Sunday, May 1, 2011

Life's a bonus -- often many -- for city workers


Several days a week, Brandi Blue pulls her truck under a giant spigot spewing used toilet paper flushed from millions of toilets across Los Angeles.

When her truck is full, she hauls the 80,000 pound load 47 miles north to a landfill in Simi Valley. There, she puts on her gear -- white Tyvek suit, goggles and boots -- and steps right into the landfill to dump her truck.

On a good day, it's dirty, smelly work. On a bad day?

"You have trash flying at you from all directions. You've got debris and contaminants that blow on your body and get into your pores," Blue says.

Blue is a heavy duty truck driver for the city of Los Angeles. She could work for the Recreation and Parks Department or help pave city streets.

Instead, Blue chose the dirtiest of the dirty city jobs. She hauls sewage waste and sludge from the Hyperion sewage and wastewater treatment plant.

And for that she receives roughly an extra $3,000 a year, in addition to her $60,000 salary.

Blue's is one of some 300 bonuses and premiums paid annually to city employees -- for everything from working in "obnoxious" conditions, like she does, to being a police officer who can shoot well, to having professional licenses and extra education.

These bonuses add up to more than $150 million -- nearly half the city's $350 million deficit, according to data released by the city administrative officer and city controller.

Bonus pay for city employees has shot up 400 percent over the past decade as city officials approved more premiums, and existing bonuses -- many based on a percentage of salary -- became more expensive thanks to ever increasing salaries.

Yet, bonuses have been a stealth expense. Few City Hall elected officials know about the size and scale of the city bonuses. And unlike pensions and health care costs, bonuses have gotten little public scrutiny.

In 2006, Mayor Antonio Villaraigosa put reviewing employee bonuses at the top of his list of 10 ways to save money. In 2007, the city administrative officer got most city employee unions to agree to participate in a "Bonus and Codes Committee" to suggest ways to simplify the city's bonus system. But neither initiative got off the ground. Nothing happened and the cost of bonuses continued to grow.

Villaraigosa's Deputy Chief of Staff Matt Szabo said bonuses are still a concern, but one that's been overshadowed by the rising cost of retirement benefits.

"That's why we have sought and obtained aggressive pension and retiree health care reform, which will save the city hundreds of millions (of dollars) and allow us to restore critical services," Szabo said.

Still, faced with multi-million-dollar

Brandi Blue hauls hazardous materials at the Hyperion Sewage Treatment plant and get bonuses from the city for working in hazardous conditions. (David Crane/Staff Photographer)

deficits for at least the next five years, City Administrative Officer Miguel Santana says he would like to reform the bonus system. Employee compensation takes up 85 percent of the city budget, and bonuses simply add to the cost of providing public services, he said. Plus, many bonuses boost employees' pensions, which increases the city's unfunded pension liability.

"If every bargaining unit agreed to forgo bonuses, that would be $150 million saved overnight," Santana said.

But, he knows that's not going to happen. Every bonus is spelled out in a contract, and any change has to be negotiated with employee labor unions. To date, the mayor, CAO and City Council leaders have pushed to get city workers to pay more for their retirement benefits -- an effort that has had mixed results, as nearly half the city's full-time civilian work force last week rejected a proposal to delay pay raises and cover the cost of their retirement health care coverage.

Any talk of restructuring the bonus plans has quickly fallen off the table, according to both union and city officials.

Given the sheer number of bonuses and staggering cost, officials say, the city can't simply ignore the growing expense of premium pay.

"I would love to start from scratch," Santana said. "Every bonus should be justified based on demand for that position."

Public vs. private

City Hall blogger, watchdog and accountant Paul Hatfield was surprised to learn the city offers 300 different bonuses. When he worked in the music industry, companies offered a lot of bonuses but they were used to drive strategic goals.

"You tailor a bonus for a certain goal," such as efficiency or controlling costs, Hatfield said, "rather than just extending compensation."

In most companies, bonuses are generally tied to performance -- either the employee's performance or the business's performance and profitability.

At City Hall, no relationship exists between performance and bonuses. They are negotiated by the city and labor unions and awarded across the board to employees working in certain jobs or who have particular skills or training.

Pay and job classes are rigidly set through union contract negotiations that establish salary ranges and pay raise schedules. In the case of heavy duty truck operators, bosses have little flexibility to give one driver a raise for taking on a dirtier or more dangerous job.

Bonuses -- also called premiums and special pay -- are used to help recruit or retain workers in specialized, dangerous and less desirable jobs, or they help compensate workers who have additional skills or expertise.

Permanent pay

Unlike the private sector, city bonuses often become permanent. They become part of the union contract, forever tied to a job, even if the city doesn't have a recruiting problem or the skill isn't so special anymore. And some premiums are so specific, it's nearly impossible to keep track of who qualifies, when and why.

Consider the following:

  • When masonry workers use a jackhammer on the job, they get an extra 75 cents for each of those hours.
  • If you're a police officer and you can shoot a gun well (marksmanship), you get an extra $104 a year.
  • A firefighter who is required to enter the water to perform a rescue gets an extra $2 per hour for the full shift during which the rescue takes place.
  • A public works engineer can earn a $2,871 bonus for having a professional license.
  • If your boss calls you after hours with a question, you could get an hour of overtime pay.
  • A port pilot who makes around $217,000 a year to guide ships in the Port of Los Angeles can earn an average "efficiency bonus" of $36,100.

And every bonus has a story.

Take for example, the tax compliance officer's bonus. A few years ago the Department of Finance was facing an exodus of tax compliance officers. These are the men and women who conduct drop-in inspections of businesses to investigate and bust city tax evaders. It's a job that demands expertise and often delivers abuse, so officers were leaving in droves after a few years. Then the city and the union negotiated a $150 biweekly retention bonus for tax compliance officers who stayed on the job longer than 18 months. The extra money worked. The bonus helped slow the exodus and stabilize the city's tax enforcement operation.

"A lot of people have the misconception that it's a Christmas bonus. Basically, it's salary," said Paul Weber, president of the Los Angeles Police Protective League.

"You get a bonus because you have a particular skill or they want to keep you in a particular assignment," he explained, noting that the city spends thousands of dollars to train officers for specialized jobs, such as the bomb squad and canine unit, and wants officers to stay in those positions.

Under the radar

But bonuses have also been used to quietly boost compensation for select employee groups.

More than a decade ago, when L.A. was in another financial pinch, city leaders wanted to give police officers a raise but didn't want to call the extra money a raise and incur the wrath of the civilian unions.

The city and Police Protective League agreed to give every officer a bonus for having the basic peace officer certification (POST) -- which is required to work as a police officer. In 1996 the basic POST was 1 percent of salary and it's been 3 percent of salary since 1998. Besides the basic bonus, officers can qualify for even more money when they get intermediate and advanced POST certification based on education and experience.

"That was done as a cost-saving thing for the city. They didn't want to have to do (a pay raise) for everyone," explained Weber. "It's part of our base salary."

The city now hands out some 22,000 POST bonuses to LAPD, Airport and Harbor police officers at a cost of more than $41 million a year.

Major benefactors

The biggest beneficiaries of bonuses are police officers and firefighters -- two employee groups that already receive some of the city's highest wages and best pension benefits, and who have been largely exempt from the layoffs and furloughs faced by civilian workers.

Police and fire bonuses account for about $115 million of the $150 million paid out in premium pay.

Those include bonuses for skills required to do the job.

For example, the Los Angeles Fire Department gives a bonus to all firefighters who have an emergency medical technician certification. At one time, that was an incentive for a unique or specialized skill, but now the LAFD requires and trains all firefighters and chief officers to be EMT certified. The department spends $18.7 million for nearly 3,600 EMT bonuses.

But firefighters say the EMT bonus is misnamed.

"It makes it sounds like you're getting a gift from the employer. It's really base pay," said Pat McOsker, president of United Firefighters of Los Angeles City.

He argues the EMT bonus was agreed to as part of a union settlement more than two decades ago when the LAFD began requiring firefighters to have EMT certification.

"It probably should be part of regular pay," McOsker said. "You shouldn't have to give something up just because everybody has it."

Likewise, police officers assigned to patrol -- the most basic function of a cop -- collect an extra 3 percent of salary when they wear a uniform and work in the field. Detectives -- who get paid a higher salary -- also collect a 1-percent-of-salary detective incentive.

Time for review

But when the city is facing a $350 million dollar deficit, is furloughing workers, cutting services -- and still faces the prospect of bankruptcy -- city officials are asking if the city should be paying bonuses for skills required for the job.

Councilman Dennis Zine, who reviews employee contracts as part of the Executive Employee Relations Committee, was surprised to hear that bonuses now cost the city $150 million.

"When you start adding up bonuses, it obviously creates a whole lot of expense," said Zine. "Every dollar that goes to bonuses is another dollar out of the general fund."

When he joined the LAPD in the late 1960s, Zine remembers only a marksmanship bonus for good shooting skills. "Some of these may be justified," he said, mentioning bonuses for sworn personnel who work the SWAT detail or deal with hazardous materials. "But when you have a patrol bonus? Some of these should be subject to question."

Of course, he added, taking on bonuses is difficult work.

"These (bonuses) are all negotiated. To unravel them, you're talking about a huge undertaking."

Councilman Bernard Parks, who heads the City Council's budget committee, said the CAO is -- at some point -- supposed to start negotiating with employee unions on bonuses.

"This has been a growing phenomenon. You gotta go back and re-evaluate the bonus structure," Parks said.

Logical reforms

There are some logical places to start reforming the bonus system, said Parks and others in City Hall.

The CAO is re-evaluating awarding bonuses as a percentage of salary, rather than as a flat rate. The percent of salary method not only makes bonuses more and more expensive, as salaries increase, it also creates tremendous disparities between employees who are receiving the same bonus.

For example, employees with bilingual skills can earn an extra 2.75 percent of salary if they use their foreign language skill on the job. That means a recreation coordinator in the Recreation and Parks Department -- who presumably comes in contact with non-English speaking constituents throughout the day -- gets a bonus of $1,616 per year. A transportation engineering associate who analyzes traffic conditions and most likely doesn't have daily contact with the public collects an annual bonus of $5,053.

Only one employee group -- firefighters -- agreed in 2007 to flat rate bonuses. While the change actually cost the city more money in the first year, the flat rate should cut costs over the long run, according to the CAO.

Parks said he wants to make sure bonuses are no longer stacked on top of each other, exponentially increasing pay. Any bonus paid as a percent of salary should be calculated on the base salary, he said, not pay plus existing bonuses.

Likewise, Parks said, the city should evaluate the impact of bonuses on the pension system. Many bonuses are pensionable, meaning they are included in salary calculations that ultimately determine the size of an employee's pension when he or she retires.

There is also the question of transparency. While some bonuses are factored into an employee's approved salary, which is now made public on the city controller's website, some 120 categories of so-called temporary bonuses are not disclosed. Those include bonus payments for being on call, for working as a paramedic firefighter, for taking night or weekend shifts -- all of which can significantly increase pay.

Lastly, Parks said, the CAO will have to go through all 300 bonuses to make sure the premise is still valid.

For example, some bonuses are given for skills and expertise required to get the job. Roughly 25 veterinary technicians get a $3,132 a year bonus for being registered veterinary technicians -- despite the fact that the city won't hire a vet tech unless he or she is a registered vet tech.

Pay for risk

Given the city's dismal financial outlook and the need to save a lot of money, quickly, officials within the CAO and Mayor's Office said that bonuses will have to be on the table this year.

The city is beginning negotiations with several unions, including the police and firefighters unions. The challenge will be how to control the growing expense of premium pay without upending the original idea of public employee bonuses -- which was to incentivize people to take on the dirtiest, most dangerous and challenging jobs.

For Brandi Blue and her colleagues at the Hyperion sewage treatment plant, the "obnoxious" bonus is an important perk, a relatively small payment for taking on the risks and inconveniences that come with handling human waste.

That means going through extensive training on how to protect yourself, how to recognize that you've been exposed to bacteria or contamination and need treatment, and not just dismissing that sick feeling, as Blue said, as a "bad taco or something."

There's also an issue of equity, added Nick Terrell, a 28-year veteran who works in the plant's pipe shop.

There are classes of employees at the plant -- namely those who have the term "wastewater" in their title -- who have their obnoxious pay rolled into their base salary. To remove the bonus for some plant workers and not others would be unfair, especially when they are all exposed to the same conditions, Terrell said.

The bonus is an important part of retaining experienced, qualified workers in a pretty icky and potentially dangerous job.

Richard DeBry is a 25-year veteran at the plant and supervises the paint shop. He spends his days working with toxic chemicals, lead-based paints and flammable gases in and around the pipes, sewage tanks and equipment.

"The bonus for working here is about more than sewage. Some people come here and leave. They don't want to put on a mask and full suit and go into a tank," DeBry said. "You will lose good people, competent people if you don't compensate them."

Kerry Cavanaugh is an editorial writer and columnist for the Los Angeles Daily News. She can be reached at

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