Roseville Mayor and City Manager respond to concerns about police union tactics

Posted July 19, 2013

The following public statement is being released by the City of Roseville and posted to its website in response to the police union's press conferences and email campaigns to citizens, the most recent of which occurred earlier this week and generated inquiries to the City that must be addressed.

From Roseville Mayor Susan Rohan:
Police union leaders have held press conferences and sent out emails to citizens, which misrepresent the facts. Before we address union tactics, the first thing I’d like to do is assure this community that our police officers are honorably performing their public safety commitment and that their service is valued by the City Council and City leaders.

That said, I am absolutely perplexed that the leaders of this union, with which the City has had a strong partnership for years, are not following the protocol established by the labor relations process.  The union leaders have so far not requested to come back to the table to negotiate a contract. The council action May 30 was to impose terms and conditions of its last offer (which included increased benefits such as health care increases and additional personal leave), until a contract could be negotiated. The ball is in their court to return to the bargaining table with a different proposal.  They must come with a clear understanding that the City Council will not agree to terms that widen the structural deficit the rest of the city employees have worked diligently to close. 

We welcome the opportunity to answer the public’s questions, as outlined below.

From City Manager Ray Kerridge:
Confusing and misleading information from the police union leaders has led to inquiries from the public that we’d like to address.

How does Roseville police officers’ compensation compare in the region?
Roseville police compensation is competitive in our region.  Roseville police officers’ annual compensation is $112,956 including pay and benefits. Roseville officers make more than police officers in Sacramento, Folsom, Davis, Modesto, Lodi and Redding.

This puts Roseville police officers at 5th among 12 Northern California cities.  City of Vacaville officers make $9 more each month and Rocklin officers (the second highest paid police officers in the comparison) make $421 more per month. The assertion that our officers are not competitively compensated cannot be supported when you look at the numbers.

Are police officers leaving Roseville to work at other cities because of pay issues?
Workplace attrition is normal and occurs for a variety of reasons including retirement, promotions, disciplinary and personal reasons. We are not aware of any officers leaving due to compensation issues.

Is the Roseville Police Department able to fill its vacancies?
Job openings in every department, including the police department, regularly attract more qualified candidates than we could ever hire. We recently filled seven police department vacancies from a field of well-qualified candidates after the new terms and conditions were in effect. We hear repeatedly that police officers consider Roseville among the most desirable communities to work in Northern California.

The police union’s press release and email to citizens say the union paid for an audit and was surprised to discover $91 million in secret, hidden revenue. Is this true?
No.  There are several misrepresentations in the union leaders’ press release, some of which are even in conflict with the report from their own CPA firm.

  • First, the CPA firm the union hired did not conduct an audit.  It conducted a review of the city’s financial position, as the CPA stated in information the union released to the media.  While this might appear to be a minor point, to finance and accounting professionals it’s a serious distinction since an audit is an extremely detailed and thorough examination of financial records.  The city undergoes financial audits on a regular basis. This was not an audit.

  • Second, this information should hardly be a “surprise” to the union.  In the materials the union released to the media, the union’s CPA firm confirmed that this information was initially provided to the union in January of this year.  The review was never shared with the City.

    In addition, the information they used is readily known and available to everyone online.  Roseville’s budgeting process is transparent and open to public input and inspection.  There are no revelations in this review. The way the City budgets, which includes setting aside special funds for special purposes “puts the City in a good financial position,” as the union’s CPA noted.

  • Third, the money the union describes as “revenue” is not revenue; it’s in savings accounts.  Revenue is income generated on an annual basis.  The City Council set aside most of these savings in the accounts called out by the union in previous years, dating back to 1994, for specific purposes . The rest are monies that were budgeted, but not spent. Fortunately for our community, the City of Roseville emphasizes underspending, not overbudgeting, and we appreciate the critical role our employees play in being vigilant stewards of public funds. The unspent amount can’t be finalized until several months after each fiscal year closes, so the CPA firm is offering an extremely liberal estimate of what those numbers might be.

So what are those $85-$91 million in savings accounts used for?
The funds that are highlighted in the review exist because the City set aside monies during better economic times for specific purposes. It isn't prudent for a city to squander money for future needs on unneeded expenses.   A city without adequate reserves and savings is a recession away from fiscal insolvency as we've seen recently in several California cities, and just yesterday, in Detroit.

It is important to note what kinds of things the savings accounts are set aside for.  The Vehicle Replacement Fund, for example, pays for new police vehicles and fire trucks.  A portion of the amounts in that fund comes from utility ratepayers for our utility fleet and therefore are not available for police pensions by law.  The General Fund’s Capital Improvement Rehab Fund supports the upkeep and maintenance of the City’s physical assets such as parks, service centers, recreation centers, pools, and libraries; the Strategic Improvement Fund allows us to invest in our community by helping to pay for things such as downtown infrastructure improvements; and the General Fund reserves have helped us continue high levels of public services during challenging economic times.
 
The review also highlighted the Citizens Benefit Fund, which is where the proceeds from the sale of Roseville Hospital were set aside by the City Council as part of the municipal code in 1994.  The interest from this endowment helps fund non-profits and organizations to improve the quality of life of Roseville residents.  Recipients of grants awarded last month by the City Council on recommendations from the Council-appointed Grants Advisory Commission include Roseville Police Activities League, Roseville Police Charitable Corporation, the Roseville Police Department, the Placer County Chaplaincy and the Gold Country Chaplaincy.  To date, over $14 million has been awarded to Roseville organizations from the interest on this endowment.  It would be against the municipal code to spend these community funds on police compensation.

Are the police officers the only city employees being asked to start contributing toward their pension costs?
No.  The rest of the city’s employees already saw a decrease in their compensation last year when they began contributing toward their pension costs.  Police department employees are the last to be asked to do this.

Having employees contribute toward pension costs is a key part of the City Council’s long-term strategy to close the budget gap we’ve been facing for a few years due to a structural deficit. Since police officers are part of our workforce, they are not an exception to that policy.  As any family or business does, the City must match ongoing expenses with ongoing revenues.

Why can’t the city’s savings accounts or any increase in revenues just be earmarked for police compensation?
Just because the City has money doesn’t mean it should spend it or spend it on salary increases.  If the workforce compensation is competitive, it would not be wise to budget more money towards labor costs when community priorities such as parks, libraries, pools, community facilities and roadway maintenance could benefit. Or when we could increase the levels of service or range of services to our residents, businesses, and visitors.

It is important to note that the City of Roseville is known throughout the region and state as an extremely well run, fiscally prudent and financially conservative city.  As the union’s CPA noted in its review, “The fact that they [City] have maintained that balance during the recession period is extraordinary.”  Roseville weathered the recent harsh economic downturn because of our smart and conservative financial policies – the same policies it seems that the union is campaigning for the City to abandon for the benefit of its members alone.

If the City were to have a significant spike in revenue that outpaced its expenses, how would the city decide what to do with it?
First, since we’ve had to dip into our reserves the past few years to patch the structural deficit, we would like to increase our reserves from 10 percent to 15 percent of the General Fund.  We also need to put more money into underfunded savings accounts to avoid future service cuts. This is sound financial planning.

We have to consider the City’s entire financial picture and balance competing funding priorities, including priorities expressed by the community through the City Council and its budgeting workshop process.  This is the kind of situation we look forward to having. In the meantime, we refuse to allow union tactics to change the prudent fiscal approach that has kept our City in solid financial standing during the toughest economic period in recent history.

So where do things stand now?
The City places a strong emphasis on fair and competitive compensation of its workforce.  This must be balanced with our priority to provide excellent services and facilities to our businesses and residents.  Were we to use these one-time monies to provide a special exception to police that the rest of our employees have already given up, we would have to make hard choices about the size of our workforce and the quality of our facilities and services. This is not a smart way to run a city.
 
Roseville is in this strong financial position because our prudent budgeting approach has remained consistent during both prosperous and challenging economic times.  This ensures Roseville continues to be the attractive place it is for our residents, businesses, and visitors.

It is now up to the union leaders to return to the bargaining table with a new proposal that demonstrates an understanding of the role they must play in our city’s continued success for the future.