Sunday • December 15, 2002

Benefits sweeten the pot for many

By Maryann Maslan/Vallejo Times-Herald

Budget deficits and rising health insurance costs are key concerns for many public agencies as they try to maintain competitive benefits and salaries for employees.

A 24.1 percent increase in health care premiums is projected for 2003, according to California Public Employee Retirement System (CalPERS), the nation's second largest buyer of public employee health care after the federal government.

Some agencies are facing as much as a six-digit increase in CalPERS contributions for next year.

The burden of rising costs can fall to the employee or employer, or be picked up in part by the state.

Benefit packages for employees can vary greatly from agency to agency and the information provided for The Reporter's annual salary survey by agencies is not always complete or easy to interpret.

In addition to a base salary, many public employees - particularly those in management or high-level positions - receive pay in other forms that can substantially increase their total compensation package.

For example, District Attorney David Paulson is paid a base salary of $156,119. However, with longevity pay, life insurance, long-term disability insurance, retirement contributions and health benefits, his total compensation is $197,282.

The Vallejo City Development Services Director John Bunch has a base salary of $137,733. With health and dental contributions, an auto allowance and management incentive compensation added in, his total compensation is $163,156.

The management incentive bonus is one way to provide added compensation for some employees.

Solano County government managers no longer receive money for automobile or businesses expenses. Since 2001, that money has been included in a management incentive program, which was created to promote high-quality performance. Managers received up to 15 percent of their base salary as a bonus.

By comparison, in the city of Vallejo, most management level employees received a management incentive that equaled 5.7 percent of their base salary. Many of those receiving the bonus also received an auto allowance.

For Vallejo city employees, management incentive is a "mislabeled term," said Debora Boutte, the city's human resources program manager.

"In 1989 we standardized paid time off, up to 120 hours, to be used for different things like professional development, dues and training," Boutte said.

"But in 2000, we had to conform to CalPERS language that defined what they count toward salary retirement benefits. It's their language," Boutte said.

"This is equivalent to what some (agencies) call administrative or management leave."

For Vallejo City Manager David Martinez, these and other benefits coupled with his base salary of $188,150 bring his total compensation to $217,990.

And Vallejo's mayor Anthony Intintoli, although he does not receive an incentive bonus, does receive an auto allowance, expense reimbursements and a $19,800 expense allowance.

The city of Benicia has cut costs in two ways, said Kim Imboden, senior personnel analyst for the city.

Employees with health care plans other than what the city offers, may take cash "in lieu of" signing up for the city's health plan options. "If they have another enrollment plan we offer them the single person, $231 a month payment, not to take the plan," Imboden said. "This is a cost savings for the city."

"In lieu of" payments save the city about $383 per month, per individual - the difference between the single rate of $231 and the maximum family rate of $614 - as defined in the Kaiser medical plan offered by the agency.

Deferred compensation, a pre-taxed retirement account for employees, is another savings to agencies.

"Some cities don't contribute at all, or a percentage of salary goes into a deferred plan," Imboden said. "It costs the city a little less."

In Vallejo's case, there is no deferred compensation for any of city employees, with the exception of the police and fire chiefs. The city does offer a retirement option plan that is "100 percent paid for by the employee," said Mark Mazzaferro, public information officer.

Retirement programs can take many forms, but the preferred plan for most California public agencies is CalPERS or California State Teachers Retirement System (CalSTRS).

This fundamental benefit provides employees a choice of health care options, with the employer paying a percentage of the total amount and the employee responsible for the remainder.

In the case of CalSTRS, the rate of contribution is fixed at 8.25 percent paid by the district and 8 percent paid by the employee, said Mike Bowers, Benicia Unified School District assistant superintendent for business services.

Contributions to CalPERS have lower rates. The employer shares a 7 percent contribution with the state and the employee matches the combined contribution.

"In the past the state paid the whole state/district portion," Bowers said. "Now we pay up to 2.8 percent."

"It's a continuing drain on our general budget and an indirect cost for employees. We hope it won't happen all at one time," Bowers said, as his and other agencies wait for the tightening of the state budget.

Maryann Maslan can be reached at mmaslan@thnewsnet.com.