Could this be the case? The budget documents seem very clear that the costs increases have been mostly on a per employee basis, at least since 2006.  And the pay rates listed on the City of West Hollywood’s website certainly do not seem low.

The most significant reasons for increases listed in the 2009/2010 budget update were a citywide classification and compensation study in June 2006 and moving to an enhanced retirement system in December of 2007.  The report says that the annual growth in costs for wages and fringe benefits had been 7.9% for the 10 years prior, and 9.9% for the five years leading up to the period.

The large $2.6 million increase between 2008 and 2009 was also mostly attributed to possibly the same benchmarking study that resulted in “adjustment to staff salaries so that West Hollywood would remain competitive with other Westside municipalities.”

The 2010 to 2012 proposed budget document states that it “includes a savings of approximately $1 million a year in wages and fringes based on the freezing of positions and reorganizing divisions as positions become vacant.”

That would seem to mean that spending growth on wages and benefits on a per employee basis has not slowed very much despite a lower rate of growth in overall spending.

Acknowledging the financial crisis and recession impacting the city, it states that “all City Departments were asked to review revenues to ensure all fees and fines are covering programmatic costs and are consistent with surrounding cities and to propose a 10% reduction in their overall General Fund expenditure budget.”

However, the statement continues, “Not all of the cuts considered by the Departments to meet the 10% goal are being proposed at this time. Some of the cuts not being proposed at this time are layoffs, furloughs, suspending cost of living increases for social service contracts, and reductions to public safety, social service programs, street and alley maintenance, dog waste stations and park hours.”