Hard economic times have taken a toll on local public agencies, including both the City of Corcoran and the Corcoran Unified School District. Schools have been able to rebound, with Gov. Jerry Brown first axing redevelopment agency (RDA) funding—which further negatively impacted the city, by the way—while increasing the state sales tax to benefit education.
Have the agencies been able to run leaner and meaner since the Great Recession of 2008? Faced with a variety of factors, the answer appears to be yes and no. The school district now operates on a $35 million a year budget, while the city’s budget is set at approximately $16 million, not much more than 2010 levels. However, both have seen continuous increases in wages and benefits for employees.
Back in 2011, former City Councilman Terry Kwast tried to sound a warning to the city. He provided a salary comparison to the city council, noting wage increases between 2001 and 2011. Overall, he noted, wages had increased an average of approximately 46 percent during that 10-year period, while private sector increases over the same time were significantly lower, at about 28 percent.
That was not the main problem, however. Kwast pointed out that even if wages were frozen in 2011, the problem would not be solved. Insurance costs over the 10 years had increased by 202 percent and the retirement payments had increased by 211 percent.
His main point was the fact that wages and benefits were taking a toll on the city’s once-healthy general fund. While general fund revenues had increased from $2.9 million in 2001 to $4.6 million in 2011, expenditures had also exponentially increased.
“Your problem is not a shortage of revenue increases,” he said at the time. “It is the result of significant increases in expenditures.”
While income in the general fund had gone up by 53 percent, spending from the same budget resource had increased by double that amount. And reserves were beginning to tumble.
By 2011, the city had spent down half of the general fund reserve, leaving about $2 million in place. At that time, it was noted by city staff that $2 million was considered the minimum that should be left in the reserve in order to meet city cash flow needs. This year, the expected general fund reserve is estimated at $1.5 million.
The city is operating with fewer employees. During the 2009-10 fiscal year, there were 80 full time employees and 12 part time employees; now there are 64 full time positions and five part time employees.
In the city’s newest salary schedule resolution, approved in September and retroactive to the beginning of the fiscal year July 1, salaries got another bump. It appears once again salaries and benefits are fueling the decrease in the general fund.
For example, the city development director position paid (on the highest step) about $8,800 in 2011, an increase of over 69 percent since 2001; now, the position pays $9,171 per month, plus benefits. It should be noted the position is also in charge of code enforcement and the building official. The finance director position pays $8,551 (second step), compared to $7,984 in 2011—which was already an 89 percent increase over the position’s pay in 2001. The deputy police chief’s salary has topped out at $8,427, less than that of the finance director, while the chief’s salary has capped at approximately $10,800; he has been on the job for about two decades. The most recent public works director retired at a salary of about $10,000 per month, after 20 years on the job.
The city manager’s salary is determined by negotiations with the council. Dr. Kindon Meik has been on the job four-and-a-half years and makes $145,000 a year, plus benefits that include a monthly car allowance.
Comparing insurance benefits between the city and the school district is like comparing apples to oranges. The city has different plans that pay between 70 percent and 80 percent of insurance costs. The city also has a plan that pays employees $150 per month not to be covered by insurance, if, for instance, a spouse already provides such coverage.
The school district, on the other hand, sets a cap on insurance plans. There is a $13,592 a year limit the district will pay for insurance for some employees. That amount is increased to $13,950 for certificated personnel (teachers), an amount reached through negotiations.
While the city spends about a third of its budget on salaries and benefits, the school district amount hovers around 72 percent. While that percentage may seem high, in the past, the district has paid out well over 80 percent of its budget in the same category. With an operating budget of about $36 million, the district pays about $26 million for its 350 employees.
Highest on the salary schedule is Superintendent Rich Merlo, who earns approximately $162,000 in wages and benefits, car and phone allowance included. He has been heading the district since 2004. The salary for the director of educational services is set at $144,313 per year; director of categorical services salary is $126,854 and the technology director has a salary of just over $125,000 a year.
The high school principal is compensated at $117.658 a year, while the junior high school position pays $109,622 (this is his first year. At the elementary level, principalship positions are making about $116,831 for more senior personnel.
The highest step on the salary schedule for a teaching position is $92,668. There are currently 42 of the district’s 170 teachers making the highest step salary. Their work schedule calls for 184 days of employment, about half the year. The lowest step, for beginning teachers, is over $45,000.
The state has long required school districts to maintain minimum reserves of at least three percent. The local school district, while coming close to that margin after the recession hit in 2008, has recouped and is well over that reserve amount. This has been possible even with the district opting for low interest loans to make continued improvements to its school sites.