Upland Council Committee Rejects Staff Ploy To Lock In High Salaries

(September 4) The Upland City Council finance and Economic Development Committee this week rejected a gambit by current and past city employees to lock the city into a policy of “ensuring” that Upland municipal employees will be paid salaries and provided benefits that are equal to or greater than those of city employees elsewhere.
Language to that effect was placed into a proposed ordinance that was billed as Upland’s “Fiscal Responsibility Act.”
While the staff report to the finance committee that accompanied the proposed ordinance contained a goal statement for the ordinance/act that “The proposed action supports the city’s goal to provide fiscal stewardship for the city of Upland,” committee members Brendan Brandt and Glenn Bozar appeared skeptical of the suggestion that the ordinance, in total, represented a blueprint for responsible stewardship of the city’s money.
On that score Brandt and Bozar found dubious the statement contained in the staff report that “There is no fiscal impact with this item.”
While the city for the last two years has ostensibly functioned with a balanced budget, it is on a collision course with fiscal reality in coming years. Two major independent surveys  of the city’s financial condition, a 2012 auditor’s opinion from the certified public accounting firm Mayer Hoffman and
McCann and Standard and Poor’s determination as to the city’s credit rating, paint a bleak picture for the City of Gracious Living.  Mayer Hoffman and McCann said there are serious questions with regard to the city’s solvency to the point that in a short while “it will be unable to continue as a going concern.” According to Standard and Poor’s, the city, which has already been downgraded from an AA credit rating to an A+, is in danger of seeing its credit rating eroding even further. A municipality’s credit rating directly impacts the interest rate it must pay when borrowing money.
The city’s currently balanced $39 million budget required considerable funding gymnastics, in that it is borrowing heavily from rapidly evaporating reserves, while relying on income from two of the city’s enterprise funds which remain in the black, its water and sewer service funds.
Years of deferred maintenance are beginning to catch up with the city, pushing it to a point beyond which it will no longer be able to stave off those problems into the future, as potholes, streets and dilapidating equipment are being neglected, funding for promised post employment benefits is non-existent, and no programs are available for attracting businesses into the city or dealing with the city’s burgeoning homeless population.
Fully 73.6 percent of the city’s operational costs consist of paying for personnel, including meeting  current payroll, covering workers’ compensation and paying the pensions of retired employees. Projections are that those costs will increase, leaving less and less of the money in city coffers available for taking care of its physical needs, such as paving streets, maintaining trees, sidewalks and parks and the  upkeep of other city infrastructure.
Last October, the city formed a blue ribbon fiscal task force committee that met several times in November, December and January to formulate a strategy to close the city’s budget gap. The committee came up with a number of options intended to both reduce costs and enhance revenues, which were delivered to the city council earlier this year. Many of those are unpalatable, however, and they have not been implemented.
In one of his last acts while still employed by the city, recently departed city manager Stephen Dunn suggested that the city undertake to formulate a fiscal responsibility act aimed at dealing with the city’s fiscal challenges that puts in place a protocol for remaining viable as a going concern, allows it to maintain and improve its infrastructure, meet ongoing costs with revenues, refrain from onerous borrowing and maintain adequate reserves.
Subsequent to Dunn leaving, city clerk Stephanie Mendenhall, who holds the additional title of administrative services director, together with interim city manager Martin Lomeli and finance director Christa Buhagiar drafted a proposed fiscal responsibility act.
In addition to a number of stated findings the city council is intended to sign off on, language in the act states, “the city council finds there is a need to provide competitive compensation to its employees to ensure retention of qualified individuals.”
This commitment to enter into what is essentially a bidding war with other municipalities with regard to employee compensation clashed with the act’s underlying stated objective, which is to keep the city solvent. Moreover, the use of the term “qualified individuals” rankled some, in that many of the city’s currently well-paid staff, including department heads, are perceived as having contributed to or have participated in some or even much of the activity involving former Upland Mayor John Pomierski, who was indicted on bribery and political corruption charges and convicted, having now completed his sentence by serving in a federal detention facility. Many question the interpretation of “qualified individuals,” particularly when it is applied to those seen as having enable Pomierski in his depredations, and there is objection to the stated necessity of providing them with “competitive compensation.”
Mendenhall is presently one of the highest paid city clerks in the state of California. She receives a base salary and add-ons of $175,606, plus benefits of  $55,624 for a total annual compensation package  of $231,230. Buhagiar is likewise well-compensated, pulling a base salary and add-ons  of $129,039 plus benefits of $44,414 for a yearly total of $173,453.
In addition to the criticism of the proposed fiscal responsibility act on the grounds of its inclusion of the “competitive compensation” passage, it fell under further criticism for what it excluded.
Larry Kinley, an Upland who resident who worked for Bank of America for 42 years, the last 15 of which he was a manager in the problem loan administration dealing with borrowers with financial difficulties, belabored the fact that the city of Upland in its financial statements does not include the city’s unfunded pension liability.
When she was confronted at the September 2 Upland City Council Finance and Economic Development Committee Meeting with the observation that the unfunded pension liability was not included in the city’s financial statements and that the fiscal responsibility act did not impose such a requirement, Buhagiar rolled her eyes.  Her reaction prompted Brandt, who is considered to be far more accommodating of staff with regard to accounting on financial issues, to ask that any action with regard to the fiscal responsibility act be tabled, even before Bozar weighed in on the matter.
Brandt indicated he was not comfortable recommending that the council take up the proposal and vote to implement it as it is presently written prior to the arrival of just-hired city manager Rod Butler and with a city council election in November in which three of the council’s five positions are being contested.

Leave a Reply