Mapping the saga of San Bernardino

November 14, 2012

Reuter’s reporters Tim Reid, Cezary Podkul and Ryan McNeill wrote a great analysis of the fiscal and political troubles of bankrupt San Bernardino, California. They zeroed in on the high cost of wages and pension benefits for fire and police safety workers:

In bankrupt San Bernardino, a third of the city’s 210,000 people live below the poverty line, making it the poorest city of its size in California. But a police lieutenant can retire in his 50s and take home $230,000 in one-time payouts on his last day, before settling in with a guaranteed $128,000-a-year pension. Forty-six retired city employees receive over $100,000 a year in pensions.

Almost 75 percent of the city’s general fund is now spent solely on the police and fire departments, according to a Reuters analysis of city bankruptcy documents – most of that on wages and pension costs.

When you look more deeply, the high salaries and pension benefits for safety workers are crushing the city, as I have already written:

San Bernardino Mayor Patrick J. Morris said on Southern California Public Radio yesterday that the city’s public employee wages were especially “lucrative.” Although city employees agreed in 2010 to a 10 percent wage reduction for two years, the firemen’s union had told him to “pound sand” and sued the city to restore the previous wage level. It’s clear from this episode that even though San Bernardino firefighters were paid an average salary of $146,359 in 2010, they are entirely unwilling to help the city escape its fiscal black hole.

San Bernardino is required by its charter to pay equivalent wages to its safety employees as cities of comparable size. California Controller John Chiang has just relaunched a website that allows you to crunch the salary data for all public employees in the state (along with video tutorials). If you click around a little you see that the average 2010 wage for a San Bernardino employee was $56,346, but when I pulled the data for police employees, the average wage (including overtime) was $110,099. The majority of policemen were earning 10-20% more than their maximum annual salary cap for public employees.

When Controller Chiang relaunched the public pay website after its initial launch in 2010, he said:

Real accountability begins with empowering the public with easy access to the budgeting and payroll decisions of our civic leaders…Through innovation, California can strike a blow against abusive compensation practices that thrive on poor transparency.

This site is completely data-driven, and allows users to dive right into the numbers they want. But it does remain a work in progress, and my office will continue to improve and expand this public pay project.

The heart of the Reuters story is that San Bernardino city officials knowingly or recklessly held back information from the public about the city’s largest liability, its pension costs:

Complicating matters were obscure budgeting procedures that left residents in the dark. The word “pension” doesn’t appear once in the most recent 642-page budget, and retiree costs are buried in detailed departmental line items.

“I’ve been asking for years for the pension costs,” said Tobin Brinker, a former council member and pension-reform advocate, who lost his seat last year to a challenger backed by nearly $100,000 in contributions from the fire and police unions. “I still don’t know the number.”

There is undoubtedly much more to the San Bernardino story that involves coordination between city officials and public worker unions. Reuters writes:

Mayor Morris, a 74-year-old former judge who’s been in office six years, is scathing about the power he says the unions have over much of the city council. The unions, he said, “wag the dog.” (Council members are paid just $50 a month for their service, but also receive a car allowance worth $600 a month).

He rejects Moss’s argument that he should take responsibility for the financial crisis. He is particularly critical of his two-time challenger for the mayorship, city attorney Penman, who he said “has blocked all efforts to reform the budget” on behalf of the unions.

A broken city, whose finances have been mismanaged for years, cannot exit bankruptcy without a plan to become solvent again. The city has already stopped payment to CALPERS, the statewide pension system, and it is fighting to lower that liability. But high salaries and overtime expenses for police and firefighters still have to be addressed. There is another route, and that is to outsource these public safety responsibilities. The city is investigating contracting with the county sheriff’s department to take over law enforcement, and I have suggesting privatizing the largest expense of the fire department, which is its EMS service.

Transparency, if used actively by the public, can be the first resource in maintaining fiscal discipline and prioritizing resources for their civic needs.

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Democrats + Unions = Bankruptcy !!!

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