In his last two “Piedmontage” columns in the Piedmont Post, Councilmember Jeff Wieler argues that the City has solved the problem of employee benefit costs and that City finances are in good shape. He criticizes those who see the issue otherwise as “glass half-empty” types. Sadly, Jeff is ignoring some critical facts:
• The new City budget is up by $389,000, and 94% of that growth is due to increases in the cost of employee benefits. Overall, benefit costs are up by 6%, but 12% for the police. Benefits are at an all-time 26% of the total City budget. Every $100 of salary is accompanied by almost $60 of benefits.
• The recent report by the City’s Budget Advisory and Financial Planning Committee estimates that the unfunded liability for employee future benefits is about $40 million, which is twice the City’s annual budget. This comes to about $400,000 for every current City employee, an amount that would shatter Jeff’s metaphorical glass. Or about $10,000 for every household in town.
Jeff asserts that the City did not go to the current high benefits until 2008. In reality, the City committed to them in 2003 and proposed to double the parcel tax in 2004 to cover the costs. That doubling [of the parcel tax] was turned down by voters, but the benefit commitments went ahead anyway.
Jeff also asserts that critics of excessive benefits want City employees to work for nothing, which is absolute nonsense. But given that Piedmont’s benefits are among the richest in the state, it is not unreasonable to expect employees to cover future cost increases.
Jeff’s point is that the City has done all it can to control benefits and we need to renew the parcel tax to keep the City budget healthy. Then, predictably, he asserts that failure of the parcel tax vote will cost the City its 3-minute ambulance response time. I’m not arguing against the parcel tax, but it has nothing to do with the 3-minute response – that is entirely a function of City geography, boundaries and the location of the fire station.
But one could conclude that if the City truly controlled its benefit costs, it might be able to reduce the parcel tax. That’s a glass half-full I could drink to.
2011 Municipal Tax Review Committee
Editors Note: The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association.