Oakland City Employees Make Big Bank

Mary Theroux challenged the city of Oakland, California’s virtue signalling in a recent editorial here The Beacon, arguing that the city’s politicians and bureaucrats are emphasizing what I would describe as selective “revenue-enhancing” law enforcement while ignoring their duties to deliver basic services for city residents, such as cleaning piles of trash accumulating all over the city.

But that may not be the only misallocation of public resources in which Oakland city officials are engaging. Politico‘s Carla Marinucci and Jeremy B. White report on the growth in the city’s payroll from 2014 to 2018:

In Oakland, the city payroll has exploded 43 percent in the last four years—up from $492 million in 2014 to an all-time high of $622 million in 2018, according to new data from the watchdog website, Transparent California.

Some of the city employees are making big bank. Take Oakland beat cop Malcom Miller, who has been among the city’s top earners for the past five years. He took home $539,735 in total compensation for 2018, $452,363 from straight pay, the site reported. Another big earner: Fire Captain Lawrence Hom, who raked in $557,655 in total compensation—an amount bulked up by $309,185 in overtime pay. Then there’s Civil Engineer Kenny Lau, who was reported to work 366 days in 2017, a leap year; last year, he earned regular pay of $116,503, plus overtime of $287,579, plus additional pay and benefits that put his total at $508,178, Robert Fellner of the organization told POLITICO Monday.

In Oakland, a city where the U.S. Census Bureau says the average full-time worker earns $50,313, that’s quite a gap between the average resident and the local public servants. For those top earners, the take home pay is more than twice that of the California governor, who earns a salary of $201,680, according to the California Citizens’ Compensation Commission.

I was curious to find out more about how Oakland’s payroll changed from 2014 to 2018, so I went to Transparent California’s city database and pulled all the records for all city government employees for both these years. Here’s the short summary of what I found:

The number of people employed by the city of Oakland decreased by 318, from 6,158 in 2014 to 5,840 in 2018. The number of full-time employees increased by 385 from 2,314 to 2,699, while the number of part-time employees decreased by 703, from 3,844 to 3,141.

The total base pay for all city employees rose by $58.2 million from $271.3 million to $329.5 million, an increase of over 21 percent. The average base pay per city employee increased by 28 percent from $44,060 in 2014 to $56,425 in 2018. For full-time city employees, average base pay increased by 18 percent from $81,258 in 2014 to $95,729 in 2018, while part-time city employees saw their average base pay increase by just 4.5 percent from $21,668 in 2014 to $22,652 in 2018.

Part-time workers in Oakland do not earn significant compensation in the form of benefits. Full-time city employees, however, saw very generous increases in this portion of their compensation, with the total bill to city residents rising by $55.5 million, or 40 percent from $138,363,695 in 2014 to $193,977,845 in 2018.

The average cost of benefits received per full-time city employee increased by 20 percent from $59,794 in 2014 to $71,870 in 2018. The $12,076 increase in the value of average benefits paid to Oakland’s full-time employees is greater than the annual incomes paid to 1,240 of the city’s part-time employees in 2018.

In 2014, 71 Oakland city employees earned more in overtime pay than their base pay, earning an additional $107,398 on average, and accounting for 15 percent of the city’s total overtime expenses of $51.1 million. That number fell to 58 employees in 2018, but the average amount of overtime earned by these employees rose to $129,669, which was 13.5 percent of the total cost to the city for overtime of $55.9 million.

In February 2019, Oakland was facing a two-year budget deficit of $43 million, with the city’s expenditures rising far faster than its revenues. Steven Tavares of East Bay Citizen cites city Finance Director Katano Kasaine’s report to the city council that the rising cost of pension benefits for city employees is directly responsible for its poor fiscal situation.

“General purpose fund expenditures are growing two to three times faster than inflation and revenue growth due to personnel costs and self-insurance claims,” Kasaine told the council.

... pension costs continue to stymie the city’s budget. “This will continue to drain the general fund as long as we have this liabilities. This is where most of our money is going,” she said.

These circumstances give Oakland officials strong incentives to both pursue revenue-enhancing law enforcement schemes and to shirk their responsibilities to provide basic public services to city residents. No wonder city officials are prioritizing enforcement of the city’s Mandatory Recycling and Plant Debris Disposal Ban Ordinances!

Craig Eyermann is a Research Fellow at the Independent Institute.
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