After 'Frank' Exchange of Views, Santa Monica Citizen Committee Is Bid Farewell

By Niki Cervantes
Staff Writer

May 10, 2018 -- A first-ever ad hoc citizens committee that looked into costly pay and pensions at Santa Monica City Hall was bid farewell Tuesday, with the calls for action by some of its members rejected.

Some on the five-member residents panel had called for immediate wage and/or hiring freezes to pay a looming $461 million bill for unfunded pensions as the City Council accepted the findings and recommendations of an outside audit.

"The discussions were, as diplomats say, frank,” said City Manager Rick Cole.

Presented to the Council at its regular meeting, the compensation audit by Moss Adams included such broad suggestions as enhancing the “understanding of personnel costs by making this information readily accessible to the general public.”

It also called for creating a “compensation philosophy” and continuing "to take steps whenever possible to mitigate the financial threat that pension liability places on the City.”

The audit’s key findings, however, were more jarring ("Outside Audit of Employee Pay at Santa Monica City Hall Heads to Council," May 7, 2018).

Among them: Nearly all of the City’s departments, big and small, were far costlier to operate than those of peer cities throughout Southern California.

The audit determined 60 percent of the City employees -- particularly in management -- were compensated well above peer cities.

Auditors backed away from saying employee productivity was only “comparable” to peer cities, despite the higher pay.

Instead, the report’s authors added a caveat that they did not have enough information to come to a definitive conclusion about performance levels of the City’s workforce.

They also said workloads were heavier for Santa Monica City government employees.

Dominic Gomez, the former CEO of Movius Interactive and a member of the residents panel who wanted to stay on, stressed the need for quick action.

The cost of unfunded liabilities and pensions, he told the Council, “is approaching a half billion dollars.”

“It’s astonishing," Gomez said. "It’s really important to follow through with bold and decisive action. This debt will keep accelerating.”

Councilmember Gleam Davis attributed the high employee costs to the City's choice to perform the work in-house, instead of hiring contractors.

"There's no reason to panic," Davis said. "We're in pretty good shape."

Santa Monica City Hall has a longstanding reputation for paying some of the highest wages among California municipalities ("Santa Monica City Pay and Benefits Climb at Double the Inflation Rate, New Data Shows," May 2, 2017).

The chorus has grown louder lately, however, and with the 2018 elections on the horizon, the City’s Audit Subcommittee agreed to use Moss Adams for a deeper dive into the issue.

As an olive branch to critics, the City formed a seven-member ad hoc “compensation advisory committee” (appointed by Cole) to help determine the audit’s parameters and review the findings.

The Audit Subcommittee -- dominated by three council members -- sent the report, which was finalized last month, to the council for final action.

But but did not mention the recommendations of citizen panel members for a hiring/wage freeze or paying off the $461 million in unfunded liabilities by 2030.

(The City is paying down the debt over thirty years, with some money added annually as pre-payment).

Nor was there discussion Tuesday of re-constituting the citizen panel to continue working on the problem.

Tricia Crane, a frequent critic of City Hall spending, told the Council that residents are expressing “deep concern” about the unfunded liability since there is no entity, other than taxpayers, that can bail the City out .

“The community is watching,” said Crane, who heads the Northeast Neighbors Association. “Be decisive. Don’t kick the can down the road.”

During the meeting, Cole discussed establishing a new panel to look strictly at the unfunded liability problem.