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Why San Francisco is in trouble – highly compensated city employees

64 points by bgentry 6y ago

freeone3000 6y ago
This article fails to make the point as to why this is a problem. You might as well make an article "Why Google is in trouble - 60,000 employees earned $150k+".
- mc32 6y ago
  Not really. Google isn’t saddled with retirement entitlements. Also Googles employees generate some of the highest revenues per staff in the industry. SF gets its revenues from its citizens via taxes. The employees don’t produce revenues themselves. They are cost centers. Cities by their nature, use regulatory capture to extract revenues. If googles revenues go down they cut staff. Cities rarely cut staff in line with budget decreases.
  - deleted 6y ago
    [deleted]
  - kneel 6y ago
    Corporate welfare is a problem. Why do cities offer tax benefits to these companies at the expense of their own residents? Ironic that SF is going broke with some of the richest companies ever residing here.
    - mc32 6y ago
      And it will get worse for cities trying to milk the system if more firms opt for remote work. They should pay a fair share but also cities should not see cos as their cash cow.
  - content_sesh 6y ago
    "Retirement entitlements"? You mean the pensions people have earned, with their labor? It's not a surprise, to anyone who thinks about it for more than 20 seconds that RN or firefighter is not, in fact, a revenue generating position for the city. But they're generally agreed to be necessary, so why should they not be paid a living wage?
    - emsy 6y ago
      Some might say they're... entitled to them.
    - mc32 6y ago
      No issues with common sense retirements —but some of these are 90% of pre-retirement salaries where people “retire” take their entitlements and work elsewhere after retirement making good money on top of their retirement.
      - freeone3000 6y ago
        Okay, so what?
        mc32 6y ago
        I want service out of my money that contributes to that pension. Make it 30 or 40 years like everyone else has to work.
        shaftway 6y ago
        I know a couple firefighters in the bay area and they definitely game this system. They'll work a typical salaried position for ~30 years, and then in their last year (or last couple years) they'll stuff as much overtime as they possibly can in, sometimes more than triple their regular salary. Pension is based on wages over the last year or two, so their pension payments skyrocket upwards. Managers know and are complicit in this, in solidarity with their coworkers. There's often peer pressure too; lower ranked staff are urged to not even request overtime so that it can all go to the near-retirees without a paper-trail of favoritism. It's not uncommon for >98% of overtime to go to the 2 or 3 people who are close to retirement. I'm all for a living wage for people in critical or permanent roles, but this is not that, and it's not fair. This is the opposite, driving pay down for newer recruits (because they can't request overtime), driving retirement benefits up (far above what was earned during the career), and costing the public in the process.
thatfrenchguy 6y ago
Do we want city employees to live in the city ? Because unless your family bought a house in the 60s, you probably want to earn $150k to live in the city.
- aphextron 6y ago
  >Because unless your family bought a house in the 60s, you probably want to earn $150k to live in the city. That's renting a 1 bedroom apartment money. To even dream of ever buying something and supporting a family you're talking $200k+.
  - konjin 6y ago
    200k? I know people on 600k total comp who have been stuck in a one bedroom flat for 4 years because of how many strings the money comes attached with.
  - bb88 6y ago
    I've heard that in the past before 2008, banks were willing to offer mortgages up to 3.5x income at 5 or 6% interest. With a fixed 3% rate, you could probably do a mortgage with 4x income. And a quick look shows there are not a lot of houses in the $600k range. Most decent homes are going to be in the $1M range.
adt2bt 6y ago
This reads like a clickbait article with an agenda. Also, who cares? SF is one of the most expensive cities in the world - it's probably fair to expect city employees to make a liveable wage in the city they serve.
- bb88 6y ago
  That gets to the point. Normally, as a city, you'd probably want your employees to live in the city that they service. If you don't live there, you're not going to care about hypodermic needles on the street as much. "Meh, it's San Francisco. Who cares?"
- kyleblarson 6y ago
  SF residents facing ever increasing taxes and an increasingly dilapidated and unsafe city likely care.
- supernova87a 6y ago
  Except that the city's negotiating abilities are so incompetent that these overtime $ costs (which in the past had guarantees like "required to ratchet up and remain the 2nd highest paid scale in the US") and expansion of employees numbers gets further baked into pension and debt costs far into the future. https://www.sfexaminer.com/news/why-muni-cant-find-good-drivers/ https://www.sfexaminer.com/news/why-muni-cant-find-good-driv... https://www.sfgate.com/bayarea/article/City-and-Muni-operators-agree-on-new-contract-5590634.php https://www.sfgate.com/bayarea/article/City-and-Muni-operato...
- content_sesh 6y ago
  It's breathless pearl clutching targeted at Forbes readers who would be scandalized that their perceived inferiors are making what amounts to a moderately livable wage in one of the most expensive places on earth. As a quick example, here we can see the author making an extremely weird argument that the guy running the agency that serves the homeless in the city is somehow doing a bad job because there are more homeless people now than there were in 2016. > In 2016, the city added a new agency to serve its homeless residents. By 2019, the department had 148 employees, and 53 of them made more than $100,000. > The director, Jeff Kosinsky, brought home up to $238,182 annually, but each year the city’s homeless population continued to grow.
woke_neolib 6y ago
It's wonderful that city employees make competitive salaries. I wish they were held accountable when they failed to do their job.
- panzagl 6y ago
  I have no problem with most of the base salaries, but the amount of overtime screams either inefficiency or corruption.
konjin 6y ago
A family of 4 is low income on $110k. SF and but-fuck-nowhere West Virginia are not places to compare on cost of living.
KoftaBob 6y ago
Until California overhauls their ridiculous Prop 13 artificially keeping property taxes low, these arguments blaming budget shortfalls on salaries will continue to be a moot point. Yes, there can be rampant overtime abuse by government workers to get these inflated salaries, that's a large problem in NYC transit agencies. However, the overt limiting of city revenue due to Prop 13 is a major cause of budget shortfalls that's looking them right in the face. If someone is in serious debt while at the same time going out of their way to voluntarily take a lower salary, does it make sense to blame it on their expensive internet bill, or tackle the salary first?
- egberts1 6y ago
  There’s a reason why the citizens of California passed Prop 13 in the 1970s. Or did we conveniently forget?
- syspec 6y ago
  That's true if it wasn't for Prop 13, the sherif would of definitely not made 350k in overtime this year. Very good point
vcolano 6y ago
The issue I perceive with this is that all of these wages seem to be extremely inflated compared to the job market for similar roles. Are private hospitals in SF paying RNs almost 300k a year? Are the FB shuttle shuttle drivers or delivery drivers in industry making 108k a year? I doubt it.
- tootahe45 6y ago
  It's a common problem actually. Private shuttle companies complain they are unable to compete with all the benefits etc. Government monopolies are the absolute worst for this reason.
pp19dd 6y ago
Having worked on stories like these, I'd caution anyone to examine some of the overtime outliers before responding to them. Often enough the highest visible overtimes on a city budget are social functions, like a sheriff who provides honorary protective detail to stadiums where they are later bizarrely reimbused through that mechanism. Below that and down-to the median overtimes usually speak for themselves and draw a fair amount of criticism, but otherwise, the vast combined aggregate under the median points out that we don't pay people enough for the jobs they do, and we can't hire enough of them at that price.
- supernova87a 6y ago
  It would be just some one-time outliers, except there are real problems where overtime is counted towards retirement, and workers actively inflate their last years just to bump up their pensions and retirement pay. And none of that kind of thing is protected against in the contracts. So the city and taxpayers are being screwed.
  - pp19dd 6y ago
    The last-three-years retirement bowling lanes you're describing need a US-wide overhaul, but it's definitely not an uncommon occurrence in public service admin anywhere in the states, on a City, State and Federal level. But the overtime budget breakdown for SF (City and County) was roughly 65% transit, 28% maintenance, 5% enforcement. So admin is < 2% of it. Those numbers in context are interesting. In FY2011/12 the departmental breakdown of employees exceeding set overtime limits were: - Transportation: 634 employees - Fire Department: 378 employees - Public Health: 115 employees - Sheriff: 85 employees. Everyone else in the city - combined - came to just 63 employees. In other words, these are critical positions drawing nearly all of the overtime.
    - supernova87a 6y ago
      I don't know what needs to be done, I'm just an observer. But you would think there would be a state-wide "office of negotiation" to help cities avoid being put in a bidding war between each other, and to avoid the typical contract pitfalls that they sign unknowingly. Publish a calculating spreadsheet that shows how people's pension benefits are calculated, and what line items (overtime, etc) will or will not be included, and what costs will be incurred to the city if they are/are not. And let people review and find out how it will be exploited. I'm allergic to incompetence and inertia of this level that gradually ratchets up the cost for everyone. Government jobs are not a charity to be milked into giving people benefits above and beyond. Government service is supposed to offer job security, not high pay for performance and risk (or at least that's what it generally has come to be). Why are we paying top dollar, along with job security and low performance?
pupppet 6y ago
Forbes has become nothing more than a tabloid. Article immediately after this one: "The Best Shampoo For Dandruff, According To Dermatologists".
- kwertyoowiyop 6y ago
  It should at least be “According to Venture Capitalists.”
maerF0x0 6y ago
To add another dimension, the article makes no statements of productivity. Highly productive workers can demand higher salaries. Now, I am not claiming they're highly productive (and suspect the opposite), but until the data is there we're missing an important factor in judging.
Barrin92 6y ago
Putting those numbers into context, from the article there's about 40k employees earning on average 131k. That would be somewhat higher than the median wage in SF (~100k), and for all the employees be about ~5 billion in cost, which is slightly more than a third of the budget of 13.7 billion for the fiscal year 2020. I haven't looked at what percentage of cost for other cities salaried employees are, but it does not seem exceedingly high. I guess you could justify shaving off 10-15% or so, but I wouldn't characterise this as being a major source of trouble.
deleted 6y ago
[deleted]
izend 6y ago
Similar situation to Calgary, Alberta. When the oil sector was booming the private sector was being paid the highest salaries in North America and public employees complained massively and received the highest public sector salaries in the country. Now, oil and gas has cratered and the salaries in the private sector have collapsed (and thousands of job losses) the public sector is refusing to have any salary reduction even though the province of Alberta is completely broke and heading towards fiscal collapse.
- thedmstdmstdmst 6y ago
  Saying the province is broke misses the point. Alberta has the lowest provincial tax rate in North America, has the lowest personal tax rate in Canada, and has no provincial sales tax. All of these because of a reliance on Oil and Gas royalties. Calgary has a similar dynamic with over reliance on commercial real estate for major oil and gas companies. Alberta is an outlier in how it finances public services. These are structural problems which won't be solved by public sector taking 5, 10, or even 20% reduction.
  - izend 6y ago
    Please take a look at the latest Alberta government 2020-2021 budget update [1], the resource revenue has collapsed to a mere $1.5 billion which is 2% of government expenditures. Also, the government is running a pre-Covid deficit of $8 Billion which has ballooned to $24 Billion due to Covid. The government must raise taxes or reduce expenditures or face more indebtedness than Quebec per capita. [1] https://open.alberta.ca/dataset/9c81a5a7-cdf1-49ad-a923-d1ecb42944e4/resource/df5d0611-2278-4fdb-aa7b-0c71932479cb/download/2020-21-first-quarter-fiscal-update-and-economic-statement.pdf https://open.alberta.ca/dataset/9c81a5a7-cdf1-49ad-a923-d1ec...
    - NotSammyHagar 6y ago
      So in Canada, unlike most or all us states, Alberta can run a budget deficit, they can just get loans? What if they declare bankruptcy or can't pay some bills?
throwawaymanbot 6y ago
I dont get this... City Employees should what? ear about 30K a year, But lets make sure Jeff Bezos pays no Taxs and is allwoed to become the richest man in the world? What am I missing?
hindsightbias 6y ago
Here are the SF city workers who earn big overtime checks https://www.sfchronicle.com/projects/2020/san-francisco-overtime/ https://www.sfchronicle.com/projects/2020/san-francisco-over... How does someone work 3000 overtime hours?

64 points by bgentry 6y ago

This article fails to make the point as to why this is a problem. You might as well make an article "Why Google is in trouble - 60,000 employees earned $150k+".

mc32 6y ago
Not really. Google isn’t saddled with retirement entitlements. Also Googles employees generate some of the highest revenues per staff in the industry. SF gets its revenues from its citizens via taxes. The employees don’t produce revenues themselves. They are cost centers. Cities by their nature, use regulatory capture to extract revenues. If googles revenues go down they cut staff. Cities rarely cut staff in line with budget decreases.
- deleted 6y ago
  [deleted]
- kneel 6y ago
  Corporate welfare is a problem. Why do cities offer tax benefits to these companies at the expense of their own residents? Ironic that SF is going broke with some of the richest companies ever residing here.
  - mc32 6y ago
    And it will get worse for cities trying to milk the system if more firms opt for remote work. They should pay a fair share but also cities should not see cos as their cash cow.
- content_sesh 6y ago
  "Retirement entitlements"? You mean the pensions people have earned, with their labor? It's not a surprise, to anyone who thinks about it for more than 20 seconds that RN or firefighter is not, in fact, a revenue generating position for the city. But they're generally agreed to be necessary, so why should they not be paid a living wage?
  - emsy 6y ago
    Some might say they're... entitled to them.
  - mc32 6y ago
    No issues with common sense retirements —but some of these are 90% of pre-retirement salaries where people “retire” take their entitlements and work elsewhere after retirement making good money on top of their retirement.
    - freeone3000 6y ago
      Okay, so what?
      - mc32 6y ago
        I want service out of my money that contributes to that pension. Make it 30 or 40 years like everyone else has to work.
      - shaftway 6y ago
        I know a couple firefighters in the bay area and they definitely game this system. They'll work a typical salaried position for ~30 years, and then in their last year (or last couple years) they'll stuff as much overtime as they possibly can in, sometimes more than triple their regular salary. Pension is based on wages over the last year or two, so their pension payments skyrocket upwards. Managers know and are complicit in this, in solidarity with their coworkers. There's often peer pressure too; lower ranked staff are urged to not even request overtime so that it can all go to the near-retirees without a paper-trail of favoritism. It's not uncommon for >98% of overtime to go to the 2 or 3 people who are close to retirement. I'm all for a living wage for people in critical or permanent roles, but this is not that, and it's not fair. This is the opposite, driving pay down for newer recruits (because they can't request overtime), driving retirement benefits up (far above what was earned during the career), and costing the public in the process.

thatfrenchguy 6y ago

Do we want city employees to live in the city ? Because unless your family bought a house in the 60s, you probably want to earn $150k to live in the city.

aphextron 6y ago
>Because unless your family bought a house in the 60s, you probably want to earn $150k to live in the city. That's renting a 1 bedroom apartment money. To even dream of ever buying something and supporting a family you're talking $200k+.
- konjin 6y ago
  200k? I know people on 600k total comp who have been stuck in a one bedroom flat for 4 years because of how many strings the money comes attached with.
- bb88 6y ago
  I've heard that in the past before 2008, banks were willing to offer mortgages up to 3.5x income at 5 or 6% interest. With a fixed 3% rate, you could probably do a mortgage with 4x income. And a quick look shows there are not a lot of houses in the $600k range. Most decent homes are going to be in the $1M range.

adt2bt 6y ago

This reads like a clickbait article with an agenda. Also, who cares? SF is one of the most expensive cities in the world - it's probably fair to expect city employees to make a liveable wage in the city they serve.

bb88 6y ago
That gets to the point. Normally, as a city, you'd probably want your employees to live in the city that they service. If you don't live there, you're not going to care about hypodermic needles on the street as much. "Meh, it's San Francisco. Who cares?"
kyleblarson 6y ago
SF residents facing ever increasing taxes and an increasingly dilapidated and unsafe city likely care.
supernova87a 6y ago
Except that the city's negotiating abilities are so incompetent that these overtime $ costs (which in the past had guarantees like "required to ratchet up and remain the 2nd highest paid scale in the US") and expansion of employees numbers gets further baked into pension and debt costs far into the future. https://www.sfexaminer.com/news/why-muni-cant-find-good-drivers/ https://www.sfexaminer.com/news/why-muni-cant-find-good-driv... https://www.sfgate.com/bayarea/article/City-and-Muni-operators-agree-on-new-contract-5590634.php https://www.sfgate.com/bayarea/article/City-and-Muni-operato...
content_sesh 6y ago
It's breathless pearl clutching targeted at Forbes readers who would be scandalized that their perceived inferiors are making what amounts to a moderately livable wage in one of the most expensive places on earth. As a quick example, here we can see the author making an extremely weird argument that the guy running the agency that serves the homeless in the city is somehow doing a bad job because there are more homeless people now than there were in 2016. > In 2016, the city added a new agency to serve its homeless residents. By 2019, the department had 148 employees, and 53 of them made more than $100,000. > The director, Jeff Kosinsky, brought home up to $238,182 annually, but each year the city’s homeless population continued to grow.

woke_neolib 6y ago

It's wonderful that city employees make competitive salaries. I wish they were held accountable when they failed to do their job.

panzagl 6y ago
I have no problem with most of the base salaries, but the amount of overtime screams either inefficiency or corruption.

konjin 6y ago

A family of 4 is low income on $110k. SF and but-fuck-nowhere West Virginia are not places to compare on cost of living.

KoftaBob 6y ago

Until California overhauls their ridiculous Prop 13 artificially keeping property taxes low, these arguments blaming budget shortfalls on salaries will continue to be a moot point. Yes, there can be rampant overtime abuse by government workers to get these inflated salaries, that's a large problem in NYC transit agencies. However, the overt limiting of city revenue due to Prop 13 is a major cause of budget shortfalls that's looking them right in the face. If someone is in serious debt while at the same time going out of their way to voluntarily take a lower salary, does it make sense to blame it on their expensive internet bill, or tackle the salary first?

egberts1 6y ago
There’s a reason why the citizens of California passed Prop 13 in the 1970s. Or did we conveniently forget?
syspec 6y ago
That's true if it wasn't for Prop 13, the sherif would of definitely not made 350k in overtime this year. Very good point

vcolano 6y ago

The issue I perceive with this is that all of these wages seem to be extremely inflated compared to the job market for similar roles. Are private hospitals in SF paying RNs almost 300k a year? Are the FB shuttle shuttle drivers or delivery drivers in industry making 108k a year? I doubt it.

tootahe45 6y ago
It's a common problem actually. Private shuttle companies complain they are unable to compete with all the benefits etc. Government monopolies are the absolute worst for this reason.

pp19dd 6y ago

Having worked on stories like these, I'd caution anyone to examine some of the overtime outliers before responding to them. Often enough the highest visible overtimes on a city budget are social functions, like a sheriff who provides honorary protective detail to stadiums where they are later bizarrely reimbused through that mechanism. Below that and down-to the median overtimes usually speak for themselves and draw a fair amount of criticism, but otherwise, the vast combined aggregate under the median points out that we don't pay people enough for the jobs they do, and we can't hire enough of them at that price.

supernova87a 6y ago
It would be just some one-time outliers, except there are real problems where overtime is counted towards retirement, and workers actively inflate their last years just to bump up their pensions and retirement pay. And none of that kind of thing is protected against in the contracts. So the city and taxpayers are being screwed.
- pp19dd 6y ago
  The last-three-years retirement bowling lanes you're describing need a US-wide overhaul, but it's definitely not an uncommon occurrence in public service admin anywhere in the states, on a City, State and Federal level. But the overtime budget breakdown for SF (City and County) was roughly 65% transit, 28% maintenance, 5% enforcement. So admin is < 2% of it. Those numbers in context are interesting. In FY2011/12 the departmental breakdown of employees exceeding set overtime limits were: - Transportation: 634 employees - Fire Department: 378 employees - Public Health: 115 employees - Sheriff: 85 employees. Everyone else in the city - combined - came to just 63 employees. In other words, these are critical positions drawing nearly all of the overtime.
  - supernova87a 6y ago
    I don't know what needs to be done, I'm just an observer. But you would think there would be a state-wide "office of negotiation" to help cities avoid being put in a bidding war between each other, and to avoid the typical contract pitfalls that they sign unknowingly. Publish a calculating spreadsheet that shows how people's pension benefits are calculated, and what line items (overtime, etc) will or will not be included, and what costs will be incurred to the city if they are/are not. And let people review and find out how it will be exploited. I'm allergic to incompetence and inertia of this level that gradually ratchets up the cost for everyone. Government jobs are not a charity to be milked into giving people benefits above and beyond. Government service is supposed to offer job security, not high pay for performance and risk (or at least that's what it generally has come to be). Why are we paying top dollar, along with job security and low performance?

pupppet 6y ago

Forbes has become nothing more than a tabloid. Article immediately after this one: "The Best Shampoo For Dandruff, According To Dermatologists".

kwertyoowiyop 6y ago
It should at least be “According to Venture Capitalists.”

maerF0x0 6y ago

To add another dimension, the article makes no statements of productivity. Highly productive workers can demand higher salaries. Now, I am not claiming they're highly productive (and suspect the opposite), but until the data is there we're missing an important factor in judging.

Barrin92 6y ago

Putting those numbers into context, from the article there's about 40k employees earning on average 131k. That would be somewhat higher than the median wage in SF (~100k), and for all the employees be about ~5 billion in cost, which is slightly more than a third of the budget of 13.7 billion for the fiscal year 2020. I haven't looked at what percentage of cost for other cities salaried employees are, but it does not seem exceedingly high. I guess you could justify shaving off 10-15% or so, but I wouldn't characterise this as being a major source of trouble.

deleted 6y ago

[deleted]

izend 6y ago

Similar situation to Calgary, Alberta. When the oil sector was booming the private sector was being paid the highest salaries in North America and public employees complained massively and received the highest public sector salaries in the country. Now, oil and gas has cratered and the salaries in the private sector have collapsed (and thousands of job losses) the public sector is refusing to have any salary reduction even though the province of Alberta is completely broke and heading towards fiscal collapse.

thedmstdmstdmst 6y ago
Saying the province is broke misses the point. Alberta has the lowest provincial tax rate in North America, has the lowest personal tax rate in Canada, and has no provincial sales tax. All of these because of a reliance on Oil and Gas royalties. Calgary has a similar dynamic with over reliance on commercial real estate for major oil and gas companies. Alberta is an outlier in how it finances public services. These are structural problems which won't be solved by public sector taking 5, 10, or even 20% reduction.
- izend 6y ago
  Please take a look at the latest Alberta government 2020-2021 budget update [1], the resource revenue has collapsed to a mere $1.5 billion which is 2% of government expenditures. Also, the government is running a pre-Covid deficit of $8 Billion which has ballooned to $24 Billion due to Covid. The government must raise taxes or reduce expenditures or face more indebtedness than Quebec per capita. [1] https://open.alberta.ca/dataset/9c81a5a7-cdf1-49ad-a923-d1ecb42944e4/resource/df5d0611-2278-4fdb-aa7b-0c71932479cb/download/2020-21-first-quarter-fiscal-update-and-economic-statement.pdf https://open.alberta.ca/dataset/9c81a5a7-cdf1-49ad-a923-d1ec...
  - NotSammyHagar 6y ago
    So in Canada, unlike most or all us states, Alberta can run a budget deficit, they can just get loans? What if they declare bankruptcy or can't pay some bills?

throwawaymanbot 6y ago

I dont get this... City Employees should what? ear about 30K a year, But lets make sure Jeff Bezos pays no Taxs and is allwoed to become the richest man in the world? What am I missing?

hindsightbias 6y ago

Here are the SF city workers who earn big overtime checks https://www.sfchronicle.com/projects/2020/san-francisco-overtime/ https://www.sfchronicle.com/projects/2020/san-francisco-over... How does someone work 3000 overtime hours?