Tuesday, May 15, 2007 | While most city of San Diego employees have seen their pay frozen or raised only slightly since financial turmoil hit the government, Mayor Jerry Sanders is endorsing a pay hike for some in the city’s redevelopment staff.
For the second time in as many years, Sanders has included in his budget recommendations by two redevelopment boards to boost the salaries of their employees. At the Southeastern Economic Development Corp., employee pay is proposed to increase by 30 percent for the 2008 fiscal year. The Centre City Development Corp.’s employees are budgeted to receive an average raise of 3 percent.
A Redeveloping Issue
City officials, including Sanders, have tried in recent years to rein in payroll costs while starting down a billion-dollar pension deficit. Street sweepers, fire fighters, librarians and other city workers have had to pay a greater share of their retirement costs while seeing their pay frozen since 2005. Police officers were able to win a raise of at least 8 percent for next year in an effort to stem the rapid flight of cops to better-paying agencies.
However, Sanders has not held the workforces at SEDC and CCDC to the same standard. He argues that the specialized talents employed by the agencies come at a premium that resembles private industry more closely than government work.
“These are agencies that were established to provide professional services at a level comparable with the private sector,” Sanders spokesman Fred Sainz said. “Tying them in with a government salary would negatively impact their ability to recruit those professionals.”
Past city councils created SEDC and CCDC to manage and strategize the redevelopment efforts in San Diego’s southeastern neighborhoods and downtown, respectively. The two bureaus harvest enormous amounts of property tax revenue that can only be used for construction projects or their own administration, but not for regular city services. For example, redevelopment revenue can be spent on building a fire station, but not for staffing it with firefighters.
Despite the separation of redevelopment funds from the city’s general fund, council members last year didn’t distinguish redevelopment employees from city workers in salary discussions. The City Council serves as the board for the San Diego Redevelopment Agency, allowing it final approval over all recommendations the CCDC and SEDC boards make.
Last year, the council decided to buck Sanders’ recommended pay increases in redevelopment, noting that the pay freeze being felt by the city’s 11,000-employee workforce should be extended to all of the workers affiliated with the city. CCDC was poised to receive a 7 percent pay hike in Sanders’ budget last year, and some SEDC officials were considered for a nearly 4 percent raise.
This year, SEDC wants to make one part-time employee a full-time staff member. However, even when factoring out that additional employee, the board asked that salaries increase by 30 percent in the wake of a salary survey.
CCDC wants to add four positions. Two new employees would be hired to focus on developing parks downtown. The other prospective hires include an administrative assistant and an information technology manager. Aside from those new positions, CCDC’s budget would also include a 3 percent salary raise.
The council could be poised to offer the same disapproval as last year, especially after a drawn-out battle between Sanders and some council members over firefighter pay.
Sanders noted that recruitment and retention within the Fire-Rescue Department’s ranks remained strong and that it was important to hold the line on salaries in order to improve the city’s financial condition. A coalition of council members, led by Council President Scott Peters, lamented that the firefighters had not received a pay raise since the 2003 Cedar Fire, which seared the city’s northeastern neighborhoods.
“I don’t think, given the financial situation our city is in, that we can afford financially or for appearance’s sake to raise salaries by more than 30 percent while not providing any sort of relief for others such as firefighters,” said Councilwoman Donna Frye, who supported the firefighter pay freeze.
Independent Budget Analyst Andrea Tevlin, the council’s adviser, called the SEDC raise “excessive.” She recommended that the council consider a policy that would link redevelopment salaries to those of other city employees.
Currently, the increases are based on merit, a method that Sanders prefers because it factors an employee’s performance into his or her pay. By allowing for incentives, a worker can be motivated to help an organization succeed, Sainz said.
“In general, the mayor supports the concept of bonuses,” Sainz said. “It’s a tried and true concept in a capitalistic economy where they perform for what’s in it for them.”
CCDC President Nancy Graham turned heads in January when the CCDC board granted her a $65,000 raise on top of her $235,000 base salary. Details surrounding the decision to award the bonus have not been released.
Graham was unavailable for comment, CCDC spokespeople said. Calls placed to SEDC were not returned.
Lani Lutar, executive director of the San Diego County Taxpayers Association, said that merit-based pay is a better method for compensating the redevelopment staff because it encourages employees to be more accountable for their agency’s success. She said the concept could also work within the city’s rank-and-file too, as long as it was made contingent on the government’s financial condition.
“I absolutely think there should be incentive-based pay, but it still needs to be based on what the city can afford,” Lutar said.